HOA split

We are comprised of high rise condos (2 buildings 12 units each) total 24, and 6 townhomes 4 units each, total 24. The HOA has hired an attorney (paid out of our reserves) to split our HOA in two. Note, the attorney is only representing the townhomes, will not even talk with high rise owners. The declarations refer to a withdrawal (needing 100%, state statutes say 80%). They only got 72%. They first referred to it as a split, then withdrawal, now a deletion(I think they have also used the term termination). The HOA has stopped maintenance, (except what's contracted and paid for). Highrise owners would be ok with the split, but they have not maintained anything here. They just replaced townhome gutters (3rd time) while highrise are literally falling off and are at least 50 years old.
1. Has anyone experienced a split? Cannot find a legal example anywhere.
2. Does anyone know what will happen to our deeds? The unit owners own the common areas, not the HOA.
3. More questions, too little time.

Thank you. The attorney has met with and had discussions with the townhomes. They (attorney and HOA) called a meeting, said was having a vote to split. Had meeting voted, would not let any highrise owner even talk, (the last) meeting lasted 15 mins. We literally have no idea what they are doing. The deferred maintenance here is unbelievable, while townhomes are in pristine condition. Thank you for your help.

Whoa. I really think they're jumping the gun if people are being asked to vote with so little information.

As you suspect, this is a big deal, and homeowners have the right to know what they're being asked to vote on. Even if this vote was just an opinion poll on whether or not the board should move forward on this, people have a right to make an informed choice.

Exactly, and they believe this can be done by Aug 11 (voted July 11).

Donna

Sounds like the BOD's have taken better care of the townhomes then the high rise buildings. Why is this?

How is it possible to pay for the attorney on this project out of reserves?? I'd think that your could borrow form reserves, but pay it bak.

With your high rises is such bad shape, it seems reserves funds are needed.

Is there just one unit on each high rise floor (=12 floors)?

I thought about this more overnight - and the more I thought, the angrier I got on behalf of the condo owners. It sounds like their buildings are falling down around their ears, and the board (who are all townhome owners and who failed to maintain the condo buildings to the same standard as the townhomes) are now trying to kick the condos to the curb. And they're using reserve funds to do it! It's unconscionable (and possibly/probably illegal). And if the association attorney is in fact acting on behalf of the townhome owners only, then that's another problem.

The only thing I fault the condo owners for is that they failed to push back while their buildings were being neglected. Condo owners can be apathetic about this stuff, and they seem to benefit from this - until suddenly they don't. I hope enough of them see the writing on the wall, lawyer up, and start with some stiffly worded cease and desist letters, among other things.

If the numbers were different (ie., there were more condos than townhomes in this community), I'd suggest calling for a special meeting to oust the current board and replace them with more responsible directors. But the numbers aren't there. I also assume that at least some of the owners in this community are landlords, which often makes it harder to get anything done. On the other hand, the prospect of them losing part of their property may get their attention. I dunno - may be worth at least considering the special meeting.

Lawsuits can be a crap shoot even when you think you've got a solid case, and they're expensive - but I think that the condo owners have no choice about pushing back legally. They own part of the common elements, and they own part of the reserves. I don't believe that the board can just change this, vote or no vote, since it changes what people own. The same is also true for the townhome owners, who will also end up owning "less" as a result of the split, but they'll still come out of this in better shape since they will lose a significant maintenance obligation.

I don't think there will be any winners if this split happens. Even the townhome owners will be hurt since the board is using reserve funds to make this happen - they'll have to replace those funds. Those condo buildings also may be attractive targets for the investors in any case - distressed properties in good locations often get snapped up as soon as the sharks ... er, investors... smell blood in the water.

Oopp, I'm so ticked off about this...

Wow. The board isn't thinking too clearly about this. And I find the HOA attorney's role in this disappointing.

Yes, in general attorneys have to do what their clients want. But every time our attorney would start a conversation with those words, what followed would be some straight talk about the possible consequences of our decisions. Fortunately our lawyers viewed their job as keeping their clients out of legal trouble rather than running up billable hours.

Your HOA's insurer also has a stake in this - they don't want boards racking up claims, especially since the insurer may be on the hook for defending the board in court (it depends what the policy states, many policies have an exclusion in cases of willful misconduct). Policies also may have provisions that give the insurer the right to force a settlement even if their client wants to keep fighting in court.

I'm happy to hear you have legal representation and that things are moving in the right direction.

I hope cooler and more rational heads end up prevailing. (It's ironic the your HOA may incur costs that far exceed the cost of maintaining those condos properly.)