Dissolution of a Homeowners Association

Don, do you have a clue? Is there anything which must be maintained by the HOA? What are the liabilities to the homeowners if the HOA is dissolved? If you file a document dissolving the HOA could you personally be liable in the future? I suggest you contact an attorney before proceeding further.

Don,

How can you dissolve a HOA with only 75% of the owners. What about the 25% who do not want it dissolved? Selling off their common area? Will everyone get an equal share. Do you have that in writting? As Roger said, You had better get an Attorney because this much more complicated than an individual property sale.

Besides which why would you have the ballots?

As someone else indicated, some states have specific statutes dealing with the procedures involved in the dissolution of a not for profit organization which owns assets. In at least one state the process involves going to court where a judge evaluates then decides whether or not to allow the dissolution or if a trustee should be appointed to manage everything instead. In the case of an HOA appointment of a Trustee would probably not be good news for the individual owners. Trustees often are given money for their time. In the case of an HOA the money would probably come from raises in the assessments. The trustee usually has the authority to award or approve contracts over the objections of the members. A trustee is supposed to be ethical, but what do you want to bet the new lawn mowing contract would go to his son-in-law's new mowing company, and probably for twice what the old mowing company cost.

Check your state's code. If the special rules as described above for dissolving an HOA or similar special interest communities exist, then rethink this decision. You may be a lot better off simply keeping the HOA alive. Look also in your state's Corporation codes. There may be another set of procedures to be met in addition to everything else.

That being said your Articles of Incorporation and or your By-Laws and or your Covenants probably each talk about the procedures the founders intended to be followed. They may even have different procedures and it is best to meet all of them.

Usually a Dissolution proposal flows from the Board of Directors and out to the members for a vote at a special meeting. Trying to accomplish that with just a petition strikes me as an uphill fight. The petition would have to be presented at a meeting, then possibly put forward as a motion, the votes recorded, etc. As someone else stated, expect challenges.

There is also the matter of monies or bonds in the treasury, and or, where did it go, or how it should be divided, etc.? If your HOA is supposed to take in XXX thousand dollars per year, but there is only a few hundred bucks in the bank, someone is going to have some serious questions. Likewise if there is XX thousand dollars in the reserve fund, how should those assets be divided? Are there outstanding mortgages? Will your town or county accept ownership (and the responsibility for maintaining them) of streets and other common areas? What does your Town council say to this idea? Etc. We start to see why some states have the whole dissolution thing move to a court.