Dissolution clause in bylaws

Started by SueW6 • 9 replies • 561 views

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SueW6 (Michigan)
Posts: 814

Posted:

Does anyone have an example of a dissolution clause in their bylaws?

I am speaking here of 120-home home owners association that has a 4 acre beach and boat well. We are rewriting the bylaws and were told that we needed to have a dissolution clause in the bylaws. Along with an anti-discrimination clause and an indemnification clause.

Process? Voting threshold? Assets?

YIA

DouglasK1 (Florida)
Posts: 2,046

Posted:

Who told you that?

Escaped former treasurer and director of a self managed association.

KerryL1 (California)
Posts: 14,550

Posted:

Is a "dissolution clause" about dissolving the HOA? If so, I should think you'll find it in your CC&Rs. Why should it be in the Bylaws?

Your Bylaws should state the % of yes vote needed to amend them.

What do you mean by "assets," Sue? And why in Bylaws?

Ditto "process?" How to send out ballots, etc.? What does "process"mean here?

KerryL1 (California)
Posts: 14,550

Posted:

GenoS (Florida)
Posts: 4,276

Posted:

Our CC&Rs say they automatically renew every 10 years starting from 2014. A vote of 90% of the homeowners is required to be recorded with the county in order to terminate the covenants and restrictions and such a determination must be recorded in the county's Official Records in advance of one of those 10-year renewals.

Additionally, after casualty property loss and/or damage to property insured by the Association, the Board of Directors may certify in writing that the loss is "substantial". When that happens the homeowners must vote on whether or not to rebuild, repair and/or replace the damaged property. A 90% vote of the homeowners to NOT rebuild, restore and/or repair the damage will also trigger the termination of the CC&Rs.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You all need to hire a professional and not try to do this on your own. Going to get into some trouble. Our HOA if we dissolved it had to be turned over to a management company to handle. It would no longer be owner owned/operated. That was our clause. However, our set up was that you owned the home and the lot it sat on, everything else around it was HOA owned. (Common property).

So there is no One size fits all in HOA's.

Former HOA President

ChrisE8
Posts: 454

Posted:

Quote:

Posted By MelissaP1 on 09/14/2020 2:54 PM
You all need to hire a professional and not try to do this on your own. Going to get into some trouble.

Exactly. Doing your own legal work is as wise as doing your own surgery or dental work.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By ChrisE8 on 09/14/2020 3:02 PM

Posted By MelissaP1 on 09/14/2020 2:54 PM
You all need to hire a professional and not try to do this on your own. Going to get into some trouble.

Exactly. Doing your own legal work is as wise as doing your own surgery or dental work.

I agree.

SueW6 (Michigan)
Posts: 814

Posted:

There are no CCR‘s. This is a subdivision that was given a 4 acre parcel on the lake in 1940’s. They Inc. in 1950. It needs a lot of work.

The bylaws are being rewritten. The only criteria for membership is to live in the subdivision, but it is a voluntary association. Those people who pay membership can use the beach and boat well docking area (with an additional fee.)

So something should be declared somewhere when and if this corporation should be dissolved by the membership and the asset sold and divided.

Off to the lawyers we go.

I just thought someone else might have a similar situation.

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