Convert from Condominium to Fee Simple in SC

Started by TinaB2 • 5 replies • 3522 views

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TinaB2 (South Carolina)
Posts: 1

Posted:

I have a question about converting our community of free standing homes from condominium to fee simple. How do we do it? What "self help" resources can we utilize? What governmental agencies can we contact to aquire the law of such conversion? Can it be done? We have little to no money to hire an attorney.
We have an insurance assessment of 2,000.00! If we own the inside and outside, we believe the insurance will be lower and so will our fees. We acknowledge we will be responsible for repairs/insurance in/out and have an HOA fee for the comman areas.
We have so much debt due to 30% of our owners not paying/not being able to pay their regime fees. Our Board and IMC Resort Mangement have allowed the delinquencies to get so high, due to no proactive collection plan, that the banks will not even consider a loan, no repairs are being done and they are requiring those who are paying, to pay the shortfall of other's insurance costs by way of assessment. We can only sell to cash buyers for 1/4 what we paid! Their idea of "collections" is foreclosure!
Those of us who are paying are footing the bills for those who do not pay. Is that legal? What can be done? Can we as a "condominium" file hardship for taxes? Can we sue the management company/Board due to mismanagement of funds, hardship caused by poor judgement and a "nothing can be done attitude"?
We have been told over and over "You can't"! Fines are assessed to some but not to others, enforcement of Covenants are imposed on some but not on others and our neighborhood is beginning to look like the ghetto!
We have a Board that one works for the management company, one's husband works for the management company, one is a vendor and not sure of (or if there is) a "connection" of the other two!
Any suggestions as to how to bring our community back to the "Plum" it use to be before our Board/IMC Management allowed it to be a pothole?...oh I forgot to mentiion our roads are full of POTHOLES! Not funny!

DennisT (Ohio)
Posts: 109

Posted:

Seems like once a month or so someone asks about dissolving their HOA. The basic answer is to check your documents. They usually provide a mechanism for dissolving the association which requires a vote. There's two huge hurtles you'll have to overcome:

1. In most cases the prescribed voting percentage for dissolution is very high. Expect to see at least 90% or possibly even unanimous consent.
2. Something has to happen to the common areas. You mentioned that your roads are full of potholes which tells me that the association owns and has responsibility for maintaining at least one road. If the association is dissolved you'll have to get the local government unit (city, township, etc) agree to take the road as a public street. Good luck with that, especially in today's economy!

So I think people telling you that "you can't" are probably just being practical. In theory it is possible but in reality it's not.

About your only option is to gather up your like-minded homeowners and vote the board out and establish one that is willing to get things back on track. Suing the board won't do much because you're really just suing yourselves as any legal costs borne by the association defending itself will be passed back to all the owners.

It's going to be neither quick nor cheap but I'd try getting a responsive board elected and work with them to clean things up.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

The largest reason why there is an association is to share common property. Soooo... if you want to disolve, you need to get rid of the common property. This is not as easy as you may think. Especially if your dealing with roads, or clubhouses, etc.

Start from there........ what would you do with the common areas?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Tina,

First of all if your community is made up of "free standing" homes then, IMO, it shouldn't be designated as a condo, but rather a planned community or perhaps in your state it would be called an HOA. Normally free standing homes means the h/o owns the property upon which his home stands and has no interest in the common areas. The only way to change the designation of your community is to amend the CCRs.

Since you are designated a condo, I'm thinking your roads are probably private. If that is the case the BOD may want to approach the city/co and ask if they will take ownership of the roads. Explain that the HOA is in a financial crunch and doesn't have the funds required to properly maintain them. Unless it's a gated community, the majority of (if not all) planned communities (HOAs) have public streets.

Regarding your delinquencies, the BOD should have a collection policy in place and stick to it. Late fees and fines should be assigned equally to all members who are delinquent. Resorting to foreclosure to collect delinquencies is not a good idea.

I don't know about suing the board, but you certainly can recall them. Get all your like-minded friends and neighbors together and first have a litle talk with the board members. Let them know that you want the delinquent members to be fined and if they don't pay up within 2-3 months then other more serious actions can be taken, such as filing liens and/or foreclosing. If they don't agree then let them know they may be facing a recall. If that doesn't work, then proceed with a recall.

CarolF (Florida)
Posts: 435

Posted:

Mary - I'm in FL, in a small HOA within a larger HOA. I pay assessments to both. I own my lot and home within the smaller HOA, and we have common property which consists of a swimming pool area,landscaped entrance and a few smaller common areas of grass. The larger HOA owns the roads within our section, as well as the main roads in the development, and other common areas that all members of the larger HOA pay to maintain. In the "condominium areas" within the larger HOA the roads are owned by the Condo Associations.
It is estimated that 1/3 of all Florida residents live within some form of HOA or Condo arrangement.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Tina,
First, what swupport do you have to take over managing the association? You must know how strong you are and you must use your power. If you can represent the association, you have the power, but you need to have done all this along time ago. But the process is the same. One thing to look into is get some facts together, records and data and statictics that are predictors of where your association is headed..........bankrupt....maybe. Get this together, and you and a couple of your mates start beating on the local politicians doors and ask for help. Get them to champion your fight to save the community. I also live in SC and I have posted on this site long enough to know, never say things are not right because you have never heard of them. The Horizontal Property Act of SC is your governing document, plus you are a non profit, and you could be partially under a city or county or state zoning laws. I wuld be surprized if your association was not initially designated as a membership that pays prorated assessments. Just from the sounds of things, your best bet is to recall your Board, install a new board and try to get the train on the track. It matters not who is related to who, the results are poor at best and you are detined for worse times than what you are going through now, given the direction you are headed. You need to get control back in the hands of you association and you need to rebuild a capable association. I doubt you will receive any state direction or help, so try for political influence and hard work, time and patience.

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