No HOA formed, common areas now owned by bank

Orange County, Texas

According to county court documents the Successor Developer aquired all previously unsold and unconveyed lots within our subdivision from the Original Developer, in an amendment. Currently the Successor Developer has lost this to the bank. In the original 'Dedications and Restrictions' it mentions that the HOA is responsible for the common areas, however in the amendment nothing was mentioned about these said areas. At the end of the only amendment its says "Except as amended herein, the remaining provisions of the original Dedication and Restrictions shall remain in full force and effect, as therein provided."

There was never an HOA formed. There is another document "Maintenance Affidvit" that mentions the Successor Developer (a man and his son) are the sole members of the Architectural Control Committee, and "the duties of which are assigned to the Architectural Control Committee until the formation of the Homeowners Association". My assumtion is that until the HOA is formed, the Successor Developer is repsonsible for the common areas, however, now the bank owns it.

Here's the catch...

Hurricane Ike knocked down a good stretch of a brick fence/wall that is around the subdivision. So since the HOA was required to carry insurance on the common area, would the Successor Developer also have to, since the Affidavit said he was assigned the duties? Secondly, now that the bank owns the properties, would they now be responsible for carrying insurance on the common areas?

We saw someone many months ago measuring the area, and they said they were going to give a bid, but didn't say who to. Last summer there was someone mowing the grass in the common area and he said the bank hired him.

We have contacted the city to file a complaint, and they are trying to find out if the brick wall is required to be erect. I would love to know where to find that information.

NORMALLY in a case like this, when the bank owns a common area, are they required to carry insurance or do they have any responsibility to cleaning up the debris or erecting the wall like the HOA/Architectural Control Committee would have to do? Or for that fact, if a kid gets hurt in or around the down brick wall, who is responsible?

I'm not sure if the rules are different when a bank takes ownership. Lastly, the mess that Ike caused to the wall is hurting the value of our home, and is just unsightly.

Any thoughts would be fantastic!

I have a feeling there is no "your" - that would imply that there is an organized group.

Try to set up an appointment with the bank and find one person who can tell you what the bank's official stand is on taking care of the property. I would bet it is nothing. They are the middle man right now. Just a paper holder

Get in line. (you should see bank owned properties in Michigan. most properties look woefully neglected, especially in landscape and maintenance areas) They tend not to take care of properties unless they are really valuable.

Organize a group of concerned owners and get an attorney. You may be able to petition the court to establish an HOA with the purpose of protecting property values.

Neely,

If a bank owns the common areas then they are resp for everything associated with those common areas: i.e., maintenance, insurance, liability. Just as you are responsibile for maintaining the property you own, etc.

I would contact the bank to find out what their plans are with regard to rebuilding the wall.

Since an HOA was never formed, and a bank now owns the common areas, I would think you don't have to worry about paying assessments. However, you are still obligated to abide by the restrictions as outlined in your covenants. When there is no HOA to enforce the covenants, each property owner has the right to enforce in a court of law -- usually small claims or justice court. If you take a look at the deed to your property it should state: "subject to deed restrictions" or something to that effect. That means that the deed restrictions (covenants) "run with the land" and are in force for as long as you own the property. These deed restrictions will pass on to your successor heirs or to anyone you should sell the property to. This is what "covenants running with the land" means.

MaryA1 -
That's fantastic to hear - and I hope that's how it works!

I'll contact the bank and see what they have to say. I'm going to record the conversation too, just to be safe.

We, along with everyone else, indeed abide by the restrictions. We've even bought attachments to our lawn equipment to keep some of the common areas under control - it was worth it to us for it to look uniform.

Neely,

You and your neighbors should keep in mind the fact that those "common areaa" are private property and each time you step on them to mow the lawn you are trespassing. Also, how can you ever expect the bank to do their job by maintaining these areas if you and your neighbors are doing it for them -- free of charge. I know you all are well-meaning, but I just do not think it's a good idea. Even if there was an HOA, the members would not have the authority to just take over the maint of a common area even if the BOD was not doing it.

Seriously think about making 2 phone calls; one to the bank and the other to city/co code compliance.

Neely,

Whether or not they are "required" to have liability ins on the common areas, they are the owners and the liability is on them. If something happens and they want to pay a liability claim out-of-pocket instead of having insurance, that's their problem. Whether or not they are covered with liability ins would be the least of my worries. If you found they are not, what could you really do about it? IMO, you should just be concerned with getting them to maintain the area and rebuild the damaged wall. When I suggested you contact city/co code compliance, I was thinking about maint of the common areas not for rebuilding the wall.

Neely,

Yes, if the bank is, indeed, the owner of record, then they are resp. for all maint on the property. My HOA has had several situations like this and when we have informed the bank that we will do the work and bill them they acquiesed and did it themselves.

When I suggested contacting the city I was thinking they would issue a violation notice. Here where I live, when a property owner violates a code ordinance the city will come out, inspect and issue a violation notice giving the prop owner a certain length of time to comply. I was not suggesting the city come out and cut the grass.

MaryA1-

Oh I see, I see I see. I think the city will issue a violation notice, when we finally get to that point, at the VERY least, for the bank to get the grass mowed. The bad thing is, is that all the brick from the wall is in the grass, so they only mow where the bricks aren't...obviously. But I need to think "Baby steps, baby steps."

Another great idea about telling the bank we'll do it and bill them - that might put a fire under their a**!

I did contact the fencing company about the bid. The lady said she knew exactly what I was talking about, but her husband wasn't interested in it, so they didn't give a bid, therefor do not have any record of it. Ugh. I'd just like to get who requested the bid so I can contact them - since it's the same. I wonder what the department at the bank handles this sort of stuff? For example, the city department is Code Enforcement, or a variation of...any ideas what department of a bank would be called?

We have several homes in our neighborhood that have been abandoned and are in various stages of foreclosure/bankruptcy/probate. Most of them don't have any power, so the timers for the irrigation system are non-functional.

Our CC&Rs explicitly allow us to maintain the landscaping if the property owner fails to, so a couple of weeks ago we sent a certified notice to all of the owners of record (including the banks) that we intend to install battery-operated timers on the irrigation valves and have somebody start mowing the yards with all costs to be assessed to the property.

Amazingly over the last few days all the bank-owned properties have had crews out to take care of the landscaping. Guess our message was received.

Newly, If you have not done an on line search on the Court House Court Records and looked for your development name, the name of the first developer, the name of his company and likewise the name of the second developer and company names, and connect the bank to any of these people including your association name.

From what I can see this all has to be included not only in the property records of the country records office, and planning county office, but also the records of any court proceeding and from what has happened there is a paper trail a mile wide somewhere. In the situation the owners of your development are in, they need information. Apparently, all these various proceedings are not being circulated.

Newly,
I have no idea what kind of area you live in, but if it is typical Americana, someone in your town knows the answers or how to get I find courts records to be confusing and property records also, however the people that work in these offices are generally helpful. Usually when you can't find everything you know is somewhere, it is because we don't have the day to day knowledge of how this stuff is handled. Our planning office is a wealth of knowledge because they have the master plans and any change in ownership usually goes through them simple because there is always changes that have to be made when large properties change hands.
But keep digging and maybe look locally for a company that can provide a complete property search and court records search. I bet it is all there, when they go to court to make these property changes, you can bet the lawyers have done just what you want to do.

Newly,
Your: "
On top of that there was never an association formed."
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Have you checked your state business filings. The original developer would have to file a Business License (I assume). There seem to be huge gaps in the continuity of your records, I am sure you know this, but on what authority is your association operating under.

I don't know what else you can do except to keep digging and don't put your neck out.

It would appear you are a fair distance from where you can start shooting at someone.