💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

LoisW2 (California)
Posts: 6
Posted:
We want to dissolve our HOA. Advice, please.....and background and history etc. We have lawyers...just need to know requirements....yes, looked at governing docs and civil and corp. codes and I can't find much helpful. I gather biggest trick is to convince city you won't dump road maintenance on them. HELP...we are all going bankrupt because of the harassing lawsuits of one member demanding compliance with Davis Stirling....which has already happened. Long story, personal grudge, political insider.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Lois,
Personally, I don't have a clue on how YOU would dissolve YOUR association, as you have told us nothing about your association, including, where located, how many units, some history of your association, condo or HOA, etc, etc, etcd. If I knew this I would advice you hire competent legal help for starters, make your case and try and get the membership to agree with it, according to advice of legal council.
Is it possible you have hired the wrong lawyers? I serious doubt we are going to tell you the lawyer you hired is wrong, and then proceed to tell you what is the right legal advice.

I do appreciate what you are saying about your conflicts you seem to be having internally. These things can grow from a tiny little issue and end up all consuming. You mention a personal grudge, if it is an owner, your management needs to resolve that, if it your management with the personal grudge, you have more trouble than is on the surface. Has all this turmoil been aired in a Townhall type meeting? Consider that, if you all can put forth leadership that can control the meeting and make it productive, it can't end up with a bunch of folks yelling and when all is said and done, more is said than done. It also sounds as if you have some local zoning issues you have to work out. It may be imperative that you all get back on stable ground before you can even talk about dissolution. You would be much better equipped to handle dissolution from a position of strength than weakness.
TimB4 (Tennessee)
Posts: 21,062
Posted:
Lois,

Most governing documents give a procedure (or at least a requirement) of how to dissolve an Association. Ours is located in the Articles of Incorporation.

The biggest issue would be any common area. Your documents may provide guidance on that as well (mine does). Normally the common area has to be sold or given to non-members. Mine actually state that it has to be a "non-profit" corporation, trust or other organization engaged in activities substantially similar to those of the Association.

Your Associations lawyer may or may not be the best one to use as they may be more knowledgeable on property law rather than corporate law. Follow your lawyers advise and do everything by the book.

Tim

SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
I gather biggest trick is to convince city you won't dump road maintenance on them.

So.... if the city isn't going to accept legal responsibility for maintaining the road, then who will? The association. Get it? If you cant get the city to accept responsibility for the road, or etc., you cant dissolve your association.

So what you want to do first is: Spend all your time on getting the city to take over the road. After your association has no more common areas, dissolving it will be pretty easy.

Sorry, but you cant just throw up your hands and close the association down. Its not that simple. If you do, the state can appoint someone (at your cost) to manage the association properly and you will be forced to pay whatever that costs. Which could lead "you" into bankruptcy, but not the association. Association bankruptcy usually occurs with associations with large outstanding loans, not routine maintenance. And even then, the members are the ones who get screwed in the end.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Lois,

Check out the nonprofit corp act for more inclusive info on dissolution, that is if your HOA is inc. as a nonprofit. I doubt your docs will give the whole story on what needs to be done to dissolve the corp; they will only say what needs to be done to dissolve the HOA -- 2 different animals. However, since you have an attorney, why doesn't he know what the procedure it????
LoisW2 (California)
Posts: 6
Posted:
thanks for the great answers......to sum up, our assn. is way beyond reconciliation. We have restraining orders, settlement conferences, probably 10 lawyers on all the sides, multiple lawsuits, etc. etc. it's a long road estimated at $400,000 in legal fees. D&O insurer failed us, another story. Anyone know how to get them to step up?
One of the lawyers suggested dissolution but since a prior lawyer said our city had never signed off on one, we kind of let it go but now we see no other option. I have begun the process of contacting proper city planning people, possible legislative allies to help change the requirement of a 100% yes vote to dissolve, and so forth.
What I would really like to find is an association that actually accomplished dissolution to use as a model. A website I found mentioned in passing that 1900 assn.'s have dissolved. We are well aware of perils of receiverships, bankruptcies etc. What I would like to do is start a movement against what I see as an incestuous industry whose groups represent lawyers and managers, not homeowners. If someone can actually point me to a homeowner group whose support isn't mainly industry types, i will buy lunch.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Lois,
Not a pretty story coming from your side and I expect you are not alone in your concerns or inaccurate in some of your conclusions. Litigation is no fun for anyone about anything. And as always there seems to be a few brave souls that stand up to and try to pick the pieces up.

But one thing I want to mention and you above all people should and probably do recognize it; it the owners of the property would have from the get go,
stepped forward and watched the store, nearly all these problems could be avoided. The deck is stacked, I give you that, but the stacked deck does not trump concerned homeowners, willing to contribute.

I wish you all the best and sincerely hope no other association has to go through what you all are facing. Just a note to mention if you are looking for similar associations with this experience, I would make it state specific and find it hard to believe that some if not all this lawyers are not referencing state statute and case law in you state and will use this example of what they are presenting in court. Surely, they could point you directly on where to go. A trip to the Court house and a talk with the Clerk of the Courts Office might prove fruitful, or an online search of court records, that office should be able to offer some information or how to's.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here