HOAs not officially followed, no bylaws or registered with SOSe

Started by TammieD • 8 replies • 270 views

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TammieD (Oregon)
Posts: 3

Posted:

I don't believe this topic is discussed we bought into a supposed HOA. Gated community. We found out no bylaws were done. No secretary now state filed, no budget, and no yearly meetings. They charge each year a small amount of 60.00 for the gate power. However the gate is broken. New owners violating the CCRs they agreed to when purchasing land. Now all 8 lots finally sold and doesn't appear this HOA is running as required by law. How to get back on track? Hold a meeting? Then elect board members. Create a budget? File ein with irs and get filed with SOS? Or is this whole hoa null and void. However the city requires a savings for road repairs if needed in the development plans. Seems we can't just ditch it...but if we have a meeting and the majority wants to disban the HOA then what. It's only 8 lots. The developer died and all the lots went into foreclosure and finally have all sold to private owners. What to do?

TammieD (Oregon)
Posts: 3

Posted:

BTW this is Oregon. Based on original Post

MarkR21 (North Carolina)
Posts: 710

Posted:

The law doesn’t require an HOA run
If you want to make up an HOA go for it
If you want to disband it go for it
Your choice either way
With only 8 lots and a single gate probably not worth the hassle

TammieD (Oregon)
Posts: 3

Posted:

Oh but it needs to be enforced. As all homeowners knew this when they bought. Now we have rvs. Camper containers all outside and looking dumpy
Pluse the county road has to be maintained required by the county. And if is disbanded no one will pay for the 1/4 mile road that may need to be fixed, paved etc. And now the gate doeant work as someone ran into it. And we have a huge rv park full of unemployed druggie that will surely start looting the area. But what can be done to get it on track moving forward? Create bylaws then hold a meeting and get a quorum? And move forward? Some want to just fix the gate and out a lien on their property for not paying? But is that lawful?

MarkR21 (North Carolina)
Posts: 710

Posted:

Creating bylaws requires a lawyer and all owners to agree

You don’t have an HOA without bylaws. Might want to move if it’s so bad already

CathyA3 (Ohio)
Posts: 6,299

Posted:

I don't agree that you have no HOA without bylaws. The HOA may not be functioning properly, but there are almost certainly covenants, conditions and restrictions (CC&Rs) attached to the deeds of your homes. Those remain in place until owners take action to legally dissolve the HOA - ignoring them doesn't make them go away (as I think the OP knows).

A bigger issue can arise if the HOA owns common area, which usually is the case. If someone is hurt on this area and your HOA isn't carrying liability insurance, homeowners can become jointly *personally* liable. This is bad. One of the benefits of organizing HOAs as corporations is allowing it to purchase the necessary insurance. In addition to liability coverage, an HOA needs directors & officers (D&O) insurance to protect board members and others who have an official role in the HOA. Without such insurance, if a homeowner sues the board for some reason, board members become *personally* liable and put their personal assets at risk. This is also bad.

At any rate, y'all need to talk to a lawyer who is knowledgeable about HOAs and property law. The death of the developer and sale of lots to others who may not have been informed of the existence of the HOA can complicate things.* It sounds like you've been lucky so far, but luck won't protect you financially or legally.

(* Generally the CC&Rs are recorded in the county you live in, which means they have been legally disclosed. People who try to claim "nobody ever told me!" usually don't get very far with this argument.)

SteveH35 (Washington)
Posts: 339

Posted:

Uphill battle... what to do? Take up a part time job governing your 8 member community at great personal expense.

Lots of work to do

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Tammie

Get a BOD elected then start enforcing the Covenants. Who is collecting the $60 per year dues?

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