Legality of HOA?

The person who is "in-charge" went to a bank & told them we are a HOA and he gave them a name that he chose. the bank then gave him a Fed ID# and now he says it's all legal. I found out that you have to get a lawyer and have bylaws drawn up and be recognized by the HOA of America.

Now, he states in a letter that he contacted the NCSecretary of State and so we are legal.

Isnt every memeber of the community suppose to be given a copy of these bylaws, also, we never legally voted on anyone...that is ...put on paper!

can someone tell me the proper steps to become a legal HOA?

Anybody can form a corporation (or a non-profit) and name it almost anything he chooses. He can also get a Federal EIN (ID#) and a bank account. And, yes, he is a legal corporation (or non-profit) according to the Secretary of State. But he can't legally demand that others pay him fees.

An HOA can only obligate people in it if it is written into the deed for their home. People can voluntarily join or pay but, if they don't, he can't lien homes or force others to pay.

He's formed a corporation and, unless it is already written into the deed of your home, it is your choice to join/pay or not. (If it is already written into your deed, well, you may be in some trouble then.)

If he tries to get you to pay and you don't want to, just tell him, "No." If he tries to lien or sue you, fight it out in court.

Oops, ok, so you are part of the HOA.

It is hard to say what is allowed. He might have some legal basis or he might not: it will depend on his and your paperwork and corporate laws.

Since you are in no position to pay either fees or for a lawsuit, I'd suggest that you talk to the guy. If you can't talk to the guy, you may just have to accept and react to whatever comes. If he (the HOA) fines you or liens your house or sues you, you might use the HOA meetings or a group of fellow homeowners or the courts or some combination of them to come to a resolution when the issues come up.

Although this stuff about meeting notices and incorporation dates might be unfair, you said that you don't have the money to fight them so it doesn't matter.

Candice, first off don’t ignore this or hope that it will go away, if you don’t pay, the HOA can lien or even foreclose on your home. I’m guessing but it sounds like your HOA may still be under Declarant control, since you keep referring to the mysterious person “in charge”. You need to contact either the BOD or this person and request a copy of the CC&R's (Covenants, Conditions & Restrictions) they also may be available online with your county recorders office, put the name of the HOA into the search feature. What he or the BOD can or cannot do are contained in these documents so you need to get them and READ them.

I dont intend to ignore it at all, i'm not that type of person. As long as i pay them something i have no worries.

This whole place is a debacal. 1st, the road is horrible..culverts not running water the right way, because they're clogged, has deteriorated the road. We had one meeting where we all agreed for a reputable company to fix it. Apparently there was an "unannounced meeting" and the people that showed up chose the 'cheaper alternative'...which wound up to be a crapy job and we're back to square one. My portion paid for that. This was last year...about January.

I then took it upon myself to buy cold patch and fix the holes. Due to how the people drive around these mountain roads, the hill just got worse. I then fixed, on my own, the clogged culverts and moved dirt around to direct the water. It has helped and slowed the process.

Then there's the issue of water. The guy in charge..i'll call John, used up what money was left b/c his well, which 7 others are on, had the electricity shut off by the sub. builder (he has 1 lot left) due to a high bill. So John used the money to get things right $1500. John was mad at me b/c I didnt put money in to help with the well. Per my deed, I am not on his well...my well is on a different lot. Me and my neighbor are the only ones on it! But he's not hearing that.

As some of you have mentioned a lawyer, I really dont like going in that direction. I will continue going to the meetings and paying my dues...but I dont want to put my money in to help pay for something else besides the road. There is a part of my deed that states that...only the road and MY well. John is very difficult to talk to b/c he only see's it his way, which is very difficult for me.

Candace,

Who is this guy you've named "John"? Is he the builder or a property owner? If the latter, who put him in charge? Were elections held or did the builder appoint him to the board of directors. Actually there should be more than one person on the board. Of course that would be spelled out in the bylaws which you say don't exist. If the builder is still paying for the wells I'm thinking he is still in charge of the HOA. It may be wise to have a meeting with him and get all this ironed out. He should have written up the Articles of Incorporation and incorporated the HOA as a nonprofit corp; and had the CCRs and bylaws written. All those documents should have been provided to each property owner at the time they purchased their homes/lots. In AZ we have state laws outlining these requirements; guess your state doesn't.

Assessments should have been levied from the beginning -- from the day you took title to your home. That's the way HOAs are set up. The reason for this is so the expenses of the HOA can be paid -- utilities, maint, insurance, office expenses, taxes, etc.

You said your deed says you are only resp. for the road and your well. Actually the CCRs would state what the assessments are to be used for and if all members are resp. for all wells or only their own well. I would find it strange if that info is contained in your deed. The deed usually only states that the property is subjected to deed restrictions. All those restrictions are contained in the CCRs which is why it's important to obtain a copy of that document.

Another poster mentioned the importance of paying your assessments. If the BOD is requiring the $900 to be paid immediately you will have to make arrangements to comply. Normally they have the authority to determine when assessments are to be paid, i.e., monthly, quarterly or yearly. If you don't pay on time a lien can be placed on your home and eventually foreclosed. If you are unable to pay the $900 in one lump sum (and that is what is being required by the BOD), I suggest you meet with them to arrange a payment plan. Let them know you are willing to pay but just cannot pay the full amount at one time. Perhaps the board can be convinced to set the assessments to be paid monthly.

Speaking of the assessment, you said it is $300/yr and that's why everyone is being charged $900. However, the assessments don't start until you purchase your home. You cannot be charged for a period of time when you were not a property owner. I know every property owner did not buy their home in the same month of the same year, therefore every property owner would not owe the same amount. This is something I think should be carefully checked out. Didn't you say you've only lived there 2 years? That would mean you should only be charged $600.

well for starters, i checked online NCsec of state are we are now recognized. But i also worry because we have not voted on bylaws or anything and only "johns" name appears on the paperwork.

to give you a scope of where i live and the community. I live in a small but growing town, in a subdivsion situated on a hilly area. When I bought this house there was no HOA at all. the builder doesnt want anything to do with the HOA (although it states in the CCR's that he is automatically included! hhaha) so a small group of us got together and started working together to get things planned out, as far as fixing the culverts & ditches. They were washed in or out and water was severly deteriorating the road! But after we got some money together, John decided to go the cheaper route and hired someone else...who did a crappy job! AND john didnt even hire him to work on the other road...when the 1st guy would have done it all!!! alot of us were left with a bad taste in our mouths. And since this letter of demanding $900, 4 of the neighbors have called, not understanding why so much when we have put money in already!!! for some reason he's charging since 2008..which doesnt make sense b/c we all put in for roads already! oh and he is charging a $300 start up fee (meaning start of the association) Can he do that?

This all a really big mess!!!! So thanks for bearing with me.

Here is a link to my deed:

http://maconncrod.bisonline.com/ImageDisplay.php?dbp=U-31/666

Candice,

Please tell us who "John" is. Is he a member of the board of directors? Was he elected by the members. The board should have more than one member and no one member should be acting along. More info on this, please!!!

BTW, the link to your deed does not work.

Candice a person can’t just show up at a bank and claim to be an HOA and chose a name. He would need at minimum a Certificate of Incorporation (or Formation) issued by the Secretary of State, Federal EIN Number, Corporate Resolution that specifically designates the individual(s) authorized to act on behalf of the corporation and Photo Identification (typically a driver's license or passport).

Typically a Developer will buy a parcel of land that he wants to develop. Usually the city or county zoning board will then require him to add deed restrictions (see below) and form an HOA to administer them. The Developer adds the deed restrictions and forms a corporation (the HOA) with the Secretary of State’s office; he then files the Covenants prepared by his attorney (too often using boilerplate documents) and By Laws which are filed with the county. At a specified time in the Covenants usually when 75% of the lots are sold or after X number of years the Declarant (developer) turns the HOA over to the H/O’s to run and he moves on.

Deed Restrictions
Deed restrictions such as restrictive covenants are often put in place to maintain a desired look in a neighborhood. To that end, deed restrictions may prevent owners from building more than a pre-established number of homes on one lot. Deed restrictions can also specify what materials or style a building may or may not be constructed of, and how close to the street it can be. Deed restrictions can even specify the minimum size that a house on the lot may be.

Deed Restrictions govern more than just the construction of buildings on a property. Restrictive covenants in a residential neighborhood dictate what types of materials fences may be made out of, or establish limits regarding pets, such as how many pets can be kept in a home or the conditions they must be kept in. Covenants often protect the aesthetic appearance of the neighborhood by providing a list of acceptable paint colors for the exterior of the house, regulating tree-cutting and other landscaping issues, or prohibiting the use of the lot for storage of campers, trailers, or cars that don’t run. Covenants might also establish road maintenance or amenities fees

Homeowner Associations are governed by a chain of governing documents and laws.

The Articles of Incorporation filed with the Secretary of State provide the legal basis of the association in the form of an Incorporated Non-Profit Corporation.

The recorded map or 'plat' defines each owner's title to property including the association's title to common areas.

The CCR's (Covenants, Conditions, and Restrictions) are publicly recorded deed restrictions.

The By-Laws are the rules for management and administration.

Resolutions are additional rules and regulations that the association may adopt.

Federal Laws also apply. Some but not all include the: The Fair Housing Act, Internal Revenue Codes, the American Disabilities Act.

State Laws affecting homeowner associations are primarily contained in the Corporations Code and any Code that regulates HOA’s (not every state has) Additional state laws may apply such as ones that regulate storm water runoff, coastal development, elevator inspections for condos, and pool operations etc.

Local Ordinances, while not specific to homeowner associations, apply to building codes, animal control, abandoned cars, water restrictions, etc.

Additional legal regulations can exist in the form of case law; standards set by professional organizations such as accountants, engineers, architects, home inspectors, and real estate brokers; as well as lender requirements.

BTW There is no such thing as the HOA of America.

Glen is correct in theory but, in practice, banks aren't all that picky.

They'll only do a superficial check to the existence of the corporation.

In my case, the bank person used the Internet to check the corporate status with the state.

The guy in front of me didn't get an account: his corporation didn't pay its fees and owed a bunch of back taxes!

I think that they check for two reasons: maybe the state asks them to and to guard against terrorism (front companies, etc).