HOA Legalities

Started by JamesW25 • 10 replies • 331 views

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JamesW25 (Texas)
Posts: 3

Posted:

Hi, first I'd like to say that it was really nice how easy it was to register. Second, I have a situation that I would really appreciate some advice/direction on.

Fast Fact Background:
- Bought into the community last year
- Closing documents were the standard this is in an HOA and you must join
- Volunteered for the board and got elected

Fast Fact Issue:
- Community is being built in 3 phases
- Governing documents cover phase 1
- Phase 2 and 3 have supposedly been annexed but that documentation isn't public (I'm part of phase 2)

Question:
- Does the annexation documents need to be filed with the city recorder to be legit?
- If the documents are dated 2020 (theoretical) but it isn't filed until this week what is the effective date? Meaning, can he annex my property without me giving consent since I own it now even if he had drawn up the documents well in the past?
- Finally, am I at legal risk making decisions on the board if these documents haven't been filed?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

James

It the Developer/Declarant still in control?

JamesW25 (Texas)
Posts: 3

Posted:

No, I was told he gave over power. But that too falls under this annexation issue. If the paperwork wasn't filed then he only has a model home in the existing HOA instead of 3 votes per lot that he has in phase 2 and 3 of the development.

Unless he can date the annexation paperwork to whatever he wants and a board vote or court filing isn't required/has no effect on the effective date of the annexation.

AugustinD
Posts: 3,698

Posted:

-- Please respond to JohnC46's question first.

-- I have doubts that "annexed" accurately represents what is going on here. For example, I would presume you own the lot on which your home sits. The declarant is not going to annex your land. If you mean that the developer has (or seeks to) included (include) your lot in the HOA, then okay. If the latter, then you want to look at other documents as I describe below.

-- I expect the city and/or county approved all three phases, with much verbiage about how they would all be a part of the same HOA. The plats for one may say a great deal on the point. The plats are as legally powerful as the CCRs. The county clerk will have a copy of the plats. County clerk staff largely exist to help members of the public with questions like yours.

-- For good or bad, municipal codes, planning departments, and City Councils seek to place subdivisions under HOA control. Sometimes municipal codes requires all new subdivisions to be under HOA control. You should seriously consider this likelihood. Calling the city planning department and asking about whether such a requirement exists might be your first step.

-- To become as informed as possible, I would be reviewing: (1) the Articles of Incorporation on file with the Texas Secretary of State; (2) the plats documenting the usage and boundaries of all three phases; (3) my home's deed, for reference to covenants; (4) any CCRs on file for any of the three phases.

-- My suggestions above are intended both (1) to help prepare you or your board with a meeting with an attorney; (2) and to help you or your board understand some of the basic legalities for your home and this HOA.

-- I would not want to speculate on risk per se until I know more. I tend to think that you will be fine for a few weeks as you try to answer certain questions.

AugustinD
Posts: 3,698

Posted:

I questioned the OP's use of the word annex above. Far superior to the arguable cr-p I posted above on the point is this California-based discussion of how a subdivision's phases become annexed into a HOA:

https://www.davis-stirling.com/HOME/A/Annexations

The discussion references some legal disputes with question's like the OP's. Notice how the 1990 appeals court said, "Sorry, owners, but the general plan binds you to the covenants and the HOA here." The "general plan" is typically filed with the county or city.

The OP should also go after the General Plan for this subdivision (with three phases).

AugustinD
Posts: 3,698

Posted:

From Texas statutes about (1) the "general plan" being a part of the plat and (2) the legal authority of a "general plan":

https://statutes.capitol.texas.gov/Docs/LG/htm/LG.212.htm

TimB4 (Tennessee)
Posts: 21,062

Posted:

When you purchased, I'm sure you signed some document specifying deed restrictions.

Just because the declarant turned over authority to the board to run the Association, does not mean he also transferred developer rights for the whole development. He also may have turned over phase one but not the other phases.

Additionally, since no one here is a known attorney (and I expect that they wouldn't say if they were), if you want a legal opinion you will need to consult a local attorney (likely one versed in property law) who would have full access to your documents along with the knowledge of local and State statutes.

In a general sense, it's likely that the joining of the other phases to the association occur when paper work is signed. However, not enforceable until the document is filed (as this is often the way it is with many HOA documents).

CathyA3 (Ohio)
Posts: 6,299

Posted:

It's a bit surprising that the Declarant has turned over control to the homeowners if there are still more phases being built (unless they're really small compared to the original one). There should be something in your governing documents that specifies when turnover needs to happen - it's usually based on percentage of homes sold, such as 75%. The percentage is also based on the projected number of homes for the finished community, not just the percentage of those in the first phase.

When new phases are added, the Declarant will record an amendment to your original CC&Rs. It's not unusual from them to wait until they're ready to start building and selling in the new phase. I'm not a lawyer, but I believe that the amendment needs to be recorded before a home can be sold since recording acts as a legal disclosure.

There should also be language in the original CC&Rs that refers to the possibility of adding phases, will note any limitations on expansion, and will state that provisions of the original CC&Rs apply to the new phases.

If you're on the board and you believe that the amendment hasn't been recorded, it's worth asking the developer. Or look on your county recorder's website - the info may be available online.

JamesW25 (Texas)
Posts: 3

Posted:

Lots of great info to follow up on, thanks for the help. I'm by no means an expert on these items but I do know that the term annexation of the additional phases was used and that the current declaration only references the lots that were part of phase 1. I suspect side legal issues/mismanagement is why the HOA was handed over before he finished the development, he's not very good at what he does.

I'll follow up on the information you all have provided, really appreciate the direction.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Could the Developer have sold off the two other phases to someone else? Which means the 1st phase is owner owned but the 2nd/3rd are under another developer? Seems a bit odd. CC&R's and Articles of Incorporation are required to be filed. They are considered PUBLIC documents.

I would go to the records department to see if they are really filed or not. Plus if they do include the "annexation" of the other lots. Something seems missing that one puzzle piece.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

James

If I look at the original docs for my neighborhood it was platted for 2 sections from the get go. I bought in section 2 but those that bought in section one did not know what type housing was going in section 2. Ended up being the original duplexes (2 homes side by side with a common wall) in the first second with the second section being one family homes. Same "look" as duplexes but single story and 2 story homes.

I am assuming James's Declarant did the same thing as in got got the entire development approved but built in phases.

James, was the BOD elected or appointed?

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