Mandatory HOA Help!

We live in a small rural development with about 50 homes on 1 acre sites. The developer did not and will not provide or organize a HOA prior to selling lots. Our restrictions are basic and acceptable to all. The problem we are facing is future maintenance issues and of course, a few that do not follow guidelines. We are starting a HOA to assist in payment for farm fence painting, entrance maintenance, common area mowing, and enforcement issues. We have a significant majority of the property owners who are interested and willing to participate. Our initial discussions are to develop an agreement to make the HOA binding and mandatory, after the Owner executes a contract and files with the County Clerk.

I am looking for a good example of a contract for property owners to execute and also comments from those concerning mandatory HOA or voluntary HOA. Not all will participate, but, over several years with a mandatory HOA, we believe most properties will ultimately agree to participate and lock in all for the future.

Joe,

It definitely would be so much easier if the developer was willing to form the mandatory HOA. That way anyone buying a lot would know the HOA was in place and there would be no questions. One problem with a voluntary HOA is that not everyone will want to join so the expense of all of the maint. is left up to those who are willing to join. I would suggest contacting an attorney to find out if a 100% approval of homeowners would be required to form a mandatory HOA. I believe there was a ruling in VA stating this; however, different states have different laws. I know there have been several cases here in AZ where a voluntary assn was turned into a mandatory assn w/o a 100% vote of the members. I think at least one of these cases was being contested but I don't know what the outcome was.

Once you have the approval of the required number of homeowners you need to form a committee to draft the gov. docs. Check with the State Corporation Commission (or whatever agency handles incorporation) to find out what the requirements are. Generally speaking you will have to draft Articles of Incorporation to incorporate as a nonprofit corp and also draft a set of bylaws. You may need to amend the declaration to include provisions on assessments and architectural control, to name a few. Actually, you may want to consult with an attorney just to make certain nothing is left out.

Please contact an attorney who specializes in HOA law. We are involved in a law suit because our BOD tried to convert our subdivision into a mandatory POA with a majority vote changing the CCR's. The judge in the lower court told the BOD that they couldn't convert without a 100% vote of the property owners. We are headed to the circuit court later this month..because they appealed. The NC Supreme Court has ruled it takes a 100% vote. The VA Supreme Court has ruled that certain documents must be filed in the land use office for an association to be a mandatory association. Those docs are the deeds which would mention the the HOA/POA and giving them the expressed responsibility to collect dues and maintain common property. Also, a doc where the developer specifically turns over the responsibility to the HOA/POA. I'm not a lawyer. If an attorney who specialized in HOA/POA law was consulted consulted 2 years ago..a great deal of money, and time would have been put to much better use.
Mary N

Kirk is 100% right and that is exactly what happened to us. The developer never registered CCR's on the first ~34 homes he sold but did on the remainder ~80. That is why we and many others now live in a subdivision surrounded by HOA homes but we aren't bound by the same rules. Makes for interesting living.

Back to the OP though, perhaps you can clarify what appear to be conflicting statements,

"Our restrictions are basic and acceptable to all."

"The problem we are facing is future maintenance issues and of course, a few that do not follow guidelines."

If rules are acceptable to me I would be following them so how is it that they are acceptable to ALL, yet a few do not follow them?

Mary,

I agree with what you are saying. But a mandatory HOA is by its very nature an additional burden to the land. And they are seeking to add this burden after the sale of the land. That goes against the very grain of a contact for sale. And while some states have allowed for this type of action to take place, I suspect many others would not allow this to take place and hold that to increase the burden would require the acceptance of said burden by every land owner. The removal of a burden is a much easier bar (though a high one all the same).

While I understand the concept of fairness in that everyone who benefits should pay for maintenance, you also need to look at why some people chose to buy there. There are people who are looking for new homes that do not have a mandatory HOA. And then to push this on them after the sale is underhanded.

Even if I would otherwise join an HOA, I would contribute to a fund to prevent the formation of a mandatory HOA covering any lot I own without one currently.

Please note that nothing would keep the voluntary HOA from enforcing covenants. If it took a single owner to court and prevailed then it would become well known that they mean business.

Part of the issue is that many HOAs (as with many other organizations) is feature creep. Today they simply want to maintain a fence and enforce obvious violations of the covenants. Tomorrow they want to approve projects before they start. And down the road they want to create rules that were not anywhere close to covered in the original covenants.

GeorgeW, the ccr's here have a clause that says the CCR's can be enforced by the HOA OR any homeowner...but I'm not sure how that would actually work.

Mary, The contradiction or potential conflict I see in the OP was IF the rules are acceptable to ALL then you'd think they would be followed by ALL. IF some aren't following the "guidelines" that makes me think they are NOT acceptable to ALL.

If everyone was happy with a situation it would be easier to get agreement for a mandatory HOA.

George,

Perhaps the venue is superior court rather than small claims court. However, the point I was making is that when there are CCRs governing the property, but no HOA to enforce them, each individual property owner has the right to enforce them by bringing a court action against the violator. In fact, that is the only way to enforce the CCRs when there is no HOA.

As a note, there is nothing to prevent a voluntary HOA from taking enforcement action against violations of the covenants.

When I was a teen my parents owned property with CC&Rs and no HOA. But shortly after I an HOA was formed because of an attempt to violate the covenants. In this case all the lots were 10 acres lots. One wanted to put in a pig processing plant. This would have violated a no pigs clause and a no industry clause (being in a rural area it specifically name animal processing). As it was, things were stopped at zoning. The zoning board said they had nothing to do with covenants. But my dad pointed out that the vast majority of owners were there not wanting the zoning change as well.

After that, they formed a group to be ready for the next challenge. I don't know if it ever moved beyond a loose coalition. But it was in the formative stages when my dad sold to move.