HOA resurrection

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mhalley
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HOA resurrection

Post by mhalley »

We moved into our current home about 20 years ago. At that time, there had been a homeowners associaton in the past, but it had become inactive. Last year there were some issues that came up with a potential new development that the neighborhood felt would be detrimental to our community, so the association was revived and the development was stopped. No dues have been collected in the last 20 years. We did give them some money last year to help stop the development. The hoa has now decided that they want to become active again, and sent us a bill for a "mandatory" hoa fee.
My concern is that there is no documentation about the hoa. Is this the same agreement that was in effect 20 years ago?I think we may have received some documentation about it 20 years ago, but since the organization has been inactive for so long it has been discarded.
So, should I pay this new fee? Should I ask for a copy of the hoa agreement? What would you do in this situation?
Mike
drawpoker
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Re: Hoa resurrection

Post by drawpoker »

I recently went thru similar nightmare. Had to pay a lawyer to research the whole thing. :(

Basically, you are not at the mercy of someone telling you this is how it is. Anything relating to HOA, covenants, deed restrictions, etc etc Has to be recorded in the courthouse. In order for it to be legally binding.

So, before you shell out any money, think you (or attorney) should be doing some research in the local land records at the courthouse to see how this HOA can suddenly re-appear with demands for $ after so many years of dormancy.
WhyNotUs
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Re: Hoa resurrection

Post by WhyNotUs »

HOA regulation is a state matter. Look up your state's laws regarding HOAs. You are likely to find a government agency that regulates HOAs. Call them and ask your questions.
In our state, a 20 year old set of covenants would not hold up due to changes in the requirements for such and the reformed HOA would need to have new covenants approved by owners. YMMV.
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denovo
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Re: Hoa resurrection

Post by denovo »

For the love of all that is holy, put down the resurrection of the HOA and make sure it doesn't happen. Jam them up in technicalities and bury it. HOA's attract busy-bodies with nothing better to do than stick their noses in other people's businesses. The quality of life will go down for you.
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brian2013
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Re: Hoa resurrection

Post by brian2013 »

Real estate attorney here. At least in my two states of practice (NC and SC), and most likely yours as well, before anyone could assess HOA dues on you, there would have to be restrictive covenants in YOUR chain of title for your property specifically authorizing it. In my states at least, it is really not a matter of state law - there is no state law that authorizes HOAs to assess dues - it has to be in your chain of title. Before you pay a lawyer, I would start with the attorney or title company who closed on the purchase of your property. Just call them and ask them if the title search turned up restrictive covenants on your property, and if so can you get a copy. Then you, along with your attorney/title company if you think you need assistance, would need to review the covenants to see if they specifically authorize levy/collection/assessment of HOA dues. If so, then if i were you i would get active in the neighborhood/HOA - that way you can have a say in whether it gets reactivated, or at least in whether or how much the dues will be.

(If you can't locate or reach your attorney/title company, you could simply pay a real estate attorney to do a LIMITED title search for you, just to find out if there are restrictive covenants authorizing dues assessments on your property. In my two states, i might charge you in the range of $200 for such a request).
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Re: Hoa resurrection

Post by brian2013 »

Edit - i might charge you more like $350. :wink:
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Kosmo
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Re: Hoa resurrection

Post by Kosmo »

denovo wrote:For the love of all that is holy, put down the resurrection of the HOA and make sure it doesn't happen. Jam them up in technicalities and bury it. HOA's attract busy-bodies with nothing better to do than stick their noses in other people's businesses. The quality of life will go down for you.
They are far more trouble than usefulness. Keep the HOA dead. I used to not mind HOAs until recently some people got involved who are just as denovo describes.
drawpoker
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Re: Hoa resurrection

Post by drawpoker »

There are all kinds of HOA's. You can't really condemn them all. In our nearby townhouse (rowhouses) subdivisions they have to have a HOA board in place to collect the monthly assessments for lawn mowing, snow shoveling, etc. They also have to have board directors to send out letters to enforce the rules on illegal (short-term) rentals, signage, storage of trailers, boats, RV's and other banned items, etc.

I do agree with others that say far too many are populated with busybodies; I know of one neighbor who was told she had to take down a bird feeder because the tree she had hung it on was only half on her lot ground, other half on the common (community) ground. :shock:
Then there are the ones that are more social in nature, there is no regular maintenance and upkeep that must be paid for. It sounds like what the OP is describing is the latter, but he needs to be more specific.

In any event, the creation of such a HOA when the community was built should be spelled out as part of the deed restrictions when the county/city first approved the plat. In our state, it is common that deed restrictions and covenants are written to say they shall exist for perpetuity except for, after a period of 25 years, a majority of the recorded lot owners may agree to abolish, modify or amend the covenants. Such agreement must be recorded among the county land records at the courthouse.
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Info_Hound
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Re: Hoa resurrection

Post by Info_Hound »

In Maryland if an HOA has not met in 5 years then by state law the HOA is considered disolved.

You might want to check with your state to see if there is a sunset law in place for HOAs. 20 years is a long time to be 'dormant'. A zombie HOA?
texasdiver
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Re: Hoa resurrection

Post by texasdiver »

mhalley wrote:We moved into our current home about 20 years ago. At that time, there had been a homeowners associaton in the past, but it had become inactive. Last year there were some issues that came up with a potential new development that the neighborhood felt would be detrimental to our community, so the association was revived and the development was stopped. No dues have been collected in the last 20 years. We did give them some money last year to help stop the development. The hoa has now decided that they want to become active again, and sent us a bill for a "mandatory" hoa fee.
My concern is that there is no documentation about the hoa. Is this the same agreement that was in effect 20 years ago?I think we may have received some documentation about it 20 years ago, but since the organization has been inactive for so long it has been discarded.
So, should I pay this new fee? Should I ask for a copy of the hoa agreement? What would you do in this situation?
Mike

First of all, you don't need an actual HOA to do things like organize neighbors against something like a potential development. You can form a voluntary neighborhood association and do the same exact thing. Previously I lived in a neighborhood that had an HOA and we experienced basically the same busy body nonsense that others here have documented. Now we live in a regular city neighborhood that has a very active neighborhood association that is not an HOA.

If your neighborhood has gone for 20+ years without an HOA then I suspect most neighbors are happy with it that way. If you care about this then I would most definitely get organized and come up with some sort of counter-proposal to convert the HOA into a neighborhood association that is voluntary and that doesn't have legal jurisdiction. That way the busy bodies still have something to do and there is a way to keep the community organized without getting into the weeds of HOA.
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JMacDonald
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Re: Hoa resurrection

Post by JMacDonald »

mhalley wrote: Last year there were some issues that came up with a potential new development that the neighborhood felt would be detrimental to our community, so the association was revived and the development was stopped.
Mike
When you state that the association was revived, was a new board elected by the homeowners? If so, some rules must have been followed to elect the board. You must have the original CC&Rs. Were the rules followed to elect this board? There had to be a meeting to decide the new fee. Where the rules followed to make this assessment? These are some of the questions I would ask. How do other homeowners feel about this issue?
Best Wishes, | Joe
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Steelersfan
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Re: Hoa resurrection

Post by Steelersfan »

JMacDonald wrote: When you state that the association was revived, was a new board elected by the homeowners? If so, some rules must have been followed to elect the board. You must have the original CC&Rs. Were the rules followed to elect this board? There had to be a meeting to decide the new fee. Where the rules followed to make this assessment? These are some of the questions I would ask. How do other homeowners feel about this issue?
I agree an election would have been required to revive the HOA, and that may or may not be legal after so many years (depends on state law). But if that was done correctly, depending on the CC&R's of the HOA, it may not need to take a vote to do an assessment.
tomd37
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Re: Hoa resurrection

Post by tomd37 »

Steelersfan,
Our HOA (private homes) CCRs and Bylaws clearly state that a special assessment requires the vote and approval of 75% of the 162 homeowners. Please note that I used the term "special assessment". About five years ago we needed to fund and initiate a 20-year capital improvement plan that had never been planned for in the prior twenty years of the association. Knowing that we would probably never obtain the required approval of 75% of the homeowners, the board of directors sought a legal opinion from counsel regarding raising the monthly dues in an amount needed to properly fund a capital improvement plan and budget for the next twenty years. Counsel reviewed the CCRs and Bylaws and came back in writing the our plan was completely legal. We raised the dues by $10 a month and now have a capital improvement plan that is properly funded to meet the future capital improvements in our subdivision.
Tom D.
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Steelersfan
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Re: Hoa resurrection

Post by Steelersfan »

tomd37 wrote:Steelersfan,
Our HOA (private homes) CCRs and Bylaws clearly state that a special assessment requires the vote and approval of 75% of the 162 homeowners. Please note that I used the term "special assessment". About five years ago we needed to fund and initiate a 20-year capital improvement plan that had never been planned for in the prior twenty years of the association. Knowing that we would probably never obtain the required approval of 75% of the homeowners, the board of directors sought a legal opinion from counsel regarding raising the monthly dues in an amount needed to properly fund a capital improvement plan and budget for the next twenty years. Counsel reviewed the CCRs and Bylaws and came back in writing the our plan was completely legal. We raised the dues by $10 a month and now have a capital improvement plan that is properly funded to meet the future capital improvements in our subdivision.
Agree. it all comes down to the CC&R's of the HOA and good practices over time by the HOA board.

I live in a condo so we have a condo association, different but much the same. We would require a majority vote (50%) for any capital expenditure above 10% of our established annual budget, about $20,000 in our case. There's no limit on how much we can increase our annual budget (so common charges) but that can be overturned by a 2/3 majority of unit owners if they can get their act together and work against the board. And a special assessment to replenish the reserve fund if it's "too low"can be done at any time with no recourse by the unit owners. Until the next time board members are voted on.
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Re: Hoa resurrection

Post by tomd37 »

Steelersfan,
By the way, our Tennessee Titans are hosting the Steelers tomorrow here in Nashville on Monday Night Football. I won't discuss the probable results......
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mhalley
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Re: Hoa resurrection

Post by mhalley »

They have elected a new board. Fortunately they have set the new dues at only 25 bucks a year, i am just concerened about the potential hassles of being told my grass is an inch too high, plus there is always the potential of the dues increasing.
Thanks everyone for your insights.
Mike
denovo
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Re: Hoa resurrection

Post by denovo »

texasdiver wrote:

First of all, you don't need an actual HOA to do things like organize neighbors against something like a potential development. You can form a voluntary neighborhood association and do the same exact thing. Previously I lived in a neighborhood that had an HOA and we experienced basically the same busy body nonsense that others here have documented. Now we live in a regular city neighborhood that has a very active neighborhood association that is not an HOA.

If your neighborhood has gone for 20+ years without an HOA then I suspect most neighbors are happy with it that way. If you care about this then I would most definitely get organized and come up with some sort of counter-proposal to convert the HOA into a neighborhood association that is voluntary and that doesn't have legal jurisdiction. That way the busy bodies still have something to do and there is a way to keep the community organized without getting into the weeds of HOA.
Best advice here. I also doubt your association probably jumped through all the hoops to create a valid organization.
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drawpoker
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Re: Hoa resurrection

Post by drawpoker »

mhalley wrote:..... they have set the new dues at only 25 bucks a year, i am just concerened about the potential hassles of being told my grass is an inch too high, plus there is always the potential of the dues increasing.....
Mike
I wouldn't pay them twenty five cents a year without seeing something in writing, duly recorded at the courthouse, that gives them legal authority for any of this !
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runner9
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Re: Hoa resurrection

Post by runner9 »

mhalley wrote:They have elected a new board. Fortunately they have set the new dues at only 25 bucks a year, i am just concerened about the potential hassles of being told my grass is an inch too high, plus there is always the potential of the dues increasing.
Thanks everyone for your insights.
Mike
They meaning all the property owners voted?

Can we ask what state this is?
Herekittykitty
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Re: Hoa resurrection

Post by Herekittykitty »

I'm not a lawyer nor do I have experience with HOAs.

Which is why I would not do anything acknowledging the existence of a HOA and certainly would not pay anything unless I had a real estate attorney research the matter and give me copies of the relevant papers, give me a legal opinion, and advise me. Even if you get copies of whatever is recorded at the courthouse, that still does not tell you how the law would apply in this situation in which there have been years without a visible HOA and now there are people who propose to create one or reconstitute an ancient one, as the case may be. I would be concerned that paying anything or agreeing to anything could somehow be seen legally as consent to reconstitute a HOA - although I have no idea - which is why I would get myself a real estate lawyer and find out. In addition, maybe there is a legal issue regarding liability for what a HOA does and which would depend on how the HOA was put together. I have no idea. If you don't know either - this is a good time to get a real estate attorney to tell you.

As far as whether or not HOAs are a good thing - there are a lot of opinions on that. Mine is that when I buy a house, a mandatory HOA, even one that charges a nickel, is an automatic deal breaker while a voluntary HOA would be an attraction. However whatever your opinion is, you need to find out the legal situation so you can make the best decision for yourself as to how to proceed in this matter.
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mhalley
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Re: Hoa resurrection

Post by mhalley »

They had a meeting and there was a vote. Unfortunately i was working that day and could not attend. I do not know how many people were at the meeting. We are in WV.
Mike
Last edited by mhalley on Sun Nov 16, 2014 1:35 pm, edited 1 time in total.
Herekittykitty
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Re: Hoa resurrection

Post by Herekittykitty »

mhalley wrote:They had a meeting and there was a vote. Unfortunately i was working that day and could not attend. We are in WV.
Mike
Interesting. One would think that anything that important should be done outside of normal working hours so more people could attend.....
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mhalley
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Re: Hoa resurrection

Post by mhalley »

I just retired, was working evening shift.
Mike
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LadyGeek
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Re: Hoa resurrection

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (homeowner's agreement).
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jojay
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Re: Hoa resurrection

Post by jojay »

Mandatory? Says who? It does not sound like a legally binding entity to begin with.
I am involved in my neighborhood HOA. It was a requirement when we built the house in 1994. For $150 per year, we get our money's worth with regard to common grounds maintenance, etc.

If it is $100 per year, so be it. But $100 per month? Do they have a charter? If not, do not pay.

Some of our members have not paid in years. Despite our asking, there is little we can do.
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Ged
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Re: Hoa resurrection

Post by Ged »

mhalley wrote:They have elected a new board. Fortunately they have set the new dues at only 25 bucks a year, i am just concerened about the potential hassles of being told my grass is an inch too high, plus there is always the potential of the dues increasing.
Thanks everyone for your insights.
Mike
West Virginia does have laws governing HOA's.

I'd start there.
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Watty
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Re: Hoa resurrection

Post by Watty »

mhalley wrote:They had a meeting and there was a vote. Unfortunately i was working that day and could not attend. I do not know how many people were at the meeting. We are in WV.
Mike

Most likely many of the questions that you have been asking were addressed at the meeting you missed and they may have handed out copies of the old paperwork. They may have already had a lawyer review the situation and provided an explanation.

The first thing I would do is to contact someone and ask for the minutes of the meeting.

One thing that I find odd about your situation is that where I live when a house is sold the HOA has to provide a letter saying that the HOA dues have been paid. People sometimes forget to get that and it can delay the closing of a house sale. With an inactive HOA there would be no way to get that letter. In my old subdivision there was a HOA that was being shut down and the last thing they had to do was have a vote and have a lawyer file the paperwork dissolving the HOA so that letter would no longer be required.
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JMacDonald
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Re: Hoa resurrection

Post by JMacDonald »

mhalley wrote:They had a meeting and there was a vote. Unfortunately i was working that day and could not attend. I do not know how many people were at the meeting. We are in WV.
Mike
This does not sound right. Even if you were unable to attend the meeting, you should have been able to vote on the new board. I would question the legitimacy of this new board.
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Steelersfan
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Re: Hoa resurrection

Post by Steelersfan »

JMacDonald wrote:
mhalley wrote:They had a meeting and there was a vote. Unfortunately i was working that day and could not attend. I do not know how many people were at the meeting. We are in WV.
Mike
This does not sound right. Even if you were unable to attend the meeting, you should have been able to vote on the new board. I would question the legitimacy of this new board.
Usually in such a meeting you are given notice of the meeting and an ability to appoint a proxy to carry your vote if you can't attend. It's up to you to pick someone sympathetic to your interests.

The OP poster will have to tell us if that happened.
gerrym51
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Re: HOA resurrection

Post by gerrym51 »

If you want the HOA to be effective i would work with these people
placeholder
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Re: HOA resurrection

Post by placeholder »

gerrym51 wrote:If you want the HOA to be effective i would work with these people
Why would you want that?
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flossy21
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Re: HOA resurrection

Post by flossy21 »

I'm Treasurer for our HOA and have been for about 10 years. I was new to the neighborhood at the time and was recruited for the job by the President at the time. We are in VA so the laws may be different.

The HOA's role is to protect and enhance the property values in the neighborhood. The HOA should be a legal entity. For instance we are a 501(c) non-profit organization as recognized by the state. We file an annual federal tax return and pay the State Corporation Commission an annual fee to keep our corporate status.

I don't know the laws in WV but I would imagine that if your HOA is collecting revenue then it will need to be reported as income and potentially taxed. Your HOA should have an annual budget that gets approved by the board as well. Your HOA should have a list of covenants that homeowners expected to observe. Finally your HOA should have open meetings with a schedule that is communicated well in advance (the law in VA is 30 days I believe).

I think you should write a letter to the President of the board requesting a copy of the annual budget, list of HOA officers and their contact info and a list of meetings dates/times for 2014/2015. Once you get those things I'd consider whether the budget makes any sense and if so, then I'd pay the $25. If not then you will probably be confronted with a series of letters which could ultimately culminate in a lien being placed on your home.

Good luck working out the issue.
drawpoker
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Re: HOA resurrection

Post by drawpoker »

I am beginning to think this group is using the term "Homeowners Association" just to puff themselves up, not in the legal sense of the term.

It is probably nothing more than a glorified neighborhood club where only owners, not families who are renting, may join.

If this is a subdivision of nothing but detached, single-family homes with each home situated on a nice-sized lot, and the sales and resales of the homes are as "fee simple" transactions, and there are no common areas to maintain, there would be no need for a true HOA to exist. (and take in assessments) My attorney told me that in a development with no HOA, if there were violations of the restrictive covenants blatantly taking place (like storage of boats, trailers, RVs, a commercial business being conducted, etc ) it would be a matter of any of the recorded lot owners could file an action in circuit court to put a stop to it.

If it was a development that had a lawful HOA functioning, it would be up to its board to send out warning letter, if the prohibited act continued, then the HOA would be the plaintiffs to file the action.

Probably this bunch of self-appointed do-gooders got so caught up in their zeal they meant to say that payment of dues is mandatory for members. But, membership itself cannot be said to be mandatory under these circumstances I would think.
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mhalley
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Re: HOA resurrection

Post by mhalley »

There is a very small garden area at the entrance to the subdivision that has a couple of plants there. There is a bulletin board there as well, where people can put up notices. Otherwise there are no real common areas or anything else to maintain. I sent for a copy of the HOA agreement to the newly elected president and he sent me back a copy, guess I need to ask for a copy of the minutes. Again, thanks everyone for your insights.
Mike
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Steelersfan
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Re: HOA resurrection

Post by Steelersfan »

If it's a legal Home Owner Association, and not an informal association of people living in particular development, here are the West Virginia laws in a couple of different formats:

http://homeowning.homestead.com/files/wvhoa.htm

http://www.hoa-usa.com/statelaws/wv.aspx

You need to determine what type of entity you're dealing with to know their powers, the rules they have to operate under, and your rights as an owner.
drawpoker
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Re: HOA resurrection

Post by drawpoker »

mhalley wrote:There is a very small garden area at the entrance to the subdivision that has a couple of plants there. There is a bulletin board there as well, where people can put up notices. Otherwise there are no real common areas .....
Mike
Sounds like someone years ago put in some plantings along the town/county right-of-way.

That is a whole lot different than a deeded lot that is part of your subdivision's community area.

I still think if you check into it closely your "HOA" will turn out to be "HAO"

" Hot Air Only "

:oops:
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