Association in disarray, fellow board member impeding fixing the issue

JustinC5 (North Carolina)
Posts: 42

Posted:

I'm the treasurer (and a newer one at that) of the board, our secretary appears to be impeding addressing the issues, and will only vote to allow addressing the tax concerns. I can understand why they are doing this, and its functionally making it impossible for any of us to address the problems at hand. Our president is amazing at preventing association conflict, but his skillsets differ than mine and the secretary. We both are capable of in-depth research, and understanding of legal documents and statutes.

We have either 13 or 14 members, depending if one member is legally a member.

I have uncovered a variety of issues that concern me.

A partial list:

Not filled taxes in over a decade
Not filled most required reports
Not updated our mailing addresses, or registered agent address
Allowed a declarant who no longer has rights to appoint a board member
Allowed a declarant to add a property to the association (their own) which has no mention of covenants/restrictions on it's deed.
Ignore meeting notice procedure
Ignore recording keeping requirements
Destroyed all physical records
$20,000 or so on hand
No reserve fund
No reserve study
No reserve
A large ~$500,000 expense looming ahead (thankfully my lot is not liable)
Misappropriated dues that were expense limited by the covenants and by NC state law, for 20 years
Vastly inappropriate insurance coverage
$300/yr dues

We are well within the receivership danger zone right now.

I went against the secretary and notified the membership of the issues i am 100% certain of, against the wishes of the secretary. I did not get much response.

I'm not seeking advice on solving any specific issue on the list, I know how to tackle most of the, however I am seeking advice from people more familiar with operating within associations of how do I actually get other members to care?

Right now I have exhausted myself trying to get any one of these taken care of without a fight. I am almost ready to resign and file the complaints needed to trigger the state to put the association in receivership, which I really dont want to do.

JustinC5 (North Carolina)
Posts: 42

Posted:

"Destroyed all physical records"

and as a result of this, our records are incomplete.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You know what I did? Just stuck to the rules. Had them memorized backwards and forwards. Understood what each Articles of Incorporation, CC&R's, by-laws, and ACC document related. If was asked a question, would not knee jerk respond. Would tell them will refer to the rules and quote the rules verbatim. Brought the rules to each and every meeting. Didn't have to read them etc... Just have them available to SEE they existed and can read them.

Once you start back to basics with going back to the "word", then changes can be addressed. It may be those rules are outdated and need updating. Usually do, then form a committee of people interested in that process. Increase participation.

Another little "trick" I used was to SHOW my involvement and care in the neighborhood. Maybe I planted flowers at the front entrance. I took my dogs on a walk twice a day. Which allowed me to be available an open for those "drive by" people.

You have two main choices on getting people involved. Piss a bunch of people off by doing something stupid or genius or SHOW people that it is okay to care. Once people see you care then they may develop an attitude they can do it too. There is ALWAYS a "bigger fish". Your job is to create and feed one to grow...

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

It's hard to say what will prompt homeowners to care about anything. The problems you xescribe are quite serious, and they weren't created overnight.

I wouldn't worry about the secretary- all board members have one vote and simple math dictates majority rules. What you need now is a come to Jesus meeting to tell everyone what's at stake - the future of the association and your pocketbooks. To wit:

Board meeting minutes are legal documents that must be maintained forever. Without them you don't have any proof of what was done or when, why or how much the association was supposed to pay. This can result in a lot of trouble with the wrong people (starting with the IRS).

Without a reserve fund, all of you risk huge special assessments to pay for major repairs and replacements to the common areas. If you're a townhouse community for example, that means stuff like roofing- unless y'all have several thousands of dollars just lying around waiting for times such as that.

If no one faces facts and you go into receivership, your costs will go even higher to pay assessments, the receiver's fee, and tge legal expenses- and there won't be a damned thing anyone will be able to fo about it because the receivership only answers to the judge. You don't want your assessments go rise 300% or more? Too bad- shut the hell up and pay!

Insurance? who, pray, has the nerve to insure this shit show???

Sure you can sell - good luck with that and I hope you're prepared to take a huge loss.

This is what the board will have to tell everyone- they can scream all they want, but the fact is they too were asleep at the wheel and now the car is in a river that has crested and no one can swim.

I dont envy what you're about to face, but the board has to be on one accord about this, including the secretary, but if he or she won't cooperate, oh well. Do what the board should have been doing all along. The rest of the homeowners only have themselves to blame by not holding themselves or anyone else accountable.

It's OK to say unless this is addressed, you will be the one who goes to court and requests the community be placed in receivership. You may find dome skll go along with you - they might as well, because thus will come crashing down in you along with everyone else. I wish you well- you have a long strange trip ahead of you

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

BillD16 (Texas)
Posts: 971

Posted:

Quote:

Posted By JustinC5 on 05/01/2023 2:05 PM
I'm the treasurer (and a newer one at that) of the board, our secretary appears to be impeding addressing the issues, and will only vote to allow addressing the tax concerns. I can understand why they are doing this, and its functionally making it impossible for any of us to address the problems at hand. Our president is amazing at preventing association conflict, but his skillsets differ than mine and the secretary. We both are capable of in-depth research, and understanding of legal documents and statutes.

We have either 13 or 14 members, depending if one member is legally a member.

I have uncovered a variety of issues that concern me.

A partial list:

Not filled taxes in over a decade
Not filled most required reports
Not updated our mailing addresses, or registered agent address
Allowed a declarant who no longer has rights to appoint a board member
Allowed a declarant to add a property to the association (their own) which has no mention of covenants/restrictions on it's deed.
Ignore meeting notice procedure
Ignore recording keeping requirements
Destroyed all physical records
$20,000 or so on hand
No reserve fund
No reserve study
No reserve
A large ~$500,000 expense looming ahead (thankfully my lot is not liable)
Misappropriated dues that were expense limited by the covenants and by NC state law, for 20 years
Vastly inappropriate insurance coverage
$300/yr dues

We are well within the receivership danger zone right now.

I went against the secretary and notified the membership of the issues i am 100% certain of, against the wishes of the secretary. I did not get much response.

I'm not seeking advice on solving any specific issue on the list, I know how to tackle most of the, however I am seeking advice from people more familiar with operating within associations of how do I actually get other members to care?

Right now I have exhausted myself trying to get any one of these taken care of without a fight. I am almost ready to resign and file the complaints needed to trigger the state to put the association in receivership, which I really dont want to do.

So if I'm reading this correctly, y'all haven't filed taxes (or, I'm assuming, paid taxes) in over a decade?

Yeah, if I were on that Board, I think I'd focus on the taxes. If the taxing authorities come down on you, I'm not sure that the rest of those issues matter a whole lot.

If I were you, I'd engage a lawyer immediately.

I sincerely wish you luck with this.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By BillD16 on 05/01/2023 5:04 PM

So if I'm reading this correctly, y'all haven't filed taxes (or, I'm assuming, paid taxes) in over a decade?

Yeah, if I were on that Board, I think I'd focus on the taxes. If the taxing authorities come down on you, I'm not sure that the rest of those issues matter a whole lot.

If I were you, I'd engage a lawyer immediately.

I sincerely wish you luck with this.

Bill

We have not filled for over a decade, possibly two decades. The CPA I use for my businesses said he has handled such before, no big deal (im not involving my personal out of state CPA in HOA business). We likely have no taxes due, just missed fillings that we are required to do (per angry irs letter). With that said, because a previous board destroyed our records intentionally, I don't have enough information to really know.

Taxes are the LEAST of my concern, my primary concern is the potential for receivership, that is our worst case scenario.

I am also in the odd position where my lot is barred from responsibility for the common easements and properties by covenants and state law. I cant be assessed for anything to do with them. If all goes to shit, the most expensive parts will not be on me.

I do have an option forward, that it is starting to seem like I might be forced to take. I am 2 votes shy of having enough votes to terminate the association (yes just 2).

My current plan if I can not get appropriate action to fix this, is to to force a special meeting (which takes 1/10th of votes to trigger, so 2 members in such a small association), then force a vote on terminating the association.

JackS20 (North Carolina)
Posts: 271

Posted:

find out how much a receivership will raise dues. I'm guessing 3 to 4x the $300 yearly dues. then use that information to convince 2 more members to dissolve the HOA. Obviously it hasnt' been working for a long time.

People dont' care until it hits their pocket book has been my realization.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/01/2023 5:17 PM
I am also in the odd position where my lot is barred from responsibility for the common easements and properties by covenants and state law.

Can you explain why you believe this?

Quote:

Posted By JustinC5 on 05/01/2023 5:17 PM
I cant be assessed for anything to do with them. If all goes to shit, the most expensive parts will not be on me.

I do have an option forward, that it is starting to seem like I might be forced to take. I am 2 votes shy of having enough votes to terminate the association (yes just 2).

How much common area are we talking about?

What is this huge expense that is coming up?

Do you understand that dissolving the corporation does not mean the corporation is suddenly not responsible for maintaining land it owns? That in fact the corporation retains title to this land and is supposed to try to sell it? Would there be any takers?

Do you understand that, while the HOA might be terminated, the covenants probably do not terminate unless there is 100% consent?

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By JackS20 on 05/01/2023 5:26 PM
find out how much a receivership will raise dues. I'm guessing 3 to 4x the $300 yearly dues. then use that information to convince 2 more members to dissolve the HOA. Obviously it hasnt' been working for a long time.

People dont' care until it hits their pocket book has been my realization.

Those costs will differ county to county, as I cant find record of a hoa receivership in my county. Either way I think any cost raise is enough of a tool to use, thank you for the suggestion, it is a good one.

I'm not sure i need to convince anyone, however as I am 2 votes shorts without polling anyone, those votes came in idle response to the situation. I think "she is dead jim".

Quote:

Posted By ElleN on 05/01/2023 5:43 PM

Can you explain why you believe this?

As I stated that is covered for my low by state law and our covenants, but see N.C.G.S. § 47F-3-115 (C)(1).

Quote:

Posted By ElleN on 05/01/2023 5:43 PM

How much common area are we talking about?

What is this huge expense that is coming up?

I'm sorry, both of these questions are irrelevant to the topic.

Quote:

Posted By ElleN on 05/01/2023 5:43 PM

Do you understand that dissolving the corporation does not mean the corporation is suddenly not responsible for maintaining land it owns? That in fact the corporation retains title to this land and is supposed to try to sell it? Would there be any takers

Do you just automatically assume people are incapable of understanding how title to property works? Are all of your replies this off topic, and condescendingly rude? or do that many ignorant people post here that it is considered good form to reply like this?

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/01/2023 5:43 PM

Posted By JustinC5 on 05/01/2023 5:17 PM

Do you understand that, while the HOA might be terminated, the covenants probably do not terminate unless there is 100% consent?

Can you explain why you believe this?

In absence of coverage in the covenants itself, it falls back to statute for clarification. Thus it is 50% to terminate the associations, 50% to modify deed restrictions, the covenants are placed as a deed restriction. While technically maybe it wont terminate the covenants I guess, but they will have no more applicable properties they apply to, as such it functionally terminates them.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Ellen... Think we got us a case of "I want to hear what is in my head" because I am right you are wrong... Starting to think part of the issues is not far from one's own perception... Good luck!

Former HOA President

GuyM1 (Ohio)
Posts: 318

Posted:

Can you afford to move? If so move and make sure of the next place. This will take years off your life...I know!

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By MelissaP1 on 05/02/2023 4:29 AM
Ellen... Think we got us a case of "I want to hear what is in my head" because I am right you are wrong... Starting to think part of the issues is not far from one's own perception... Good luck!

Ah ok so that behavior is not unique to one individual on this discussion board, that is unfortunate.

My original post asked a people handling question, as I am lacking in the capability (I'm glad you both have shown I'm not alone in that matter, and I'm not as bad off as some people). Because of that I did not dive into the fact I have already engaged a real estate attorney on these matters, and I have taken the state bar's workshop on planned communities myself.

Both the statute I cited, as well as our covenants limit assessment use for limited common properties to those with access to them. My lot does not reside within or next to the private gated community, the biggest lot (mine) resides outside the gates and does not have access to any of the common properties. By statute in NC and our covenants, my dues can not be used for these properties and I can not be assessed for these properties, as I have no access to the private road, nor the worthless unusable lots that reside with the private gated road. I own the entirety of the road and gate for my lot, as well as the equipment to repair and maintain them myself.

Again, all of this is irrelevant to the single question I asked:

I'm not seeking advice on solving any specific issue on the list, I know how to tackle most of the, however I am seeking advice from people more familiar with operating within associations of how do I actually get other members to care?

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By MelissaP1 on 05/02/2023 4:29 AM
Ellen... Think we got us a case of "I want to hear what is in my head" because I am right you are wrong... Starting to think part of the issues is not far from one's own perception... Good luck!

Ah ok so that behavior is not unique to one individual on this discussion board, that is unfortunate.

My original post asked a people handling question, as I am lacking in the capability (I'm glad you both have shown I'm not alone in that matter, and I'm not as bad off as some people). Because of that I did not dive into the fact I have already engaged a real estate attorney on these matters, and I have taken the state bar's workshop on planned communities myself.

Both the statute I cited, as well as our covenants limit assessment use for limited common properties to those with access to them. My lot does not reside within or next to the private gated community, the biggest lot (mine) resides outside the gates and does not have access to any of the common properties. By statute in NC and our covenants, my dues can not be used for these properties and I can not be assessed for these properties, as I have no access to the private road, nor the worthless unusable lots that reside with the private gated road. I own the entirety of the road and gate for my lot, as well as the equipment to repair and maintain them myself.

Again, all of this is irrelevant to the single question I asked:

I'm not seeking advice on solving any specific issue on the list, I know how to tackle most of the, however I am seeking advice from people more familiar with operating within associations of how do I actually get other members to care?

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By GuyM1 on 05/02/2023 4:41 AM
Can you afford to move? If so move and make sure of the next place. This will take years off your life...I know!

Lol, perhaps it would, but I'm sitting on a nice setup. 8.5 acres surrounded by trees in one of the fastest growing areas of the nation. I want to wait another 10 years before selling it. It is a quite nice area, my neighbors are amazingly great, just no one cares enough to properly handle the association. Either they will start caring, I will find 2 votes to dismantle it, or it will go into receivership, which after I am sure I will find 2 more votes. Either way, I'm leaving the board.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 4:05 AM
In absence of coverage in the covenants itself, it falls back to statute for clarification. Thus it is 50% to terminate the associations,

You indicated 47F applies. From 47F:

Except in the case of taking of all the lots by eminent domain (G.S. 47F-1-107), a planned community may be terminated only by agreement of lot owners of lots to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the lots in the planned community are restricted exclusively to nonresidential uses.

For at least some of what you want to do, 47F is going to be what is called "apposite" vis-a-vis more generic statute sections.

I asked about this large expense because if the large expense pertains to corporate-owned common area, then dissolving the corporation may be still more unwieldy.

Like 99.99% of the people who come to this forum, and even some of the veterans, do not understand that "dissolving" a corporation does not do away with its responsibilities for common area. That means, for example, that a slip and fall on common area makes all the owners liable for the injury, unless insurance is in place.

The subject of getting rid of a hoa comes up here a lot. It is not as easy as you seem to think.

We are all strangers here. I have no idea what your skill level is. An online forum is not the easiest way to share information. I am sorry you would not answer my questions. You could have just said, "Absolutely, I do understand ____. It's from statute ____," or "No, I did not understand this. Can you explain more?"

Respectfully, you in particular should hire an attorney to get your questions answered.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 5:31 AM
Both the statute I cited, as well as our covenants limit assessment use for limited common properties to those with access to them. My lot does not reside within or next to the private gated community, the biggest lot (mine) resides outside the gates and does not have access to any of the common properties. By statute in NC and our covenants, my dues can not be used for these properties and I can not be assessed for these properties, as I have no access to the private road, nor the worthless unusable lots that reside with the private gated road. I own the entirety of the road and gate for my lot, as well as the equipment to repair and maintain them myself.

Thank you for explaining. I am satisfied that this base is pretty much covered. I am not there, boots on the ground with the covenants in front of me, so I do not want to say I am 100% assured. I will take you at your word that you are.

As for getting people to do what you want in HOA-land: This is one of the top questions posed at this forum. Usually it comes down to

-- being willing to campaign like crazy (web site; flyers; snail mailings; emailings; Special Meetings to discuss xyz), with no guarantee of success; a change of the board. To cause change might take months to a few years. Or change might never happen.

-- resigning one's self to the possibility that one cannot get the votes to cause xyz change and so accepting the situation.

-- selling and moving.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 6:37 AM

Posted By JustinC5 on 05/02/2023 5:31 AM
Both the statute I cited, as well as our covenants limit assessment use for limited common properties to those with access to them. My lot does not reside within or next to the private gated community, the biggest lot (mine) resides outside the gates and does not have access to any of the common properties. By statute in NC and our covenants, my dues can not be used for these properties and I can not be assessed for these properties, as I have no access to the private road, nor the worthless unusable lots that reside with the private gated road. I own the entirety of the road and gate for my lot, as well as the equipment to repair and maintain them myself.

Thank you for explaining. I am satisfied that this base is pretty much covered. I am not there, boots on the ground with the covenants in front of me, so I do not want to say I am 100% assured. I will take you at your word that you are.

As for getting people to do what you want in HOA-land: This is one of the top questions posed at this forum. Usually it comes down to

-- being willing to campaign like crazy (web site; flyers; snail mailings; emailings; Special Meetings to discuss xyz), with no guarantee of success; a change of the board. To cause change might take months to a few years. Or change might never happen.

-- resigning one's self to the possibility that one cannot get the votes to cause xyz change and so accepting the situation.

-- selling and moving.

There is a reason I consulted an attorney (as I mention above), and a reason why I did not seek legal advice, but person handling advice here. That is because I would get the response of an ill informed arm chair lawyer.

If you read 47F, it makes it clear certain sections do not apply in certain circumstances. For instances most sections are not applicable to associations former before jan 1st 1999, and most sections are not applicable to associations of under 20 members.

In my case, 47F applies in regards to use of assessments, it does not apply for termination.

My advice to anyone is to follow my lead, consult an attorney, and save legal questions for the attorney. This board is not the appropriate place to ask them, and you should not be giving legal advice nor your interpretation of the law.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 6:28 AM

Posted By JustinC5 on 05/02/2023 4:05 AM
In absence of coverage in the covenants itself, it falls back to statute for clarification. Thus it is 50% to terminate the associations,

You indicated 47F applies. From 47F:

Except in the case of taking of all the lots by eminent domain (G.S. 47F-1-107), a planned community may be terminated only by agreement of lot owners of lots to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the lots in the planned community are restricted exclusively to nonresidential uses.

For at least some of what you want to do, 47F is going to be what is called "apposite" vis-a-vis more generic statute sections.

I asked about this large expense because if the large expense pertains to corporate-owned common area, then dissolving the corporation may be still more unwieldy.

Like 99.99% of the people who come to this forum, and even some of the veterans, do not understand that "dissolving" a corporation does not do away with its responsibilities for common area. That means, for example, that a slip and fall on common area makes all the owners liable for the injury, unless insurance is in place.

The subject of getting rid of a hoa comes up here a lot. It is not as easy as you seem to think.

We are all strangers here. I have no idea what your skill level is. An online forum is not the easiest way to share information. I am sorry you would not answer my questions. You could have just said, "Absolutely, I do understand ____. It's from statute ____," or "No, I did not understand this. Can you explain more?"

Respectfully, you in particular should hire an attorney to get your questions answered.

Section § 22.06 of the NC Bar Associations "Common Interest Communities In North Carolina" second edition quite clearly covers what controls the termination. This is an excellent book on the subject, every HOA board member in NC should be required to read it prior to acting as part of the board, so should anyone who wishes to publicly debate matters of NC law as applied to associations.

Quoting that section:
"Unlike a planned community subject to the PCA where 80% of the owners must approve the termination of the planned community, the Nonprofit Act allows two‑thirds of the votes cast or a majority of the votes entitled to be cast on the plan of dissolution, whichever is less, to vote for dissolution."

So for my associations, I would need 50% of total eligible votes, for which I am 2 short at the moment, or I need 2/3 of the actual votes case, whichever is smaller.

Again I am not trying to get into a legal debate here, I have no questions regarding the law, or covenants. If you want to debate applicable law, we can do that, but lets move to another thread, and please read the entirety of the act you wish to debate on.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 6:56 AM

If you read 47F, it makes it clear certain sections do not apply in certain circumstances. For instances most sections are not applicable to associations former before jan 1st 1999, and most sections are not applicable to associations of under 20 members.

In my case, 47F applies in regards to use of assessments, it does not apply for termination.

Yup, I see that the assessment section can apply to pre Jan 1 1999 planned communities, whereas the termination section will apply to jan 1, 1999 and later planned communities, with caveats.

I think command of one's facts is important when making an argument to one's fellow members. I think this is why the discussion here often segues into areas that people think the OP might not have considered.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 7:16 AM

Quoting that section:
"Unlike a planned community subject to the PCA where 80% of the owners must approve the termination of the planned community, the Nonprofit Act allows two‑thirds of the votes cast or a majority of the votes entitled to be cast on the plan of dissolution, whichever is less, to vote for dissolution."

So for my associations, I would need 50% of total eligible votes, for which I am 2 short at the moment, or I need 2/3 of the actual votes case, whichever is smaller.

Assuming the NC PCA section on termination does not apply; assuming the governing docs (declaration, articles of incorporation) are silent about termination, then per the nonprofit corp act, dissolution (as it is called in corporate law) may occur "by two-thirds of the votes cast or a majority of the votes entitled to be cast on the plan of dissolution, whichever is less."

But as noted above, this only dissolves the corporation. Dissolution does not do away with the covenants. Nor does dissolution do away with the obligation to pay assessments. Nor does any common area cease to be held by the corporation. For the purposes of "winding up its affairs," the corporation continues as a legal entity.

Note that a dissolved corporation can still be sued. For these you would have to amend the covenants.

Given the interests of your neighbors in maintaining certain common areas, persuading your neighbors to vote for such an amendment seems to present a high bar.

The suggestions at this forum aim to prepare a person (not necessarily you; but whoever is reading here) for meetings with an attorney.

JackS20 (North Carolina)
Posts: 271

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 5:35 AM

Posted By GuyM1 on 05/02/2023 4:41 AM
Can you afford to move? If so move and make sure of the next place. This will take years off your life...I know!

Lol, perhaps it would, but I'm sitting on a nice setup. 8.5 acres surrounded by trees in one of the fastest growing areas of the nation. I want to wait another 10 years before selling it. It is a quite nice area, my neighbors are amazingly great, just no one cares enough to properly handle the association. Either they will start caring, I will find 2 votes to dismantle it, or it will go into receivership, which after I am sure I will find 2 more votes. Either way, I'm leaving the board.

I would not leave the board! why give up the advantages the board postion gives you until the situation is resolved in your favor.
My experience with apathetic HOA membership is that most of them think of the HOA as a company they have to pay and the HOA should be serving them and giving them something for their money.

They do not view it as an equal partnership of business partners in a joint real-estate investment, which is what an HOA is.

IN every survey we have done we always get 2x to 3x more responses when we threaten or ask questions about spending thier money. And they are typically penny wise pound foolish. The latest survey we told them we were going to pay for an audit because the bylaws require it 30 out of 32 people said it wasn't needed and a waste of money. I can guarantee you none of them have looked at the HOA financials because if they did they would't be saying that.

think like a consumer and focus on the money, that's the only way to get the engaged unfortunately.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 7:35 AM

Posted By JustinC5 on 05/02/2023 7:16 AM

Quoting that section:
"Unlike a planned community subject to the PCA where 80% of the owners must approve the termination of the planned community, the Nonprofit Act allows two‑thirds of the votes cast or a majority of the votes entitled to be cast on the plan of dissolution, whichever is less, to vote for dissolution."

So for my associations, I would need 50% of total eligible votes, for which I am 2 short at the moment, or I need 2/3 of the actual votes case, whichever is smaller.

Assuming the NC PCA section on termination does not apply; assuming the governing docs (declaration, articles of incorporation) are silent about termination, then per the nonprofit corp act, dissolution (as it is called in corporate law) may occur "by two-thirds of the votes cast or a majority of the votes entitled to be cast on the plan of dissolution, whichever is less."

But as noted above, this only dissolves the corporation. Dissolution does not do away with the covenants. Nor does dissolution do away with the obligation to pay assessments. Nor does any common area cease to be held by the corporation. For the purposes of "winding up its affairs," the corporation continues as a legal entity.

Note that a dissolved corporation can still be sued. For these you would have to amend the covenants.

Given the interests of your neighbors in maintaining certain common areas, persuading your neighbors to vote for such an amendment seems to present a high bar.

The suggestions at this forum aim to prepare a person (not necessarily you; but whoever is reading here) for meetings with an attorney.

I think you lack the context and facts to form the assumptions you are. I'm really not trying to debate facts I have already addressed with an attorney, if you want to lets move to a thread specific on legal aspects of terminating associations within NC. If you are truly interested in all of this, the book i cited above is out of an amazing workshop the nc bar put on. It will cover everything you seem curious about, and is not that expensive, cheapest text book in my library.

Our governing documents while not outlining vote percentages, handles the concerns you are bring up. We will be required to sell two small parcels of land, which have an assessed value of $0. We already have members adjacent interested in them. Our governing documents shift the private road and gate easement into a shared easement maintenance agreement by the fronting lots. The horse trail easements and the river access easements have already been terminated.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 8:11 AM
Our governing documents while not outlining vote percentages, handles the concerns you are bring up. We will be required to sell two small parcels of land, which have an assessed value of $0. We already have members adjacent interested in them. Our governing documents shift the private road and gate easement into a shared easement maintenance agreement by the fronting lots. The horse trail easements and the river access easements have already been terminated.

Good to read.

What about this looming $500,000 expense? Would some owners vote against amending the covenants because it will result in them having to pay more than they would if the covenants remained?

SheliaH (Indiana)
Posts: 6,964

Posted:

What Jack said.

You can argue with ElleN all you want about the legalities of your documents, state law and all that, but the fact is that you will need to keep this in mind, especially if someone says "screw it, let's just end the association." It would be great if it were that easy, but it's not, or if you could do this without an attorney but you can't. Reality can suck like that.

You are a board member and if you have the come to Jesus meeting I suggested above, you and your colleagues better be prepared for the hard questions. In some cases the answer will be you don't know, but will consult an attorney or someone else about your options.

It's fine to bring the "how do you get people to care" questions to this website, but there is no silver bullet and there have been dozens of conversations on this website about homeowner apathy. That's tge big problem with HOAS- they often lull people into a false sense if security and complacency because tge were told "the association" would oversee this stuff, no one talks zbout what kind of people make up the board and there are board members who font like being questioned, sharing information or being outvoted.

Now back to your original question. You laid out all the problems your association is facing- why not talk with your colleagues on which ones are the most serious and list them in a letter to the community announcing a date and time of a special meeting? I'd also consider making it available via Zoom and/or conference call, so people who can't attend in person can still participate.

Lay everything out and let the games begin. You can say pointing fingers won't fix this - EVERYONE has to get involved because tge board can't do it alone. It's that or receivership- the homeowners must choose and live with the consequences.

Deep down, you knew all this when you posed your question, do if someone or several people had to spell it out, here you go. Quitting the board won't really help you - in fact, that will set you up for even more drama because you're the treasurer. Even if you haven't had tge spot for very long, that won't stop people from blaming you. Is it fair? He'll no, but it is what it is, and as treasurer you believe 8n telling people the truth, thus your suggestion for having the meeting.

If they yell about recalling you, tell them that won't be necessary because you'll turn in your resignation and help with the transition to the next one. That should shut them up.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

BillD16 (Texas)
Posts: 971

Posted:

Quote:

Posted By JustinC5 on 05/02/2023 5:31 AM

Posted By MelissaP1 on 05/02/2023 4:29 AM
Ellen... Think we got us a case of "I want to hear what is in my head" because I am right you are wrong... Starting to think part of the issues is not far from one's own perception... Good luck!

My original post asked a people handling question, as I am lacking in the capability …

Imagine my shock.

Have you considered that perhaps you’re not getting the responses you want from people because you’re a jerk?

“He who knows all the answers has not been asked all the questions.” - Confucius (attributed)

“And if any man think that he knoweth any thing, he knoweth nothing yet as he ought to know.” - 1 Corinthians 8:2 (KJV)

I feel I’m wasting my time, but: when people come here and ask questions, the regulars here who are graciously attempting to provide helpful answers often feel the need to know more information than originally provided. Plus when the OP includes flat statements about “upcoming $500K expenses” etc, it’s only natural for someone to think “that may be relevant to the situation”. and ask further.

You appear to be a walking, talking example of the Dunning-Kruger effect and, consequently, I’m sure you’re a real peach to work with. Rotsa ruck, pal. I’m outta here.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By BillD16 on 05/02/2023 9:32 AM

Posted By JustinC5 on 05/02/2023 5:31 AM

Posted By MelissaP1 on 05/02/2023 4:29 AM
Ellen... Think we got us a case of "I want to hear what is in my head" because I am right you are wrong... Starting to think part of the issues is not far from one's own perception... Good luck!

My original post asked a people handling question, as I am lacking in the capability …

Imagine my shock.

Have you considered that perhaps you’re not getting the responses you want from people because you’re a jerk?

“He who knows all the answers has not been asked all the questions.” - Confucius (attributed)

“And if any man think that he knoweth any thing, he knoweth nothing yet as he ought to know.” - 1 Corinthians 8:2 (KJV)

I feel I’m wasting my time, but: when people come here and ask questions, the regulars here who are graciously attempting to provide helpful answers often feel the need to know more information than originally provided. Plus when the OP includes flat statements about “upcoming $500K expenses” etc, it’s only natural for someone to think “that may be relevant to the situation”. and ask further.

You appear to be a walking, talking example of the Dunning-Kruger effect and, consequently, I’m sure you’re a real peach to work with. Rotsa ruck, pal. I’m outta here.

Bill

You are all the classic examples of an HOA member. The person who went to their attorney for clarification is not the one suffering from Dunning-Kruger effect, that would be the people who did not read the acts, have no access to the covenants, and who are arguing an unasked question.

I'm on the board with a 92% vote in, and have zero issues with my community, outside the one person who wants to argue the covenants and laws when they have not read them nor consulted an attorney, much like all of you.

I don't have all the answers, that is why I engaged an attorney and sought my legal advice there, instead of here.

I can quote the bible too like a jack ass too, just like you.

"And the king said unto her, What aileth thee? And she answered, This woman said unto me, Give thy son, that we may eat him to day, and we will eat my son to morrow. So we boiled my son, and did eat him: and I said unto her on the next day, Give thy son, that we may eat him: and she hath hid her son...." (II Kings 6:28-29)

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By SheliaH on 05/02/2023 9:16 AM
What Jack said.

You can argue with ElleN all you want about the legalities of your documents, state law and all that, but the fact is that you will need to keep this in mind, especially if someone says "screw it, let's just end the association." It would be great if it were that easy, but it's not, or if you could do this without an attorney but you can't. Reality can suck like that.

You are a board member and if you have the come to Jesus meeting I suggested above, you and your colleagues better be prepared for the hard questions. In some cases the answer will be you don't know, but will consult an attorney or someone else about your options.

It's fine to bring the "how do you get people to care" questions to this website, but there is no silver bullet and there have been dozens of conversations on this website about homeowner apathy. That's tge big problem with HOAS- they often lull people into a false sense if security and complacency because tge were told "the association" would oversee this stuff, no one talks zbout what kind of people make up the board and there are board members who font like being questioned, sharing information or being outvoted.

Now back to your original question. You laid out all the problems your association is facing- why not talk with your colleagues on which ones are the most serious and list them in a letter to the community announcing a date and time of a special meeting? I'd also consider making it available via Zoom and/or conference call, so people who can't attend in person can still participate.

Lay everything out and let the games begin. You can say pointing fingers won't fix this - EVERYONE has to get involved because tge board can't do it alone. It's that or receivership- the homeowners must choose and live with the consequences.

Deep down, you knew all this when you posed your question, do if someone or several people had to spell it out, here you go. Quitting the board won't really help you - in fact, that will set you up for even more drama because you're the treasurer. Even if you haven't had tge spot for very long, that won't stop people from blaming you. Is it fair? He'll no, but it is what it is, and as treasurer you believe 8n telling people the truth, thus your suggestion for having the meeting.

If they yell about recalling you, tell them that won't be necessary because you'll turn in your resignation and help with the transition to the next one. That should shut them up.

Thank you, most excellent post. Im not here to argue about the law aspects, I have an attorney on this matter to keep me in line with the law. I've asked them more than once to make a new thread if they want to discuss applicable law.

There won't be a recall or blaming of me, I was asked this morning not to resign until we have this sorted out. It isnt a "response of conflict" from the association, its more of a "well i dont want to be the one to solve it" response, which I understand, i dont want to be as well.

I have had most of the community reach out and thank me for being transparent. No one wants to take my spot with the current situation. There is only one person unhappy with my action on here, and they are simply another arm chair lawyer who tries to claim all kinds of silly rights that simply dont exist. "Decisions have to be unanimous vote" etc.

Right now I am drafting a letter that my personal real estate attorney is going to review with the options to move forward. Explaining potential paths, and the pros/cons of both. I personally dont care what route.

1) termination
2) expel members outside the gated road
3) do nothing, go into receivership (which would result in a call for another for for 1 and probably end up in termination)
4) members step up and handle it all

I was to include option 5, hire a management firm, but none of the ones servicing locally will take on an association of our size and as far from the city as we are.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JustinC5 on 05/01/2023 2:05 PM

We are well within the receivership danger zone right now.

I went against the secretary and notified the membership of the issues i am 100% certain of, against the wishes of the secretary. I did not get much response.

The NC Nonprofit Corp statute says that, during a "judicial dissolution" a receiver may be appointed. This seems to be the only path to receivership in NC. A judicial dissolution requires someone to bring suit and prove the board is either deadlocked in the management of its affairs; or the board is acting illegally, fraudulently or oppressively; or the corporation cannot carry out its purpose; and the like.

The OP says he is the new treasurer. I am not sure if he is also a director. Some bylaws do not require the treasurer to also be a director.

If he's going around talking to owners, maybe he should clarify to these owners that it might be he himself who brings suit to dissolve the corporation and get the court to order the appointment of a receiver.

Maybe the place is poorly run and has been run poorly for over a decade. This would all be with the consent of the mere 13 or 14 owners, who could have examined records, asked questions and replaced the board at any time.

I have found it's so important to accept that others on a board might not be as competent as one's self.

But this does not change the fact that a board majority has all the power.

Rather than talk about receivership, maybe the better strategy would be to seek enforcement of the covenants? Or if the OP is not going to be affected financially by a board's poor decision-making, then why engage in all the sturm und drang? Instead, go enjoy this 8.5 acre slice of wooded heaven. Under these circumstances where the HOA cannot really do anything to the OP, might this be the better side of valor?

Life's short. To clarify things, a list of the pros and cons of being involved with the board might be worthwhile.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 10:32 AM

Posted By JustinC5 on 05/01/2023 2:05 PM

We are well within the receivership danger zone right now.

I went against the secretary and notified the membership of the issues i am 100% certain of, against the wishes of the secretary. I did not get much response.

The NC Nonprofit Corp statute says that, during a "judicial dissolution" a receiver may be appointed. This seems to be the only path to receivership in NC. A judicial dissolution requires someone to bring suit and prove the board is either deadlocked in the management of its affairs; or the board is acting illegally, fraudulently or oppressively; or the corporation cannot carry out its purpose; and the like.

The OP says he is the new treasurer. I am not sure if he is also a director. Some bylaws do not require the treasurer to also be a director.

If he's going around talking to owners, maybe he should clarify to these owners that it might be he himself who brings suit to dissolve the corporation and get the court to order the appointment of a receiver.

Maybe the place is poorly run and has been run poorly for over a decade. This would all be with the consent of the mere 13 or 14 owners, who could have examined records, asked questions and replaced the board at any time.

I have found it's so important to accept that others on a board might not be as competent as one's self.

But this does not change the fact that a board majority has all the power.

Rather than talk about receivership, maybe the better strategy would be to seek enforcement of the covenants? Or if the OP is not going to be affected financially by a board's poor decision-making, then why engage in all the sturm und drang? Instead, go enjoy this 8.5 acre slice of wooded heaven. Under these circumstances where the HOA cannot really do anything to the OP, might this be the better side of valor?

Life's short. To clarify things, a list of the pros and cons of being involved with the board might be worthwhile.

Look Ive asked if yo uwant to debate the laws, to make a new thread and i will do that with you there. I'm not going to cite statutes further for you in here. You are incorrect on your assumptions of the receivership

Please, if you want to debate or discuss applicable laws, please create a new thread. We can chat about it there, I'll continue to cite things if needed, but not in this thread. You are not correct on the receivership assumptions.

ElleN (Idaho)
Posts: 4,420

Posted:

No thanks. On receivership for NC corporations, see

§ 55A-14-31. Procedure for judicial dissolution.

§ 55A-14-32. Receivership

at https://www.ncleg.net/enactedlegislation/statutes/pdf/bychapter/chapter_55a.pdf

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 12:37 PM
No thanks. On receivership for NC corporations, see

§ 55A-14-31. Procedure for judicial dissolution.

§ 55A-14-32. Receivership

at https://www.ncleg.net/enactedlegislation/statutes/pdf/bychapter/chapter_55a.pdf

I've asked for you to cease spamming my thread with irrelevant non sense, yet you continue. I guess this is how you entertain yourself?

I don't know your legal background, but I strongly suspect it is not NC planned community law, thankfully the advice I am following is coming from an attorney with that background.

LoriM15 (Florida)
Posts: 1,009

Posted:

The bottom line is that the only thing that is going to persuade the other homeowners is money. The rest of your list of things that have been done wrong is just noise. They clearly don't care about the lack of records or reserve studies or insurance. Money talks.

You need to lay out a realistic case where you can show if they don't get their act together, they are not only going to have to pay the $500,000 upcoming expense, but also that they have a shortfall of cash on hand for expenses and they are in danger of fines and penalties for missing tax returns and possible fines for the missing records. They are only going to pay attention if the dollar amount is painful.

I don't know the ins and outs of receivership in your state. But I don't know why you don't just turn in your association to the proper authorities and let the state do what they have to do. Nobody else seems to care and your board is clearly dysfunctional. What's worth saving?

TimB4 (Tennessee)
Posts: 21,059

Posted:

It took me three years to semi-inspire the membership.

I did this through newsletters, which (I believe) educated the membership.
The articles always thanked the board for serving but also pointed out where they violated the governing documents or applicable statutes.

I say semi-inspired because I really didn't see any real change until, as Lori pointed out, money became involved (a proposed increase in assessments). At that meeting, I saw the membership ask all the questions I raised in the newsletter.

However, you are on the board. So, you might simply point out the the destruction of records was a violation of corporate statutes and move to remove the individual from the office of Secretary. Offer to take over the position in addition to the treasurer position.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It should be pointed out what happens in a receivership a lawyers is NOT telling you. When a HOA goes into Receivership it basically loses it's credit. That means that banks may not offer the "best" or low rate mortgages. Say good by to FHA type loans or other federal backed up loan types. Say hello to a limited number of available buyers. Also will notice ANY refinancing rates will be much higher as well. Banks don't like to lend money as readily to HOA's with high rental or in really bad credit status like receivership.

The HOA board is eliminated. No owners will be on the board. It will be ALL controlled by the lawyer or receiver. Which is NOT going to be cheap. They may charge as much as a management company or higher as they are professionals. That means the HOA no longer sets the dues members pay. The Receiver will set how much the dues are. Which will include their fees and expenses.

The HOA will still have it's restrictions. They are on file with the county and run with the property. So not really giving up any restrictions. Are giving up the ability to make any changes to them. What the Receiver says goes.

Receivership basically devalues everyone's property and makes it harder to sell. Just something to think about...

Me and Ellen do not always see eye to eye but I do respect them for their knowledge. Plus they do a good job at finding laws that apply. Listening to a lawyer is not always best advice. Especially if you have a lawyer that says "I will do whatever you tell me to do". That is a RED flag.

Also have to point that it is YOUR concerns on that list. It does NOT mean they are valid. A HOA is a corporation it is NOT personal. It is not run like your personal home expenses. So things that make you go "mmm" may not apply with how a corporation run.

Please watch the attitude. Many of us have been where you were at. We were willing to LISTEN. No one has all the right answers if they don't have the right information. I am still confused on how your on the board if your not a contributor of money to your HOA. Good luck on that. Seems I would not listen to someone in my HOA that doesn't contribute a dime but tells me how it should be spent.

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

JustinC5, every comment of mine has been directed to one thing or another you posted in your first post here. If you did not think these things were relevant, then bad on you for posting them. Bad on you a second time for refusing to answer questions about these things. Bad on you a third time for being snotty when people asked you questions. There was a polite answer to every question I asked.

When the board votes you down, keep in mind it might have nothing to do with whether you are legally in the right or in the wrong. It may have everything to do with simply not liking your style. You're working with group dynamics. Some thought about how to communicate to give your wishes the best chances of getting support is important.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 4:32 PM
JustinC5, every comment of mine has been directed to one thing or another you posted in your first post here. If you did not think these things were relevant, then bad on you for posting them. Bad on you a second time for refusing to answer questions about these things. Bad on you a third time for being snotty when people asked you questions. There was a polite answer to every question I asked.

When the board votes you down, keep in mind it might have nothing to do with whether you are legally in the right or in the wrong. It may have everything to do with simply not liking your style. You're working with group dynamics. Some thought about how to communicate to give your wishes the best chances of getting support is important.

I asked a specific question, I made it clear I was not wanting to debate the law, as I had retained an attorney. I did ask nicely that you move your irrelevant and invalid legal debate to another thread, you were rude, snotty, and frankly speaking out the side of your neck with bad interpretation of multiple laws you are not familiar with.

The board is not voting me down, neither is the association. I have majority vote among both. I dont see where you get that idea, but since you seem to have reading comprehension issues, it might lay in that.

Enjoy your miserable life where your only satisfaction is being an online troll.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By ElleN on 05/02/2023 4:32 PM
JustinC5, every comment of mine has been directed to one thing or another you posted in your first post here. If you did not think these things were relevant, then bad on you for posting them. Bad on you a second time for refusing to answer questions about these things. Bad on you a third time for being snotty when people asked you questions. There was a polite answer to every question I asked.

When the board votes you down, keep in mind it might have nothing to do with whether you are legally in the right or in the wrong. It may have everything to do with simply not liking your style. You're working with group dynamics. Some thought about how to communicate to give your wishes the best chances of getting support is important.

I asked a specific question, I made it clear I was not wanting to debate the law, as I had retained an attorney. I did ask nicely that you move your irrelevant and invalid legal debate to another thread, you were rude, snotty, and frankly speaking out the side of your neck with bad interpretation of multiple laws you are not familiar with.

The board is not voting me down, neither is the association. I have majority vote among both. I dont see where you get that idea, but since you seem to have reading comprehension issues, it might lay in that.

Enjoy your miserable life where your only satisfaction is being an online troll.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By MelissaP1 on 05/02/2023 3:08 PM
It should be pointed out what happens in a receivership a lawyers is NOT telling you. When a HOA goes into Receivership it basically loses it's credit. That means that banks may not offer the "best" or low rate mortgages. Say good by to FHA type loans or other federal backed up loan types. Say hello to a limited number of available buyers. Also will notice ANY refinancing rates will be much higher as well. Banks don't like to lend money as readily to HOA's with high rental or in really bad credit status like receivership.

The HOA board is eliminated. No owners will be on the board. It will be ALL controlled by the lawyer or receiver. Which is NOT going to be cheap. They may charge as much as a management company or higher as they are professionals. That means the HOA no longer sets the dues members pay. The Receiver will set how much the dues are. Which will include their fees and expenses.

The HOA will still have it's restrictions. They are on file with the county and run with the property. So not really giving up any restrictions. Are giving up the ability to make any changes to them. What the Receiver says goes.

Receivership basically devalues everyone's property and makes it harder to sell. Just something to think about...

Me and Ellen do not always see eye to eye but I do respect them for their knowledge. Plus they do a good job at finding laws that apply. Listening to a lawyer is not always best advice. Especially if you have a lawyer that says "I will do whatever you tell me to do". That is a RED flag.

Also have to point that it is YOUR concerns on that list. It does NOT mean they are valid. A HOA is a corporation it is NOT personal. It is not run like your personal home expenses. So things that make you go "mmm" may not apply with how a corporation run.

Please watch the attitude. Many of us have been where you were at. We were willing to LISTEN. No one has all the right answers if they don't have the right information. I am still confused on how your on the board if your not a contributor of money to your HOA. Good luck on that. Seems I would not listen to someone in my HOA that doesn't contribute a dime but tells me how it should be spent.

I dont want receivership, I have a understanding of it guided by an attorney.

Anyone can google "NC HOA LAWS" like Ellen has, but you actually have read them, then have enough information and context to grok if they are applicable, that is where Ellen failed. She did not read them, which would have told her certain articles apply based on the size and age of the association. She insisted on continuing to argue it, even after it was requested she make a new thread for her topic (the legal aspects, as this one is about the person aspects).

I do contribute to the HOA in accordance with the covenants and the state law, if anyone does not like that then they should have read the covenants prior to buying in. My dues are $300 a year like everyone elses, they just cant be spent on limited common property, per the covenants and state law. I'm not sure where you got the idea Im not contributing, then again this thread is confusing as some troll flooded it with irrelevent, offtopic and incorrect legal discussions.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By TimB4 on 05/02/2023 1:51 PM
It took me three years to semi-inspire the membership.

I did this through newsletters, which (I believe) educated the membership.
The articles always thanked the board for serving but also pointed out where they violated the governing documents or applicable statutes.

I say semi-inspired because I really didn't see any real change until, as Lori pointed out, money became involved (a proposed increase in assessments). At that meeting, I saw the membership ask all the questions I raised in the newsletter.

However, you are on the board. So, you might simply point out the the destruction of records was a violation of corporate statutes and move to remove the individual from the office of Secretary. Offer to take over the position in addition to the treasurer position.

Thank you for a relevant on topic excellent post.

We called a meeting, and are are going to vote for termination of the association and covenants. We have an attorney (not mine) who is going to show to the meeting and handle it. I polled all neighbors I had not talked to, I have 80% support for termination, I need 51%. The other 20% is split unsure and no.

We will be selling the smaller (sub 1 acre) lots that the association owns to adjoining lots, and entering a road maintenance agreement for the properties along the road easement.

JustinC5 (North Carolina)
Posts: 42

Posted:

Quote:

Posted By LoriM15 on 05/02/2023 1:41 PM
The bottom line is that the only thing that is going to persuade the other homeowners is money. The rest of your list of things that have been done wrong is just noise. They clearly don't care about the lack of records or reserve studies or insurance. Money talks.

You need to lay out a realistic case where you can show if they don't get their act together, they are not only going to have to pay the $500,000 upcoming expense, but also that they have a shortfall of cash on hand for expenses and they are in danger of fines and penalties for missing tax returns and possible fines for the missing records. They are only going to pay attention if the dollar amount is painful.

I don't know the ins and outs of receivership in your state. But I don't know why you don't just turn in your association to the proper authorities and let the state do what they have to do. Nobody else seems to care and your board is clearly dysfunctional. What's worth saving?

Thank you for the excellent post, 100% agree all the way, everything you are saying is exactly what I have expressed to the association.

No it is not worth saving, and I have 29% more votes than I need to terminate it as of this morning. So onward.

Receivership is an expensive process, which I wanted to avoid. Going into receivership would just result in us voting to terminate anyhow, with added exepsnses along the way.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Ellen is NOT a troll. There was no need to insult someone who was trying to HELP you. Again I don't always agree with Ellen or their advice. However, I would not call it "trolling" or not helpful to others who may read this thread in a similar situation. We get people on here that just READ other people's post but don't actually participate. Many threads will get opened up months to years later on occassion. Hence why advice isn't always to cover 1 person who asks but others who we don't know maybe "lurking" or perusing.

I think once people find out the consequences of going into receivership going to change minds. People often have the wrong vision of what an HOA is or does. Which may be the case here. Looking at the HOA in the eyes of the tainted not of the eyes of the educated. A little education of what an HOA is and does goes a long way in making things better.

Former HOA President

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By JustinC5 on 05/03/2023 3:13 AM

Posted By MelissaP1 on 05/02/2023 3:08 PM
I do contribute to the HOA in accordance with the covenants and the state law, if anyone does not like that then they should have read the covenants prior to buying in. My dues are $300 a year like everyone elses, they just cant be spent on limited common property, per the covenants and state law. I'm not sure where you got the idea Im not contributing, then again this thread is confusing as some troll flooded it with irrelevent, offtopic and incorrect legal discussions.

I get why you think Ellen can sound condescending and/or elitist at times. Whether it's intentional or not I honestly don't know. However, your assertion that she is a troll is ridiculous. She goes overboard on backing her beliefs with very specific documentation that she cites. Just because you don't agree with her doesn't give you justification to resort to name calling.

I realize we are now living in a world where if someone disagrees with you the in thing to do is to hit back with petty comments or insults instead of just not responding. I wish more people would learn to simply say, "I'm afraid we are going to have to agree to disagree" and move on.

JustinC5 (North Carolina)
Posts: 42

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Posted By MelissaP1 on 05/03/2023 4:46 AM
Ellen is NOT a troll. There was no need to insult someone who was trying to HELP you. Again I don't always agree with Ellen or their advice. However, I would not call it "trolling" or not helpful to others who may read this thread in a similar situation. We get people on here that just READ other people's post but don't actually participate. Many threads will get opened up months to years later on occassion. Hence why advice isn't always to cover 1 person who asks but others who we don't know maybe "lurking" or perusing.

I think once people find out the consequences of going into receivership going to change minds. People often have the wrong vision of what an HOA is or does. Which may be the case here. Looking at the HOA in the eyes of the tainted not of the eyes of the educated. A little education of what an HOA is and does goes a long way in making things better.

I took your excellent advice, and applied it to the document we are distributing with our call for a meeting.

I don't want receivership at all, no one does, especially after my attorney explained it prior to this post. I quoted my attorney on receivership, and included along with the section on receivership from the bar association's text book on planned communities. I also included 5 other options on moving forward, and I asked the association as a whole to present any other ideas they have that would leave us withing the bounds of the law and our governing documents.

I apologize for using the word troll, I don't have another way to describe their behavior within this thread. From all outward appearances and without knowing them, it appears to me their intentions were simply to derail the thread from it's original topic. They were aware I had already engaged an attorney specializing in HOA and real estate law within my state prior to this post. Their interpretation was made without the needed details of the association and it's governing documents required to property understand what laws and what articles were applicable, they completely ignored sections and articles that carried various exclusions and over rides, their reading of the laws ran in conflict with my attorney's reading of the laws, the NC bar associations reading of the laws, and the plain reading of the laws. They chose to ignore applicable published and settled case law.

Their posts in combination with my replies equated a debate better suited for another thread, and their "advice" should not be taken as legal advice. Anyone needing legal advice on NC planned communities should engage with an attorney specializing in planned communities in NC. Our laws have so many exclusions and overrides, that it is not a matter to be handled by a layperson (myself included).

JustinC5 (North Carolina)
Posts: 42

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Posted By JohnT38 on 05/03/2023 6:53 AM

Posted By JustinC5 on 05/03/2023 3:13 AM

Posted By MelissaP1 on 05/02/2023 3:08 PM
I do contribute to the HOA in accordance with the covenants and the state law, if anyone does not like that then they should have read the covenants prior to buying in. My dues are $300 a year like everyone elses, they just cant be spent on limited common property, per the covenants and state law. I'm not sure where you got the idea Im not contributing, then again this thread is confusing as some troll flooded it with irrelevent, offtopic and incorrect legal discussions.

I get why you think Ellen can sound condescending and/or elitist at times. Whether it's intentional or not I honestly don't know. However, your assertion that she is a troll is ridiculous. She goes overboard on backing her beliefs with very specific documentation that she cites. Just because you don't agree with her doesn't give you justification to resort to name calling.

I realize we are now living in a world where if someone disagrees with you the in thing to do is to hit back with petty comments or insults instead of just not responding. I wish more people would learn to simply say, "I'm afraid we are going to have to agree to disagree" and move on.

I informed her I had an attorney specializing in HOA law within my state. I went as far to give her references as to why her interpretations were incorrect in my case. I informed her that I would gladly continue to discuss this in an appropriate thread, but this thread was not intended for legal debate. In all outward appearances, her actions appeared to be an attempt to derail the topic of the thread, with misinterpreted (per my attorney) views of the law. To me, intentionally derailing a thread after the author asked them to stop, is trolling. This is not a new term, this is what we called it back in the 1980 and 1990s on BBSs, maybe the younger generations have a newer meaning for the word troll?

Anyone of need of legal advice on HOAs should not use the legal advice of a layperson, but engage an attorney specializing in HOAs in their state. Taking Ellens opinion on the laws would have caused additional issues for our association going forward.

If anyone wants an understanding of NC planned community laws, I suggest the book "Common Interest Communities In North Carolina", it is published by the NC Bar association, and explains all the aspects Ellen missed, especially the complex rules that apply to what is applicable to what communities and what is not. You will also need knowledge of the size of the community, when it was formed, and if they voluntarily opted into certain laws.

ElleN (Idaho)
Posts: 4,420

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Posted By JustinC5 on 05/03/2023 6:58 AM
it appears to me [her; ElleN's] intentions were simply to derail the thread from [its] original topic. [She is] aware I had already engaged an attorney specializing in HOA and real estate law within my state prior to this post. [Her] interpretation was made without the needed details of the association and [its] governing documents required to property understand what laws and what articles were applicable, [she] completely ignored sections and articles that carried various exclusions and over rides

I own that I initially overlooked the number of homes in your HOA (given in your very first post, so yes, bad on me) and the applicability section of the NC Planned Community Act. I own that I should not have leapt to the conclusion that just because the assessment section of the PCA applies, this does not mean all of the PCA applies. It's your right not to be forthcoming on the year of creation and on other details, like this $500,000 expense looming ahead.

You say you now have the votes to dissolve (not "terminate") the corporation.

It remains questionable as to whether you have the votes to terminate the covenants.

I will continue to discuss what NC law says on the subject of terminating the covenants to the extent I remain interested.

ElleN (Idaho)
Posts: 4,420

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Posted By JustinC5 on 05/02/2023 4:05 AM
[Regarding termination of the covenants] In absence of coverage in the covenants itself, it falls back to [the Nonprofit Corporation] statute for clarification. Thus it is 50% to terminate the associations, 50% to modify deed restrictions, the covenants are placed as a deed restriction. While technically maybe it wont terminate the covenants I guess, but they will have no more applicable properties they apply to, as such it functionally terminates them.

Nowhere does the Nonprofit Corporation Act speak to modifying or amending covenants (a.k.a. "deed restrictions"). As has been explained, dissolving the corporation (pursuant to the provisions of the Nonprofit Corporation Act, for starters) is one thing. Terminating the covenants is another.

The OP has asserted the NC Planned Community Act's section on termination does not apply. See the applicability section of the Act at 47F-1-102.

The NC Planned Community Act's section § 47F-2-117 ("Amendment of declaration") might apply; it depends.

North Carolina case law has some discussion of terminating covenants. From what I am seeing, the only relevant precedent speaks of what the Declaration itself requires for terminating the covenants. See https://law.justia.com/cases/north-carolina/, for starters.

On this matter, in preparation for meeting with an attorney, the very first thing I would be doing is checking the Declaration to see what it says about amending or terminating the covenants. Then I would see how statute section § 47F-2-117 applies, if it applies at all. I would also have an eye on NC Statute Chapter 47B. Real Property Marketable Title Act, in case we are talking about covenants on the order of 30 years old.

JustinC5 (North Carolina)
Posts: 42

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Posted By ElleN on 05/03/2023 7:24 AM

Posted By JustinC5 on 05/03/2023 6:58 AM
I own that [she doesn't have the expertise, record access, or background to make give legal advice on this matter], this does not mean all of the PCA applies [Editor's note, the editor has previously recommended and cited a book that clarifies what portions of the PCA apply in what circumstances]. It's your right not to be forthcoming on the year of creation and on other details, like this $500,000 expense looming ahead [when these were never part of the question asked, or topic that advise was sought on].

You say you now have the votes to dissolve (not "terminate") the corporation.

It remains questionable as to whether you have the votes to terminate the covenants.

I will continue to [derail the thread into offtopic discussion, and act in a fashion that is commonly referred to as a troll on networked bulletin boards].

Our admittedly poorly written governing documents refer to the action as terminate, I understand that is confusing, as I find myself shifting from the statutory term and the one contained withing our governing documents. I concede they were poorly written, and no one argues that.

I appreciate your troll-like editing of my comments, I have returned the favor.

The matter as to whether we have the votes to terminate the covenants does not remain questionable to my attorney, myself, nor our governing documents, it only remains in question to those that are not privy to the information, and have no need to be privy to it.

JustinC5 (North Carolina)
Posts: 42

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Posted By ElleN on 05/03/2023 8:11 AM

[Irrelevant, misunderstood, misquoted and incomplete comments intended to further derail the thread] [Editor note, see page 739 of "Common Interest Communities in North Carolina, Second Edition" for an excellent list of caselaw applicable to NC HOA law, including summaries.]

I ask again, as it is clear your intentions are to derail any chance of productive discussion in relation to the original question of the thread, that you please move your legal debate to it's own thread. I will gladly participate as my time allows in that thread.

ElleN (Idaho)
Posts: 4,420

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Posted By JustinC5 on 05/03/2023 8:39 AM
Our admittedly poorly written governing documents refer to the action as terminate, I understand that is confusing, as I find myself shifting from the statutory term and the one contained withing our governing documents.

The CC&Rs are likely speaking to terminating the covenants, which again is different from dissolving the corporation. You seem to want to conflate the two, and 'it just ain't so.'

This forum sees many posts from people wanting to terminate the covenants and dissolve the HOA corporation.

IIRC the only time I have seen the bulk (but not all) of covenants be formally terminated is when a state has a marketable record title statute. Caveats include area owned in common and assessments often still being enforceable, since the covenants on assessments are not "[land] use restrictions," and some states' MRTA pertain only to "use restrictions."

Some HOAs are "inactive," which I think is some kind of colloquialism for 'no one's been enforcing the covenants for years and they might very well be ruled abandoned by a court' and so on.

You are welcome to continue refusing to add any substance on the point.

For the above reasons, my own interest continues.