HOA President liable?

You may have to check with an attorney.

The answer to this may depend in part on your state's real estate disclosure laws and whether or not the expiration of your covenants would be considered public information. Covenants often are public info since they're recorded with your county's recorder, so in theory buyers/realtors/lenders/title companies could easily find out there was an issue.

However, it does sound as if he's misrepresenting things to homeowners.

The question then becomes: what can you do about it and what are the possible repercussions? That's where a lawyer would be helpful.

More thoughts:

* Be careful with the accusations of fraud.

* A single board member has no authority by himself. So if the board president is misbehaving, the rest of the board is also liable - they either agree with him or they're asleep at the switch and agree tacitly with whatever he's doing.

* Another question arises: if your association is incorporated, have you allowed your corporate status to lapse? This is potentially more serious. For one thing, your association can't get insurance on the common elements - if someone has an accident on association-owned property, then homeowners may become jointly *personally* liable for damages, putting their personal assets at risk. In addition, the association no longer will have Directors & Officers insurance, which means all board members would be personally liable if they are sued. No one should *ever* serve on a community association board without D&O insurance.

* Your association needs to talk to an attorney since this situation could get expensive fast.

to clarify:

just the CCR's have expired/lapsed, correct? The HOA still has continued to hold meetings and 'operate' however? Has annual State filings been done? Interesting that your CCR's do not 'automatically renew'.

Can an HOA non-profit corporation exist without any CCR's? How can they collect assessments without the CCR?

I mean, this seems great to me....you've got a nerfed HOA where some busy bodies can hold meetings and talk amongst themselves but have no authority to enforce their rules on you.

Curious which direction you'd like to see this move towards? Reinstating the CCR's or full dissolution of the HOA corporation.

Respectfully, wording the topic may have been something like :

1 - "IF IT IS KNOWN THAT MRTA HAS EXPIRED THE CROSS-COVENANTS, IS THERE A DUTY TO ALERT PROSPECTIVE BUYERS ( via ESTOPPEL CERTIFICATES or whatever disclosuring ) ?"

2 - WIDER ? : " IS THERE A DUTY to at least formally ALERT STAKEHOLDERs & CURRENT OWNERS about such EXPIRY ? "

3 - Or further " IS THERE A further DUTY TO ACTUALLY TAKE STEPS TO ATTEMPT TO pre-emptively PRESERVE cross-covenants ? ( or to revitalize after MRTA expiry ?)

About # 1 the answer may start from your state's law & jurisprudence.

Worth remembering that the association is NOT technically a vendor, but may have had imposed on it specific duties to disclose material aspects. And of course not to lie if responding to diligencers.

About #2 and # 3, it would also be worth checking out lengthy MRTA discussions at past topics here.

( Been thinking about this myself for many years as my own cross-covenants approach arguably the harshest MRTA in North America amidst incorrigible association silence. )

The MRTA topics include “FL Covenant Expiration MRTA” - https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/149433/view/topic/Default.aspx

and “BoD stealing votes” - https://www.hoatalk.com/Forum/tabid/55/forumid/1/tpage/1/view/Topic/postid/316058/Default.aspx

Several years ago Florida commenter Geno dug up "Palm Beach HOA et al v McCullough (2013 ).

A Florida DECLARATION - ENTRENCHED "duty to preserve" certain cross-covenants was upheld - and ordered attempted - at trial & unanimously on appeal ( see : “Southfields of Palm Beach Polo & Country Club HOA Inc et al v. Victoria D. McCullough” at https://law.justia.com/cases/florida/fourth-district-court-of-appeal/2013/4d11-1130.html ).

Of course that's not Georgia, and the appeals court was silent as to whether Florida law was directly triggered. But it's germane that the wording of your own Declaration should be reviewed to see if a similar duty MIGHT be construable within the text . . .

Xcrpted from the unanimous FLORIDA appeal decision :

“ . . . The declaration, intending to preserve the equestrian nature of Southfields, required that the board exercise its powers to maintain the declaration until and unless ninety -five percent of landowners vote to dissolve the declaration and disband the association . . .

The trial court ALSO CORRECTLY CONCLUDED THAT THE LANGUAGE OF THE DECLARATION ITSELF MAKES IT CLEAR THAT “THE BOARD OF DIRECTORS IS MANDATED TO, AND HAS A DUTY TO, PROTECT SOUTHFIELDS AND PROTECT THE RESTRICTIVE COVENANTS RUNNING WITH THE LAND.”

Therefore, injunctive and mandamus relief was appropriate to compel the board to fulfill its duty and take the required action to preserve the declaration. We therefore affirm.” – unquote

Are you on the board, Daniel?

With others, the entire Board is responsible.

Absolutely correct.

In view of the lengthier ( jurisdiction-specific ) labels for what Floridians know as their MRTA, I confess gotten used to using "merta" instead of other versions.

Locals here - including 12 out of 12 attorneys in a sampling - don't actually know either MRTA nor what a Law (Reform) Commission in 1989 formally labelled "Expiry by Operation of the Recording Statutes".

( It's a concept incidentally UN-KNOWN to & UN-NAMED by our legal forbears the Brits ).

1 - Georgia's appears to be whatever's the flipside of "Legal effect of good record title for 40 years".

( I find MRTA - "merta" - easier than :

2020 Georgia Code / TITLE 44 - PROPERTY
CHAPTER 2 - RECORDATION AND REGISTRATION OF DEEDS AND OTHER INSTRUMENTS
ARTICLE 1 - RECORDING
PART 1 - RECORDING OF DEEDS AND OTHER REAL PROPERTY TRANSACTIONS
§ 44-2-22 - Legal effect of good record title for 40 years
O.C.G.A. 44-2-22 (2010) 44-2-22.

Legal effect of good record title for 40 years

A prima-facie case shall be made out in actions respecting title to land upon showing good record title for a period of 40 years, and it shall not be necessary under such circumstances to prove title to the original grant from the state. https://law.justia.com/codes/georgia/2020/title-44/chapter-2/article-1/part-1/section-44-2-22/ )

2 - Whatever is an easy label for Georgia 44-2-2, it's about conveyancer diligence "notice period" or "title investigation period".

3 - FOR AMERICAN LEGAL RESEARCHERS, ( Simes & Taylor's ) Model Act about it evolved from Michigan's landmark 1960 statute which itself appears to have "heavily influenced" by Ontario's "Investigations of Title Act" from 1929-1930 not 1950 . ( * see below )

So MRTA-haters can partially & fairly blame us foreigners across the lake from Michigan.

4 - * A definitive ( MRTA generic class ) historical pedigree - still kicking around in some modern factums - is :

* Walter E Barnett : “Marketable Title Acts : Panacea or Pandemonium” (1955) Article 4 of vol 53 Issue 1 Nov 1967 pages 45 – 97.
https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=3624&cclr

( For the record, that's "W.E. Barnett" the Cornell U. asst law professor. Not the fabulous "Chester A. Burnett" a.k.a Howlin’ Wolf 1910-1976 as idolized by the Rolling Stones & far lesser folks like me . . . )

BobD4, if you are (quite) politely saying that Georgia's Act is the equivalent to Florida's MRTA, then point taken.

BancsS, fascinating. At your former HOA, has anyone tried to opt out of paying the assessments, on grounds that the covenants are not enforceable? Did your former HOA arrange insurance for common areas?

I agree with CathyA3 regarding liability and insurance concerns for common areas, along with nearly anything else she posts.

Let's toss in there that even a corporation that is properly "dissolved" and on record with the state's Secretary of State with the proper articles of dissolution yada still owns land that is titled in the corporation's name. Nationwide, state statutes tend to say that a corporation, regardless of being listed as "dissolved" with the SOS, has all rights (and encumbrances, if this is the right word) of the land until the dissolved corporation sells the land, which could be many years indeed after the corporation is dissolved per the paperwork filed and approved by the SOS.

I conclude a HOA corporation with expired covenants and all its members may still be liable for anything that happens on the corporation's land.

I will add that when the original corporation dissolved, a new one was formed with a different name and different objectives. The new nonprofit's focus was maintaining the common elements...

I think there needs to be clarification here.

Was the corporation dissolved or just the CCR's expired?

I agree, you can have a corporation with Articles, Bylaws, plats, memberships, a board, land ownership, etc....but then how would it actually collect assessment and revenue? Understandably it can't enforce garage door color...

In Iowa, renewal of the covenants requires 100% approval of the property owners. I don't see that happening in my previous HOA. Their current arrangement seems to work fairly well without the CCR's. If a property owner wants the neighborhood to have a certain look than this arrangement would not be for everyone. Keep in mind, it was in a rural community close to a large lake mixed in with farms and campgrounds. You get the picture. Nice but definitely relaxed living. Conducive to that type of HOA.

I thought this was one interesting and pithy article. I would think it would be incredibly helpful to any Georgia-based layperson (meaning non-lawyer who needs an introduction to the law on covenants expiring). It also gives a bit of history on why statutes putting conditions on the lifetime of covenants exist.