Tuesday, September 18, 2012

How to Dissolve an HOA

HOA stands for Home Owners Association, however not all home owners will stand for an HOA. If the consensus in your community is to do away with the existing HOA then it would be wise to hire a real estate attorney especially one that specializes in HOA formation and dissolution.

There may be different rules to consider for your case depending on your state, the type of property and the HOA documentation where it states the terms for a dissolution. You and your lawyer need to review these items.

Make sure everyone in the community is on board with the dissolution procedure. Some home owners may be difficult to get a hold of.  When voting, a non-vote is considered a no vote.

Another consideration for all of the home owners is that their deeds may need to be changed if they contain language of any sort pertaining to the existence of an HOA. There is an expense to making a change on a deed and hopefully all the members will still be on board with that.

Lastly, there is the question of common area spaces. Some HOAs provide an area like a park or multi-use building that is shared by the community. The title for that property will need to be transferred to a different entity like a maintenance company or investor who will take over the maintenance duties.

Reasons for an HOA or POA Dissolution

Some development projects stall and create road blocks for new investors when . It depends on the current home owners whether they would like more neighbors to share in the cost of development or go it alone.

When the HOA's power is abused and hurts the community it was suppose to help it may be necessary to disband. However, because of cost and time it could be beneficial to just vote in a better board and try to correct the damage caused be the old board.

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