HOA has disappeared!

A couple of years ago, we had an HOA. It got off its feet after the developer finally called the first meeting. After the election, two of the new board members revealed to the rest of the board that they hated HOAs and were going to undermine it. Long story short, and after serious harassment, they succeeded and all the board members that did anything quit. Since then the HOA has disappeared and so have our paved roads, which are not state roads or up to state specs. The asphalt is turning to gravel on the steep slopes. I had heard that the state can appoint a guardian to manage the development if we fail to do so. Is that true? How would we get reported?

Barb

Barbara,

If your HOA was incorporated, you can check its status and get some of the corporate filings at http://www.secretary.state.nc.us/corporations/CSearch.aspx.

Everett

you'all own your driveways

you'all own the roads

you'all are legally responsible for any injuries sustained due to the lack of maintenance

if your roads are not up to county/city code then you'all MUST, repeat MUST maintain them in a safe and minimally acceptable fashion ... convert them to gravel and perform semi-annual grading/compacting if necessary

oops .... then you would need some sort of administrative body to ensure that the costs are evenly distributed .... welcome to the HOA (whether it is incorporated or not)

a state appointed receiver will be VERY expensive

personally, IMO, i would 'bail out"

?perhaps you'all should sell out and move away if you can't perform your fiduciary duties?

BarbaraC5;

I am in the almost identical situation .....
Private roads, almost no reserves, 55+ community .....
The typical response to any suggestion of fiscal responsibility is:
"But I may be here tomorrow."!

Just as soon as I can break even (not counting closing and/or moving expenses I will be gone ................ unless I decide to take a 33% loss by reverse mortgaging so that I pull most of my equity ........... then I would be in a position to say:

"Who the heck cares?"

NEVER NEVER NEVER again would I purchase into any deed restrictive 'community' with any common elements.

There are public roads/streets, public pools, public tennis courts, public beaches ................. for which I am paying taxes IN ADDITION to my HOA dues.

Why? To live behind a fence with my head up my a*s? To hide from the world?
To avoid any sign or hint of the 'real' world?

Who knew that one could enter into a contract (land deed) relinquishing one's 'rights'?

CAVEAT EMPTOR

1> The HOA ALREADY has control
2> That would require (probably) 66% of the actual members to vote yes
3> That would require money ... to be paid from the $0.00 operating fund?
4> Again ......... money
5> What money?????

Perhaps a state appointed receiver! But the HO would need an attorney to bring the petition for appointment to a court of law .... again: money

MONEY was the only reason the builder/developer formed a HOA in the first place!
(so that he didn't have to build compliant infrastructure such as roads)

It was incorporated to shield him/her from personal liability (he/she has NONE)

The original BODs who stated they 'hated' HOAs and would destroy it MAY or MAY NOT have some personal responsibility/liability because of their WILFUL breach of their fiduciary duty to the corporation under NC state not-for-profit corporate law. (the fact that they were volunteers actually INCREASES their responsibility) But, again, one would need money to pursue this civil matter. Lots of Money

Again .... sell out, take the loss ... never repeat the mistake!

§ 55A‑8‑30. General standards for directors.

(a) A director shall discharge his duties as a director, including his duties as a member of a committee:

(1) In good faith;

(2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(3) In a manner the director reasonably believes to be in the best interests of the corporation.

(b) In discharging his duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(1) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

(2) Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within their professional or expert competence; or

(3) A committee of the board of which he is not a member if the director reasonably believes the committee merits confidence.

(c) A director is not entitled to the benefit of subsection (b) of this section if he has actual knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) of this section unwarranted.

(d) A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section.

(e) A director's personal liability for monetary damages for breach of a duty as a director may be limited or eliminated only to the extent provided in G.S. 55A‑8‑60 or permitted in G.S. 55A‑2‑02(b)(4), and a director may be entitled to indemnification against liability and expenses pursuant to Part 5 of Article 8 of this Chapter.

(f) A director shall not be deemed to be a trustee with respect to the corporation or with respect to any property held or administered by the corporation, including without limit, property that may be subject to restrictions imposed by the donor or transferor of such property. (1985 (Reg. Sess., 1986), c. 801, s. 29; 1993, c. 398, s. 1.)

Or if you’ve never purchased a home in an HOA or a home period, you could hire an attorney who has your interests at heart for a few dollars to explain just what you’re obligating yourself to by signing the purchase contact.

"Fool me once, shame on you; fool me twice, shame on me!"

CAVEAT EMPTOR

Are we not entertained?

John,
I am going to add my reply here, and expect it will be taken as toxic KaKa. So be it.
Certainly you all can not imagine that this choas you are faced with is the first time this has ever happened.

The only solution so far advanced was to move out and on. If you sell now, you still have to inform the buyer of the condition of your HOA.

I would suggest this. A couple of you get together and hold an open town hall meeting. It will be, or could be a disruptive meeting but, if you maintain control, you should come out of this meeting with a little better sense of where to go next.

Once a few of the members rise to the top of this confusion I would appoint a couple spokesmen for your group, establish a modest war chest, and get some neighborhood records together that demonstrates you all represent some voter voice. Contact any local representatives, go to states attorneys office and contact newspapers and TV or anything that will get your name up front. This kind of breakdown can be laid at the association doorstep for not paying attention, but it is also a reflection of the Political support in your area. I would really let your politicians know there is an injustice going on here. You need to find the right buttons to get some help. Keep knocking on the door and keep talking to your representatives and someone will open a door and be able to make things better.

Anyway, I would try this tactic, and I would take as much force (voters) I can muster to get this mess considered by your local pols. Granted, you are a member of a HOA in disarray, but you are also a tax paying citizen, let them know this.

Barbara, you or any other member of the HOA can appear in court and ask that a receiver be appointed to oversee your HOA. As others have pointed out this will be expensive as not only will you be paying for the repairs you (the HOA) will also be paying his salary. The best thing to do IMO is to get like minded neighbors together and resurrect the HOA. Unfortunately everyone let these two bozo’s destroy your neighborhood now you need to either fix it or live with it and the fix won’t be cheap.

The roads and everything else should have been built to code and the inspector should have signed off on it. This does not relieve the HOA of all responsibility; before the homeowners accepted the HOA (turnover) they should have hired an independent engineer to inspect everything and make sure it was up to snuff and even a properly constructed road will fail if not properly maintained. Laws vary from state to state but most often a developer has to put up a large bond with the zoning board to fix things if they’re not done correctly and they only get the money back when everyone involved says we’re happy with the completed project.

With the exception of condos and townhomes who need HOA’s and some every high end developments most builders would prefer not to have to fool with HOA’s. Most cities require a builder to put an HOA in place before they will allow them to build. This is because the tax revenue generated by homes is not really enough to pay for the services they require and if the politicians try to raise taxes to actually pay for things too many times they might get voted out. Now often the city will let a developer build on a smaller lot than would otherwise be allowed in order to maximize his profits on a piece of land in return for the HOA.

Just in case something should happen to 'total' your home and you were forced to move permanently. ... Food for thought.

If you do emergency assessments, you usually only need Board approval, not Member approval.

A receiver is one way to go but, like others said, it will be expensive. If you can take control of the Board (by whatever means) and install Board Members who will vote the way that you need them to vote, you can essentially act as your own receiver and ram through a bunch of unpopular but necessary repairs.

In most states and in most HOAs, the Board defines what an emergency is.

If it were me, I'd argue that the road is dangerous and somebody might be injured if they drove on it.

If they dared, let somebody sue the HOA in court and try to prove otherwise.