Amend Covenant Renewal Periods

You need to read the section in the covenants that address amending.

Typically you need 2/3 or more to agree.

To dissolve the corporation known as HOA, Inc. you simply file paperwork with the State but that does not eliminate the HOA.
The HOA was created by the covenants.
To dissolve the HOA you need to amend the covenants.

My suggestion, get a legal opinion from someone versed in property law.

Thanks Tim84. Yes, we have one strip of common property at an entrance; however, we have an interested party as it butts up against his lot (outside the HOA properties)

2/3 of the board can amend the Declaration/Covenants. We are going to file with the probate the following in terms of disposing of the common property:

(d) the right of the Board to dedicate or transfer all or any portion of the Common Property subject to such conditions as may be agreed to by the Owners. No such dedication or transfer shall be effective unless an instrument agreeing to such dedication or transfer has been approved by a majority of owners, in person or by proxy, in which a quorum (proxies shall count towards the quorum) was present at a meeting duly called for such purpose (or, if a meeting is not called, upon the affirmative vote of at least a majority of the votes cast in a referendum on the issue) and, so long as the Declarant has an option unilaterally to subject additional property to this Declaration as provided in Article IX hereof, by the Declarant.

As for Duration, we were going to amend the Article/Section concerning duration to begin with: "Section 3. Duration. All provisions of this declaration shall end if the Association is dissolved according to and in accordance with Alabama Law Section 10A-3-7.01(2024)." Followed by the usual renewal period language and voting requirements to end it.

That Alabama Section reads:

Section 10A-3-7.01

Voluntary Dissolution - Procedure.

(a) A nonprofit corporation may dissolve and wind up its affairs in the following manner:

(1) If there are members entitled to vote thereon, the board of directors shall adopt a resolution recommending that the nonprofit corporation be dissolved, and directing that the question of the dissolution be submitted to a vote at a meeting of members entitled to vote thereon, which may be either an annual or a special meeting. Written notice stating that the purpose, or one of the purposes, of the meeting is to consider the advisability of dissolving the nonprofit corporation, shall be given to each member entitled to vote at the meeting, within the time and in the manner provided in this chapter for the giving of notice of meetings of members. A resolution to dissolve the nonprofit corporation shall be adopted upon receiving at least two-thirds of the votes entitled to be cast by members present or represented by proxy at the meeting.

(2) If there are no members, or no members entitled to vote thereon, the dissolution of the corporation shall be authorized at a meeting of the board of directors upon the adoption of a resolution to dissolve by the vote of a majority of the directors in office.

(b) Upon the adoption of the resolution by the members, or by the board of directors if there are no members or no members entitled to vote thereon, a statement of intent to dissolve shall be executed for the nonprofit corporation by its president or a vice president, and by its secretary or an assistant secretary, and verified by one of the officers signing the statement, which statement shall set forth:

(1) The name of the nonprofit corporation.

(2) The names and respective addresses of its officers.

(3) The names and respective addresses of its directors.

(4) If there are members entitled to vote thereon, (i) a statement setting forth the date of the meeting of members at which the resolution to dissolve was adopted, that a quorum was present at the meeting, and that the resolution received at least two-thirds of the votes entitled to be cast by members present or represented by proxy at the meeting, or (ii) a statement that the resolution was adopted by a consent in writing signed by all members entitled to vote with respect thereto.

(5) If there are no members, or no members entitled to vote thereon, a statement of the fact, the date of the meeting of the board of directors at which the resolution to dissolve was adopted, and a statement of the fact that the resolution received the vote of a majority of the directors in office.

(6) The unique identifying number or other designation as assigned by the Secretary of State.

(c) The statement of intent to dissolve shall be delivered to the Secretary of State for filing.

(d) Upon the filing of a statement of intent to dissolve, the nonprofit corporation shall cease to conduct its affairs except insofar as may be necessary for the winding up thereof, and shall proceed to collect its assets and apply and distribute them as provided in this chapter.

(Acts 1984, No. 84-290, p. 502, §48; §10-3A-140; amended and renumbered by Act 2009-513, p. 967, §192; Act 2020-73, §10.)

I may have pressed the wrong "reply" button which did not send out a notice. I'm pinging here just in case I messed up.

Can you quote exactly what the covenants say about the board having the power to amend the covenants?

For every HOA I have seen (and this is many, many HOAs), only a vote of owners can amend the covenants, and even this has a huge caveat.

The developer/declarant //had// the right to amend the Declaration. However this right does not normally pass to the subsequent, volunteer board.

Huge caveat:
In Alabama and many other (all?) states, a court will enforce amendments only if the amendments are "reasonable". See for example: https://caselaw.findlaw.com/court/al-court-of-civil-appeals/1489641.html. Annotations of the latter appear at https://case-law.vlex.com/vid/miller-v-miller-s-888949355 .

If even just one owner objects to terminating the HOA (and not just the corporation), then the likelihood of a court saying termination is not reasonable is high.

The likelihood that your HOA will need 100% approval of owners to terminate the HOA and dissolve the corporation (two different things) is very high.

In addition, termination of the HOA will almost assuredly require amending the plats recorded with the city and/or county. For some years now, and before a city or county approves construction of a subdivision, many cities and counties have required subdivisions to have HOAs. Amending the plat is no small matter. It will require city or county approval. Consider calling the city land use department and explaining to them what your HOA wants to do. See if they will give you guidance.

I echo all, or nearly all, of what TimB4 posted.

I advise using this forum (HOATalk.com) to prepare yourself and the board for a meeting with a well-qualified HOA attorney.

(Bolding added by ElleN)

I do not understand. What you quoted from the covenants already says the renewal period is one year. Is this a typo?

As luck would have it, about two years ago people here at HOATalk discussed wording like that in your HOA's "Duration" covenant. With really good luck, and as it happens, the Alabama Supreme Court ruled on wording similar to that in your HOA's "Duration" covenant way back in 1987. That ruling has gone unchallenged and is still the law of Alabama.

A fair reading of the 1987 Alabama Supreme Court ruling is that the "unless" clause in your "Duration" covenant actually means that a majority of owners can eliminate the covenants at any time. Some might disagree, but if a majority of owners at your Alabama HOA wants to terminate the covenants, I now like their chances a lot more.

Questions? Ask them. But first, please consider at least skimming the Alabama decision here:https://law.justia.com/cases/alabama/supreme-court/1987/505-so-2d-382-1.html ( Hill v. Rice , 1987)

Note the steps the 1987-ish HOA took.

The thread where this was pretty intensely discussed by me and one or two others: https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/356874/view/topic/Default.aspx

If you want the step-by-step approach I now advise, post back.