Changing Mandatory to Voluntary HOA

Started by DanW1 • 11 replies • 1489 views

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DanW1 (Colorado)
Posts: 5

Posted:

Hi there, could someone familiar with Colorado address the following: We want to make our HOA voluntary, current covenants say "These covenants and restrictions are to run with the land.....unless an instrument signed by a majority of the then owners of the tracts has been recorded, changing said covenants in whole or part." Question 1: Getting one document signed by 400 owners is not possible, but 400 individual forms is. How do we get this done?
Question 2: Is there a form we can use to make this easier? thanks Dan

RenaeW1 (Florida)
Posts: 42

Posted:

So you are saying you are changing your HOA to voluntary and some will pay dues and some will not? Some will follow the covenants and some will not? What would be the benefit of voluntarily joining the HOA knowing that your next door neighbor may not join and may put an automotive business/garage in their back yard, or a mobile home. Why should some keep up the common areas with their dues and others get to use the common areas without paying? I'm not seeing the benefits to anyone.

BrianB (California)
Posts: 2,820

Posted:

i was wondering the same thing...

I can see why a PERSON would want it done (for many of the reasons listed above), i can't see why a population would want it. What will happen to all your common areas, etc.? and what did you mean you can't get 400 owners, but you can get 400 forms? you mean ballots? Proxies?

DanW1 (Colorado)
Posts: 5

Posted:

I mean, we can get 400 individual documents signed but cannot carry one single form to everyone. This HOA has a history of corruption and the common lots are not being taken care of at all, so this can be easily resolved by selling those common areas, the only way you would know we have an HOA is by the fact that we pay dues, you would never know it by looking at the subdivision, some HOAs are good, some are bad, this one is not good.

BrianB (California)
Posts: 2,820

Posted:

before you disband, i would make sure you can sell those common areas. Sometimes, they are deed restricted for certain uses in perpetuity, or zoned for certain uses forever. Make sure they actually have value (or instance, our common areas were deed restricted to remain water retention basins forever... nothing could be done to them except use to retain storm water).

SusanW1 (Michigan)
Posts: 5,202

Posted:

Dan - your Articles of Incorpoation or CCRs or bylaws should state the "purpose" of the existance of your HOA. Be sure that you can meet those obligations using a voluntary base of residents.

I am certain that is it easier to go from voluntery to mandatory, but the other way around could be a battle if the HOA has assets and/or responsibilities that it needs to meet.

Are the common areas even saleable?
Are they buildable?
Does anyone even want them?
How will they be cared for, especially in this economy, if no one wants to buy them?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dan,

The article you've posted pertains to amending the declaration. Since you want to dissolve the HOA, IMO, you should be looking at the article to terminate. How does that article read?

Termination of the HOA leads me to wonder if that applies to the HOA corporation or to the covenants that run with the land -- or to both. If it means the covenants that run with the land (the CCRs) are also terminated does that mean all the property owners' deeds must be changed to reflect this change?

I'd appreciate everyone's view on this.

KirkW1 (Texas)
Posts: 1,665

Posted:

To directly answer your question, you can do this with 400 documents.

As to what is invoked, I would look in several places. You likely will need to amend the covenant making membership mandatory. If you wish to terminate the old corporation in favor of anew one, you will need to look at the "Articles of Incorporation." If you intend to revamp the corporation, then you may need to amend the bylaws and the articles of incorporation. At any rate I would consult an attorney practicing in formation of corporations.

Once you have figured out all the amendments print up a document With all the proposed changes. Your attorney can help you with this as well.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Maybe just a deed addendum filed at the county . . .?

DanW1 (Colorado)
Posts: 5

Posted:

Hi all, I am going to the County Clerks office tomorrow to look at the recorded Deeds of outlots etc. I'll report my findings and will welcome advise. thanks

RobertZ1 (Michigan)
Posts: 66

Posted:

Mandatory Assocation with dues being paid, by over 400 homes/lots and care for commons not being done. What is wrong with this picture!?! Where are the Board, and why are the members not asking for accountability?

Yes, I know these are not the question asked, but it does beg the questions be asked. My HOA is voluntary with mandatory requirements by our Charter, you want responsibility, without financial accountability, try that.

If you become voluntary, does that change the whole of the HOA to one that can be managed by a few? What happens to the Charter Doc's, the whole of the Associations Governence?

Anyone with answers, please, am I asking the wrong questions?

RichardW4 (Florida)
Posts: 5

Posted:

I was a manager assigned to an HOA that was scheduled to end the association. It took over 24 months. Required an attorney, the vote of the members, a vote of all mortgage holders, and working with the county to take over the common areas. Since the streets were in the county the only thing that they had to transfer to the county was small green belts. Here is the kicker. The legal costs exceeded $25,000. In my opinion, it was not worth the cost.

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