Homeowner associations (HOAs) are given responsibility by recorded subdivision and condominium documents for maintaining, insuring and operating private communities’ common properties, such as streets, drinking water systems, sewer collection and treatment systems, and recreation facilities.
With many developers having abandoned projects before the HOA is operated by residents, the residents and other lot or unit owners (such as lenders that have foreclosed) are often faced with HOAs that cannot properly function. The Department of Natural Resources has nobody to work with to make sure that the drinking water systems and sewer systems are properly operated. Nobody mows the green areas and nobody plows the snow from streets.
But Missouri statutes do nothing to provide residents with a mechanism for assuring that the HOA will always be there. The result is an HOA that lacks the power to perform the needed functions, leaving the residents with a dysfunctional community. When a “new” HOA attempts to collect assessments, the residents sometimes challenge the HOAs power to assess for basic services.
Most Missouri HOAs are and should be corporations, which are required to file annual reports with the Missouri Secretary of State. If the filing deadline is missed, and reinstatement is not made promptly, the HOA corporation is “administratively dissolved,” having the power only to dispose of its property and obligations. Reinstatement is often difficult, because it requires providing proof of having filed state and federal income tax returns, which often have not been filed. The developer and any financial records have often disappeared.
In four recent Missouri appellate decisions, the courts have squarely identified the problems faced by defunct HOAs.
- In Beavers v. Recreation Association of Lake Shore Estates, Inc., from 2004, the court held that an HOA corporation could not be revived once ten years had passed since it was dissolved by the Missouri Secretary of State for failing to file an annual report. The statute imposing the 10-year time limit had been amended in 1998 (section 355.716 RSMo), but Lake Shore Estates HOA had been dissolved for 10 years as of 1991. The court said that the Secretary of State’s attempted reinstatement of the HOA after the 10-year hiatus was void. Lake Shore Estates was left without an HOA that had the power to collect assessments.
- In 2005, Pioneer Point HOA v. Booth gave some hope to residents orphaned by the developer’s failure to keep the HOA going, holding that a new HOA corporation had the right and authority to perform the functions of the original HOA to impose and enforce assessments. The developer created a new HOA and, as president of the old dissolved HOA, assigned its powers and duties to the new HOA. The court approved this assignment, relying on language in the original covenants that contemplated there being successor HOAs, pointing out that the validity of the assignment was not challenged in the trial court.
- In Valley View Village South Improvement Association v. Brock, a 2009 case, the court of appeals held that without an assignment of powers and duties of the old HOA or the acquiescence of all the lot owners to be subject to the powers of the new HOA, the new HOA had no powers at all over the water system established by the developer for the community. While the lot owners may individually have rights to use the water, no new HOA could exercise the powers and duties of the HOA set forth in the subdivision covenants.
- In litigation between Stephen Veal and the DeBaliviere Place Association, the old HOA had been dissolved since 1992, but attempted in 2006 to assign its powers and duties to the new HOA (formed in 2003). The new HOA attempted to collect assessments from Veal for the years 1998 through 2007. The new HOA was successful on a motion for summary judgment and Veal appealed. The court of appeals agreed with Veal that the 10-year period for reinstatement of the defunct HOA had run in 2002, as in the Beavers case, before the statute was changed to eliminate the 10-year period. The new HOA asked the Missouri Supreme Court to review the case, and in April 2011, the Supreme Court set aside the decision of the court of appeals, in Debaliviere Place Association v. Veal, holding that the old defunct HOA, without being reinstated as an active corporation, still had the power to assign its rights to enforce recorded covenants and to collect assessments.
Legislation is needed to provide that a judge, upon the petition of two thirds of the owners of lots or condo units in a development, would have the power to determine that a new HOA is the successor to the HOA named in the declaration of subdivision or condominium, regardless of whether the old HOA could be reinstated.
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How would a developer or a couple of residents create a mandated nonprofit association back in the 1970’s? HOA attorney refers to them as a duly organized [unincorporated] homeowner association in court documents to file a certificate of non payment of assessments.
In the 1970s, many HOA were unincorporated associations. Creation of an unincorporated association can be accomplished by referring to such an organization in a recorded declaration of subdivision restrictions. Proof of the existence of the unincorporated association is sometimes difficult, unless it has scrupulously kept minutes of meetings and maintained records of its activities.
Our association has not had a quorum when they have conducted meetings and taken votes as well as they held elections this past June but did not have three people to put on the ballot so the three previous board members reran themselves. I don’t believe this is proper procedure based on the laws in Missouri. I believe if there is not three people willing to run then the association becomes defunct. Does anyone know if that is correct? Also, I believe I’m correct when I say that our association has to have a quorum to run their meetings and take votes. We have been told by the association that they can do what they want and sue them if you don’t like it. I believe this next year we are going to withhold our association dues and put them in an escrow account until they use the money for the road as it states in our subdivision restrictions. We figure let them put a lien on our home and we can go to court. I would love to have the judge ask them for minutes from the meetings as well as vote counts. They voted to take away proxy votes and force you to attend the meeting at the President’s home rather than a neutral location (public library had been suggested but they said no) because the President says that no judge is going to tell him what to do. The President has also told us that we are not a public meeting (which a judge told me it was), it’s a private subdivision and we are not governed by the law or police. Really intelligent individuals. I recently sent them a letter letting them that if they are not governed by anyone than on the flipside we do not have to follow what they say because who are they? I have spoken to my attorney and he indicated there is a real void in Missouri when it comes to Homeowners Associations.
Please consult your own attorney about the problems in your subdivision.
I know of no legal rule that suggests that an association is defunct when there are not sufficient people willing to run the association.
If you refuse to attend a meeting of your association held in your subdivision, I really don’t see how you can complain about the lack of a quorum. If you want to change the way your association operates, you need to obtain the support of your neighbors and run for the board. Litigation and withholding of assessments should be last resorts.
In Missouri, homeowners’ association meetings are not governed by the Sunshine Law, which is applicable to governmental bodies. Most homeowners’ associations in Missouri are “mutual benefit corporations” under Missouri’s Non-Profit Corporation Law, and members have rights to inspect records and receive annual financial reports and to receive notice of and attend annual meetings.
I have a problem with our HOA. As with many developers, ours went under and the property was taken back by the bank and then sold to a company that buys “distressed” properties. They have 80+ undeveloped lots to the 60 homeowners that actually own their homes and live there. That company’s representative immediately demanded a seat on the board and a homeowner resigned to comply. She then proceeded to change our by-laws so her employer would not have to pay any dues for undeveloped lots using her 80+ votes to pass the change. This was in 2011 and her company has not paid dues nor put not one dime into the development since they purchased the property. She has stated they are “not a developer and will not assume the duties of a developer”. She has, however, consistently voted every one of her 80+ lots on every issue overruling the homeowners, including appointing yet another employee of her company as a board member. With just a 3-person board, the homeowners have no say in any decisions and are at the mercy of these people who don’t pay a dime to keep up the community! They have now let our insurance lapse and the rate went from $3900/yr with a $500 deductible to $14,000/yr with a $5,000 deductible and have called a membership meeting to vote on a “special assessment” for the homeowners to pay this. This is in addition to a $300 (75% increase) in dues for 2014 due to increased costs but the pool/clubhouse was not opened and couldn’t be with no insurance. What recourse do the homeowners have in this situation? Every thing they have done has been detrimental to the HOA and favored their employer. We don’t have a lot of money and they have the votes. And advice would be appreciated.
Mary,
An attorney experienced in the law relating to subdivisions and homeowner association can review your governing documents and evaluate the actions of the company that bought the majority of the lots in the subdivision. There is no substitute for document review and experience.
My husband and I were happy to attend the meetings of the association until the Board of Trustees started doing things against our restrictions, changing restrictions without the proper vote, removing restrictions without the proper vote and taking votes on changes to the restrictions that state they can do what they want with a minimal amount of people agreeing. They also refuse to let someone audio tape the meetings. They recently took a vote to buy a sign that says private subdivision keep out. The county told us that the road is a public access road and that anyone can be on the road, whether walking, running, riding bikes, etc. and there is nothing anyone can say to them. They can only call the police on people that are committing a crime. There were many of us that thought that was a waste of money but because we didn’t go to a meeting they decided to take a vote with seven people. In our bylaws it states that we will have notice of any vote so that we can vote. If you disagree with anything they are doing then the yell at people and belittle them. It’s rediculous. If someone doesn’t pay their assessements (which I think there are two people that are currently in arrears) can the Board put a lien on their house even when the Board has not complied to the restrictions either? That doesn’t make any sense to me. I am planning on contacting my state representatives about this. I’m also wondering what the Board’s recourse is if we put our assessements in escrow to only be used for the road fund and not what they want to spend it on. I’m planning on doing that in the spring.
The Declaration of CC&Rs usually requires 3/4 of the lot owners’ approval to effect amendments, and Articles of Inc. usually require 2/3 lot owner approval to effect amendments.
Allowing 2/3 of the lot owners to petition a judge to authorize governance by any entity other than the HOA specifically named in the Declaration may seem appropriate where the developer still has unsold inventory – but in sold-out communities, it would allow amendment of the Declaration without the approval required for any other action.
How else can the problem be addressed?
I firmly support and help our current HOA Trustees. They have regained our status of incorporation with the state by filing several years of Annual Reports and tax filings. They have created spreadsheets to document Credits/Expenditures, Assessment fee collections, checking and emergency fund accounts. The HOA financials are available to members for viewing. In addition, they have standardized the collection of delinquent fees with letters requesting payment and lien placements. Currently, they are working with a lawyer in amending our Indentures to allow for late fees, interest and foreclosure on properties with debt owed the HOA, entering into contract with a management company, and decreasing the number of votes required for special assessments and future amendments from seventy five percent (75%) to two-thirds (2/3). I have strongly urged they review the state statutes for Non-Profit Corporations for information on rules we may have to adhere to and requirements for meetings, voting etc.
Questions:
1. How strictly must the HOA follow the MO. Statutes for Non-Profit Corporations?
2. Are there any sources available to a MO HOA as to how to operate in an effective and legal manner?
3. Is there a minimum number of member votes by law that our amendments must require to change future amendments, levy special assessments etc?
4. Do HOA management companies have any more clout than HOA Trustees in pursuing payment of debts owed the HOA?
Janet,
Your best bet for help is to turn to the Community Associations Institute, which is an educational organization that provides support and training for board members. Send an email to the St. Louis chapter at caistlouismo@sbcglobal.net.
I don’t give legal advice on this blog. I discuss legal issues. There are several attorneys in your area who are active in CAI and who can answer your legal questions.
Is there any legislation in the works to give HOA’s the ability to enforce their Indentures, covenants and ByLaws?
Real estate covenants are, generally speaking, enforceable by courts. No legislation is required. For your HOA’s particular enforcement problems, you need the counsel of an experienced real estate attorney in your area.
Harry Styron I know you are not giving legal advice, but I am curious as to what you think about HOA’s and the Sunshine Law. You say the Sunshine Law is only for Governmental bodes, but the Sunshine Law also includes “quasi-governmental bodies”. According to RSMo Chapter 610.010(4)(f) Quasi-governmental is anyone authorized to do business under Chapter 352, 353 or 355. Chapter 355 is the MO Non-Profit Corporation Law chapter. So if they incorporate under Chapter 355 do you think they are subject to Sunshine Laws?
References:
http://ago.mo.gov/sunshinelaw/chapter610.htm#header1
You’re not reading all of 601.010(4)(f). The sub-paragraphs a and b of (f) add some qualifications to (f) that do not include HOAs under any circumstances that I can imagine. By your logic, any non-profit corporation would be subject to the Sunshine Law.
Currently I went to the HOA annual meeting in my community and was ‘elected’ to the board, after one phone call from a board memeber who had been on the board approx 40 years called me to explain I wasn’t able to change a single thing until all other board members agreed and that nothing will be changed if it is up to them… I read my bylaws and they where written in 1967. How uptodate do the bylaws need to be considering the city annexed the area in 1970 but the HOA remained, the bylaws talk about things the city takes care of now. It takes 2/3 majority of homeowners to have the bylaws changed… however it does state proxy voting is allowed but the board states the memebers must be present at the meeting. They are holding closed door meetings every month and keeping members in the dark on things. Given what this boardmember told me I gave notice to not accept the elected position and to just pay the dues and not stress too much… but it’s got me to wondering I did some research but haven’t come up with much yet
If you want answers, you need to contact a lawyer in your community who is experienced with homeowner association law. If you need assistance in finding such a lawyer, check the Community Associations Institute (caiononline.org) to find the chapter in your state. Somie of the issues you’re facing–the approval requirements for changing bylaws or other documents, the effect of annexation, and whether closed-door meetings are permissible–often have complicated answers or no clear answers.
New board members often want to update the bylaws; in my experience this is rarely necessary. Bylaws don’t have a shelf-life. Portions of bylaws that are no longer relevant can often be ignored.
New board members will probably be more effective if they don’t start off trying to change things. I suggest listening and learning for a while; you sometimes learn the most from people you intially disagree with. You may find out that the changes you think are important are not urgent or even possible. You also may conclude that service on the board is not your cup of tea.
I am actively involved helping our Trustees organize our HOA affairs. From what I have gathered in my research, the Trustees may hold meetings among themselves but should keep meeting minutes that are available to HOA members to review upon request. I believe most HOA are regulated by State laws for non-profit corporations. See http://www.moga.mo.gov/statutes/chapters/chap355.htm
Your Indentures/ByLaws should give some idea as to the role of a Trustee. I have saved several web sites that may be of assistence. Please feel free to e-mail me if I cam help. You may find my e-mail at the bottom of our HOA website. I am the blog manager.
Janet,
Thanks for commenting and offering to help.
Many readers of this blog are from outside Missouri. Many associations, especially older associations, are not incorporated and not governed by corporation laws.
I should stress that I do not have any legal expertise. I can only offer information about HOA sites on the net we have researched to help us be a more effective Association. Our HOA is registered as a nonprofit corporation with the state of Missouri. If an association is not incorporated with their state, is their only governing rules those in their ByLaws?
Thank you both for getting back on this matter. The HOA is a registered HOA in Missouri and has been ran by the same members for several years our main concern mine and other homeowners is that they are making some sort of a profit on our association dues, as a non for profit group I’m pretty sure they can’t do that. As far as going to the etereme of calling in the lawyer.. unless I have proof of them putting the money in there own pockets the money and resources to take them to court which I do not. I have also heard by several it isn’t worth the headache as there is no clear cut answer (as mentioned) above as to what the rules really mean. One thing I do stress is when I asked for a copy of the bylaws they gave me only one part of the bylaws and it didn’t include my house which on my own research was added to the association in 1970 and amended to the bylaws. As a non for profit organization I think they are supposed to give all records if requested? The website they have doesn’t have the bylaws listed you have to contact a board memeber which they don’t even provide direct contact information anymore just a generic email address for whoever is in charge of the website which is only updated twice a year at most….
Your ByLaws should be available from the Recorder of Deeds in the County you reside. You should get the registered copy and read it carefully. Personally, anyone managing someone elses money, ie your Homeowner’s Association, should be keeping all receipts and have available to members financial statements that can be viewed by it’s members. Our HOA had a one man act, a check book without entries, and no receipts. We now have a full board of Trustees, receipts and spreadsheets showing all income and expenditures, up-to-date banking accounts etc. Our books were available for viewing at our last meeting.
Were the other Trustees all re-elected at your annual meeting? I think it is a shame you declined a Trustee position. It sounds like you would like to make a difference and improve your HOA.
If you haven’t asked to see the years financials, you should. Try asking, in writing, to see the financials. Then go from there.
What city/county do you live in what is the URL for your HOA?
We have 115 homes; only 4 households other than Trustees showed up at the annual meeting. The meeting date was mailed, signs were put up and our web site promoted it. But most people just do not care. One Trustee was disappointed that no one wanted to see our financials, yet people are always complaining they don’t know where their money goes.
Bylaws are often not recorded. In Missouri, covenants and restrictions affecting land should be recorded and available from the county recorder’s office. But bylaws are supposed to be a document that sets out an organizations procedures, not restrictions on land use, which are different than trust indentures or declarations of covenants, conditions and restrictions.
In practice, however, the term “bylaws” is often used to refer to real estate covenants and restrictions. And many time bylaws are recorded with declarations of covenants and restrictions. A competent real estate lawyer, who knows the laws and customs in your community, can sort these things out.
the website for the HOA is sites.google.com/site/deerparkeast
it’s in st. joe buchanan county mo
I was supposed to take over the website however they told me in order to change things I would have to wait a month until the next closed door session of the board and then it had to be voted on by the board and all 9 members had to agree and they told me they didn’t want there contact info on the page they sent out the dues renewal with the meeting notice on the second page at the top with the following “MONDAY 28TH 2011” and written in was time.
We are currently working to amend our indentures. I agree with Mr. Styron. You cannot do that effectively without a lawyer. We do have a lawyer for this process. The hard part for us will be getting the required 75% member vote required by our current Indentures to make amendments.
Thank You again Mr. Styron for correcting my errors. Our ‘Restriction Indentures’ are recorded with the County. They just happen to be all we have. We do not have additional ByLaws.
To outofdatebylaws,
Other than more transparency in regards to your HOA’s financials, what other things do you think must change?
Your HOA is registered with the State of Missouri; Go to the following link and click on “Filed Documents” and then read the creation filing. The last annual report will give you the most recent listing of your HOA officers. Those will give you some information as well as Your HOA document filed with your county recorder. https://www.sos.mo.gov/BusinessEntity/soskb/Corp.asp?643825
Here are a few other HOA websites I think are in your area you might want to check out:
Northridge:
http://northridgeassc.com/
Stonecrest:
http://www.stonecresthomesassoc.com/
I am doing our HOA webpage and is not as polished as the ones above:
http://our-rosedale.blogspot.com/
Though many are not from Missouri, these sites still contain some great information:
Finance/Record keeping:
http://real-estate.lawyers.com/homeowners-association-law/Finance-Basics-of-Homeowners-Associations.html
Click to access How_Long_to_Keep_Association_Records.pdf
Mr. Styron mentioned the Community Association Institute earlier, their national site is full of educational information for non-members. See the education and information tabs across the top of their page:
http://www.caionline.org/Pages/Default.aspx/
If you have a 7-9 member board, I would guess that money paid is being used legally. But, transparency should be the rule of the thumb. Members should have access to an annual financial report and budget.
Good Luck
Thank you both for your input on the matter. That is the main thing and for them to communicate with the homeowners better, provide meeting minutes, etc I know all of the board members since I did attend the meeting and have dealt with them on a couple other occasions regarding a fencing issue.
Mine and from the other handful of homeowners I’ve spoken with, main reason for questioning the board is they don’t provide us with the following :
there contact info – just the generic email address
financal reports that are more than a world document one of them as typed up… reminds me of the “fuzzy numbers”
they have never held an election with the homeowners ie members voting on who the board members are (that is no elections)
Anyways I will continue my research and yes I have visited the SOS page.
the main thing that concerns me is that we have an HOA it started because we have community property ie the park…
I spoke with my neighbor recently who has lived in the neighborhood for several years and her main concern as well as everyone elses is if we don’t have the “pool” anymore what are we actually paying for…
and that we only hear from the board once a year when it’s time to collect our dues… We just want to be more in the loop and determine why it is we don’t have the pool but are still paying the same dues as when we did have the pool and where that money is really being spent
Outofdatebylaws,
I would ask in writing for a copy of the past years financials, or to view them. They may charge you for copies. I would also ask what the terms of service are for your HOA directors and officers and when the next election will occur. Approach them in a positive manner. Show them what other subdivisions have on their websites. Encourage them to list the Directors names as well as a contact phone/e-mail.
Good Luck to you
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When our neighborhood was first formed nine years ago, the developer created an association putting himself in place as the sole officer. He never collected dues or held meetings. The guy continued to file annual papers with the state until last year. He went bankrupt and will not even speak to any residents about anything. The 19 page covenants don’t tell us what to do. How do we put the power back in the hands of the residents? How do we even pay a lawyer when we have no public money or fees collected yet? Where do we go from here?
Some states, Missouri included, have a statute that allows members of a non-profit corporation to ask a judge to order that a corporation meeting be held. At such a meeting, the members could elect a board and thereafter begin to function.
You need to hire a real estate lawyer in your community to review recorded covenants and whatever records of the homeowner association have been filed with government agencies. The lawyer should be able to advise you on how to proceed.
As far as how to pay a lawyer, you’re going to have to gather money to pay the lawyer any way you can.
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I live in KCMO. I bought my house in 2008. The hoa when I moved in kept failing to do there contractual deeds that they said they would MOW and Weed and Maintain a community pool. I quit paying and after 2 years a new management company stepped in and demanded I pay all of my back dues. I refused due to the fact I hired outside help to mow and take care of my lawn.I recieved a lien notice in Dec 2010. Just last week they filed suit to forclose on my house, I have a current mortage with the bank and my payment has never been late and my house has never been in danger of being taken away. I never thought in a million years that anyone who does not hold that 1st mortgage could legally take my house and for $3,600. I think the LAWS DESPERATELY NEED TO BE CHANGED TO PROTECT HOMEOWNERS!!! Im on board what can I do?? I want to make sure this cant happen to anyone else…ever!!!
What was the ending result once the HOA put the lien on An you were in good standing with your bank?
How often does a judge actually agree to take a house from a homeowner for unpaid DUES??? The house belongs to the bank not the HOA???!!! In a market when banks are usually forclosing for unpaid mortgages, why would it be a practice to take a home away from a homeowner by another source?
Lindy,
If you have been sued, you should immediately seek legal advice from a real estate lawyer in your community.
No lawyer can give you good advice without reviewing your subdivision’s covenants. A lawyer in your community may be experienced with your subdivision and how the local judges are likely to view your circumstances.
Can I get my unit dissolved from a condo association that has not followed the bylaws?
Chelly,
You need to speak with a real estate community where your condo is located. A condo unit cannot be separated from the condominium, without terminating the condominium, which is complicated.
WHAT DO YOU DO WHEN A HOA HANDS OUT MONEY TO PEOPLE, INSTEAD OF USING THE MONEY FOR THE ROAD AND WATER SYSTEM. SAME FAMILY HEAD OF HOA FOR 30 YRS. THERES LIKE 50000.00 MISSING. WE ASK FOR ADUIT, THEY REFUSED. WERE NOT ALLOWED TO COME TO MEETINGS BECAUSE WE HAVE MONEY IN ESCROW ACCOUNT. DONT HAVE MONEY FOR A LAWYER SO THATS NOT AN ANSWER FOR US. We are in Missouri
I’m sorry for your situation. But the problems you have will require an experienced real estate lawyer’s skills. I’m not aware of any short cuts.
We are a “community” of 144 condos (plat called for 288, but developer bailed), as well as 92 row homes, and common areas for all. We have a Master HOA, but the condos claim a separate association and separate Board of Directors because thier “indentures” are separate. What does that mean? They claim Condo owners can vote on Row Home issues and vote for Master Assoc. board members, but not vice-versa. The Master Assoc. Board has read the Declarations of the Condo Assoc and the Master HOA and sees no difference. What are Condo Indentures and why are they separate/superior to Row Home rights in the same community with the same dues? We are in K.C., Mo.
Can you legally remove your property from a Property Owners Association in Missouri?
Bill,
When recorded declarations of subdivision covenants are prepared properly, membership in an association is inseparable from ownership of a lot. However, many subdivisions are not set up properly, so there is a possibility of “cracks” that might let you slip out. A good real estate lawyer would have to examine the recorded documents to give you an opinion.
In the 1990s I bought 50 vacant lots through tax lien foreclosure in a “paper subdivision” in Arizona that went bankrupt in the 1970s. Some big-shots bought up the majority lots (about 1500 lots), revived the defunct HOA, began charging us HOA dues and assessing our lots to put in the streets and utilities. Is this legal?
Rachel,
You should consult an attorney who is licensed in Arizona and who is familiar with homeowner association law.
To follow up: I found a recent Arizona case that appears to deliver a fatal blow to the HOA, here’s a copy-paste of a blog post I made about it:
Dear Mr. Neff: I just read your article about Raimey v. Dreamland, I was wondering what your opinion of this case is in regards to the documents you drew up for New Tucson. At the time, according to the plat maps, there were no common areas in the subdivision, all areas were “dedicated to the public.” When the HOA formed and building permits were applied for, the HOA assumed ownership of the “Equestrian Ways,” drainage areas, etc. as separate, assessed parcels. Am I as a lot owner required to pay assessments and dues to the HOA?
I should add: does the HOA now owe me all the money I paid in dues & assessments!?
The AZ Court of Appeals found:
Deed restrictions for residential community without
common areas, containing only restrictive covenants
pertaining to each lot owner’s personal residence,
could not be amended by majority vote of lot owners
to require membership in homeowners’ association
and imposition of assessments, and thus amended
declaration of restrictions requiring lot owners to pay
assessments to association was invalid.
Read annotated PDF of Raimey v Dreamland.
Neff drew up the CC&Rs for New Tucson, prior to that there was only three pages of deed restrictions.
More at my blog: http://sycamorevista.wordpress.com/
It’s important to remember that the rulings of courts in Arizona do not establish legal rules in other states. In reviewing the Raimey v. Dreamland opinion, I noticed that the court carefully sifted through a lot of recorded real estate documents to reach its conclusion. Different facts might provide the basis for a different decision by the court.
Missouri law is consistent with the principle that a declaration of covenants cannot be amended to create new burdens without unanimous approval of the lot owners, unless the declaration specifically provides for creation of new burdens with something less than unanimous approval.
Harry,
We moved into an unfinished neighborhood nine years ago with the awareness of a HOA. At signing in early December 2003, we were required to pay for that whole year, as well as the following, up front. When the yearly statement (a cryptic envelope with a c/o and PO Box) came in 2005, we attempted to find out who was behind the HOA and what exactly they were doing with our money. All leads were dead ends. Since then, yearly statements have been hit or miss, the common areas are neglected (some of the letters to the neighborhood sign have been broken or missing for years) and not once in our nine years of residency have we seen so much as a newsletter about what’s going on with the association. There is no “board” and there are no “members” – that we’re aware of, anyway. Because of these reasons, we stopped paying until we got some answers.
We never got any.
So now we’re moving and they’re coming to collect. Already there are red flags because they’re charging us for nine years, and I know we’ve paid two. How can we fight a care-of and PO Box???
Travis,
Most attorneys that I know would be able to figure out a strategy for uncovering the mysterious identity of the HOA.
Our HOA in Camden County has a community well. We are a non profit corporation. Can the HOA shut off water to residents who do not pay their dues. The purpose of the HOA , created back in the 1970’s, was to support and maintains the two wells and roads.
Laura,
I am not aware of any statute in Missouri that authorizes HOAs providing water service to cut it off for non-payment. Your recorded declaration of covenants possibly provides for cut-offs.
Generally, I recommend that HOAs sue the delinquent owners if delinquent only for a couple of months. Pretty soon the word gets out and everybody (almost) pays.
Thank you for the reply. I will review the covenants again to see if our situation is mentioned.
I live in a subdivision who has never had a subdivision meeting for an HOA, suddenly one formed-still no meetings or minutes. We were paying a company that was here when I first moved in. 3 people decided to form an HOA hired some management company to be in charge, our fees have gone up. Can they do this without ever holding a sibdivision meeting or anything? I have never elected these people, never voted, or anything? Now 2 out of the 3 board positions have been taken over by a new construction company in the subdivision, and they are doing crazy things.
You need to find a lawyer in your community to assist you with this.
Hi! When we moved in in our neighborhood, in 2008, there was an HOA but had been dissolved in 2010. Now, neighborhood is wanting a self managed HOA and three neighbors had nominated themselves to be in the board. Now they are collecting $350 which I don’t have problem paying. But when I checked with SOS, they said that our HOA is not registered. So can they legally collect money cause it seems like, we don’t have an HOA.
As the Secretary of my Homeowner Association in Fort Collins, it’s sometimes a challenge trying to maintain work, family and my HOA duties . However, when I discovered Association Online all of that changed. No need to worry about piles of paperwork, their software is quite easy to use and all our HOA documents are stored and managed online. This allows our Board of Directors to operate in a more effective way. You should check them out at http://www.associationonline.com or call (970-226-1324). I highly recommend them for all Homeowner Association needs.
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Does anyone know if an HOA can be “divided” into 2 associations? The neighborhood has gotten so large, i.e., 144 condo units and 92 row homes, that the necessities of each section are different. Our ByLaws and CCRs are recorded with the County. Our Board of Directors consists of residents from both factions. Most everyone agrees we could function more efficiently if we could “divide”? Any suggestions?
Rather than split an association, which under Missouri law would create questions of legitimacy of the new associations, it might be better to have committees or advisory boards to be advocates for the respective groups having shared interests.
Harry: I have been asked by some of the residents in our neighborhood to get your input on a bad situation in our community. I will try to keep this short. There is a property owners association that is running the water-sewer in our neighborhood. The problem is that the current operating board did not receive an assignment from the original developer. He died before that was possible. We have had many investors over the years come against the board legally and the board is broke defending themselves. If the residents were to want to start a new HOA how could we accomplish that? There is a current open case between the most recent investor that bought 40 properties at tax sale and the board. Can we as residents, petition the courts to declare a new HOA? It appears the investor is going to take over and start his own HOA unless we can stop him.
I don’t give legal advice on this blog. If you wish to hire me, or any other attorney, you need to contact the attorney at the attorney’s office and give the attorney an opportunity to check for conflicts of interest.
I just bought a house with an HOA. I asked the builder for the rules for the home. I got none. I asked if I could put in a deck because the builder did not provide one. My deck is small, anchored, and safe. My home sits 4 feet off the ground on a slope so just putting in stairs is not practical. I put it in just after I moved in because I wanted my family to be able to get out for fire or assault. Two months after I moved in I got the rules in a CD. Two months. THen I got letter a week later saying that I did no get permission from the HOA to put in the deck.
I have not seen anything in the rules that says I need permission to put in a deck, nor is there any stipulation as to what kind of deck I can put in. There is for a fence or a structure like a shed, or concrete, but not for a deck. Plus there is not stipulation that my dogs should be on a leash when they go outside, just that I can only have two and they cannot bark a lot. There is no veribiage about me putting thinks in my back yard or under my deck just that I cannot leave anything lying around and I cannot work on my car in my driveway or in the street.
The question I have is that if it not in the rules, if the wording does not specify, what power does the board have to enforce it. If they put a lean on my home, what power do they have when then never sent me the rules and here as no verbiage specifying their claims? Please let me know thanks
Carl
Carl,
To get answers to your questions, you need to consult a real estate lawyer in your community.
Nobody should allow themselves to buy property without first reviewing the subdivision covenants (also called restrictions, CCRs, and declarations). Most questions can be resolved before you buy.
As a real estate lawyer, I am continually surprised that my clients will call me to vent about a traffic ticket, but will sign a real estate contract without asking me to assist. Or they sign the contract, then ask me to look it over.
How would someone hire you?
I’m now not certain where you are getting your information, however great topic.
I must spend some time learning more or working out more.
Thanks for excellent info I used to be in search of this info for my mission.
There are 10 shares in a “community well” here where we live on the lake. We all pay the same amount each 6 months to cover the cost of repairs and the electric to run the pump and our dusk to dawn lights. There is 1 man that hasn’t paid his well dues in 3 years…..and he hooked up a restaurant to the community well. He did this years ago and the people that were handling the money before never stopped him so they now consider our well a “public” well as it feeds the restaurant. We have 2 people that are willing to “take over” the books/money and all that goes with the well fund. We would love to cut this guy off since he doesn’t pay…do we have the ability (legally) to lien his property? And how do we go about setting up a well fund group that has some “teeth” as far as making people pay?
Our HOA Board doesn’t want to bother with minutes of board meetings; only the annual community HOA meeting. Is there anything in Missouri (or Condo) law that requires minutes of board meetings be on file?
The Missouri Nonprofit Corporation Law requires that all nonprofit corporations keep minutes of board meetings and meetings of the members.
I have a question about creating a HOA 3 to 5 years after the subdivision is lived in. Is it legal to do with out a vote of all the home owners?
Assuming that you’re in Missouri, the creation of the HOA well after the subdivision is not illegal. Whether it is the HOA that has the powers conferred by the subdivision covenants is a complicated issue that an experienced real estate attorney can advise you on.The factors discussed in this post have to be considered in light of your subdivision’s recorded documents and history.
This is my dilemma, so I hope it makes sense. We moved into a “subdivision” in Lincoln County, MO in March of this year and are debating whether to pay or not pay the association dues. The only reason we do not want to pay is because this “subdivision” consists of 10 lots and only 3 lots have been sold since February of 1995.
Let me break it down a little further. The developer of this subdivision used one of the lots to build his family a home in 1997. He sold the house in 1999, I believe, and built another home in the subdivision on another lot. The 2nd owners purchased the home and sold it in 2003 (and we bought it from the 3rd owners) and in all of these years (1999-2014) no enforcement of any rules or association dues have ever been collected.
Before we closed on this house in March we asked the sellers to sign and notarize a document stating that in their ownership no dues or covenant rules have ever been enforced or collected. The other two lots that are sold are to the side and directly behind our property, which were purchased by the developer. None of the lots are actively available to purchase and haven’t been since 2003. The developer, which is also our neighbor, is now asking us to pay association dues.
When the covenants were recorded in the county in 1995 one of the covenant restrictions states; “No open sewage or drainage system shall be permitted for the disposal of the sewage or water from internal households. All septic tanks mush have leech fields properly installed.” Great restriction, unfortunately the developer did not follow his own covenants. A week before we closed on the house we were informed by the inspector that our house failed inspection immediately because we do not have a leach field or proper drainage of sewage on our property and it actually drains right into the creek behind the house.
Since the covenants were recorded in 1995 and the home was built in 1997 and the developer did not follow his own rules and never enforced any covenants ever, why would we have to pay? To my knowledge the subdivision has never filed a tax return, which I believe you have to whether one collects dues or not. I know a good amount about subdivision covenants because I was the president of my association (48 homes) for nearly 10 years before we moved to Lincoln County.
So, I guess my question would be, how do I find out if this subdivision is still a legit? By the way we believe the only reason the developer of the subdivision wants association dues now is because of who we are. My parents are actually suing the developer because he placed his since on my parents property and refuses to remove it. Is there a way to have this particular lot that we now live on disbanded from the association if one still exists? The developer wants us also to write them a check made out to them for the association dues and I believe there is no separate account for the subdivision. When I asked the developer that they have to provide a treasury report every year and how the money was used (road) they seemed to bulk at that request. Please help or if anyone could point us in the right direction I would really appreciate it. Thanks
Nick,
The types of issues that you raise are the kind of things that real estate lawyers deal with on a day-to-day basis.
You should hire a real estate lawyer in your community to advise you. A real estate lawyer’s advice should be based on a review of the recorded plat and covenants. In many instances, the lawyer may be acquainted with the subdivision and the developer. A local lawyer may also know about similar problems and how the local judges are likely to view it.
Great. Thanks for replying back and I will contact a real estate lawyer regarding this issue. Thanks again.
I live in a development in Stone County, between Branson West and Kimberling City area. Our development includes a total of around 250 lots, of which only 27 were ever sold and built upon. This was started in 1982, and that is when the HOA was organized, and the covenants have not since been revised either. There was an escrow set up in which every lot purchaser had to pay in $1350 toward a sewer system that was to be installed after 75 lots were sold and built upon. The developer has ceased trying to actively sell the lots, and is only willing to consider the sale of them as a whole to anyone interested. So, it’s not likely that the sewer will EVER be built and they are sitting on our money, for 32 years now, which could be better used for other maintenance. We have recently had some well and water quality issues, which get worked on, but no one ever keeps the owners informed about what is being done and why our water looks so terrible anymore. The board is 5 people, a President who is a homeowner here but has been the President for YEARS and won’t give up the seat, the owners of the development (2) and two others whom I do not know. Many residents are getting frustrated with the group for lack of communication and “dictatorship”. But the problem comes in in that the developer, having ownership of about 220 lots yet, takes the liberty of a vote for each lot and therefore does whatever they want. The remaining 27 of us never REALLY have a say in anything. What I’d like to know is … Is this legal that the developer can control all HOA decisions by taking a vote for each undeveloped lot?? Or do they legally have limited votes? Also, I cannot find their corporate filing in Missouri’s bank, so I am wondering if the contracts are even valid anymore.
Sheila,
Missouri doesn’t have any statutes that regulate the relationships between developers and lot owners (other than in condominiums).
A real estate lawyer can probably answer your other questions after reviewing the recorded documents for your subdivision.
In Missouri if an HOA is Administratively Dissolved, can they still enforce covenants ( ie..approve fences , decks, paint color for houses, building plans), if not who has the power?
I had a G I loan on my house iwas asked if i wantd to join the HOA i said no the paper work has no HOA on do i have to belong to theHOA
John,
I can’t give you an answer, because I have not seen the recorded covenants that may apply to your house. Usually HOA membership is mandatory.
Do HOAs need to provide a receipt to home owners every time they pay dues according to by law?
There is no law about this. If you’re not paying by check, you do may need proof of payment. If you have questions about how payments have been applied, you should ask the POA to review your payment history.
I live in a subdivision in St Charles county that has never had an active member HOA since it was formed. The original builders created a HOA and the Articles of Incorporation, Bylaws, and Covenants were recorded with the St. Charles recorder of deeds in 1988. The homeowners never took over the HOA as prescribed by the forming documents. I can also find no record of the HOA corporate entity on the SOS website. I’m assuming that since the original builders were done by the early 90’s and no one took over the HOA, that it would have been administratively dissolved sometime around that time for failure to provide the state with the required annual reports (but there seems to be no record of this). Now some members want to revive the HOA, but is unclear what the process for this would be. Some members simply want to hold a meeting and elect a board of directors, but it seems that it would be more complicated than this if the original HOA corporate entity has been dissolved.
Kirk,
The first step is to figure out what the HOA is responsible for. If there is no common property it is responsible for (gate, pool, clubhouse, etc.), then there may be no great advantage to having an HOA. If there are important responsibilities, then an HOA should be formed, and documents prepared by an attorney by which each lot owner agrees to recognize the new HOA as having the duties specified in the subdivision’s declaration of covenants. It is often impossible to obtain signatures of all lot owners at once, though I have sometimes proceeded with a substantial majority, and tried to pick up dissenters over time.
Thanks for the reply! There is no common areas, just the entrance sign and maybe an 6’X 50′ wide strip of median that is currently maintained by the adjacent homeowners. If I understand you properly, this would involve setting up an entirely new HOA to take on the duties of the old defunct one?
The old HOA doesn’t really exist, if it is not registered with the state and has not been active. Putting together an HOA to take care of a sign and a 300 sq. ft. median is probably not worthwhile, unless you only have 8 or 10 lot owners.
We are trying to register our HOA with the SOS office and receive our Articles of Incorporation. One of the questions they ask is how the assets of the corporation will be distributed upon dissolution. We are not sure how this would apply to a non-profit subdivision HOA. We do have common ground and a pool, but we assess all the residents annually to maintain the common ground and pool. The purchase of a home here automatically carries the use of the grounds and pool. When the resident moves from the subdivision, the use is retained by the lot and the next purchaser.
Does 2/3 majority required before raising due in an HOA? We live in Clay County Liberty MO.
Thank you.
Your HOA’s governing documents (declaration and bylaws) probably provide the answer.
Hi Harry, I have a question that you might be able to answer. My friend is now the owner of a piece of property in a subdivision, which transferred ownership to him. He is the owner of a “common” area, which requires mowing, trash pickup and etc. All of the water from the homes flow into this storm drainage lot. The articles in the covenants and restrictions state that the owner/developer intends to establish a HOA. (that was in 1986) In 2002 a HOA was formed, but nobody was interested, so it was dissolved due to not sending in an annual report, and lack of interest by the home owners.
The covenant states that the Association, developer or any owner shall have the right to enforce all restrictions. Also to collect a fee of $100.00 per year. It also allows for a temporary trustee to collect the assessments. It runs for a term of 20 years, then automatically extends for 10 year periods.
Since no one wants to be a board member or etc., does he have to try to for another HOA? The covenant & restrictions are very specific, so every one knows and keeps the rules.
Since the owner has to pay for mowing and etc., is it legal for him to collect the annual dues, and if necessary put liens on their property? Or does he have to try to form another HOA?
Some people have been paying…some not.
Thanks…
Your friend may be able to find answers by hiring a real estate lawyer in his vicinity who is willing to research the recorded documents and who is familiar with the law on this subject.
Hi Harry,
We have a situation regarding our MO (south KC) HOA, 140 homes, the entire board resigned except one man who’d been recently appointed after a malcontent neighbor filed a legal petition in Jackson County naming a former officer who neglected to have his or her name removed from the State corporate records, in order to force the board to produce records that the plaintiff insists exist and describe large amounts of money (>$30K) in secret accounts. The annual cash flow is in around $5000, not including attorneys’ fees for which $1500 was budgeted.
The now-resigned board members had repeatedly attempted to satisfy her requests for information but the plaintiff would say every single time they didn’t produce the right documents.
Of course anything can happen in court and I presume the board will lawyer-up, and/or will try yet again to produce whatever documents the plaintiff has filed suit to see. I would have done the same thing had I been on the board, which I was not for the main reason I had previously been secretary-treasurer of another smaller HOA and had to put up with asinine behavior of obsessed neighbors for 15 years.
Here’s my question or questions:
Is there any sort of MO law that states HOA members not current on dues may be denied the right to vote or right to benefit from a settlement? Long story short, as of today March 21, only 56 out 140 members are paid up through 2018, since payment is due on MAY 1, 2018 . The malcontent faction insists that there is such a law. I know there is no such by-law or CCR.
What can I do about this? I did consult a local HOA attorney who said there’s not really much I can do as an HOA member until the lawsuit is resolved one way or the other, or if they try to raid the treasury or try to dissolve the HOA.
It really angers me that a couple of neighbors with way too much time on their hands have de facto eliminated most people in their right minds from being interested in serving on the board, in the sense that most people in their right mind wouldn’t knowingly, intentionally set themselves up to be a target of litigation from the plaintiff and colleagues.
What bothers me even more than that is the HOA several years ago had the presence of mind to define a process by which an aggrieved neighbor could have their story heard and appropriate actions be taken to resolve or at least mediate/arbitrate the issue.
There is also of course the option encoded in the by-laws by which dysfunctional board members or officers could be removed (not recalled) and replaced by ordinary petition of 1/5 of households.
But the plaintiff decided to skip all that, probably because the plaintiff is a legal secretary.
Any ideas?
I was called an absolutely horrible person from the current HOA president just because I asked a simple question about the report of 2017 financial report. Also, I don’t think this person is going to show any financial report that I would like to see. I mentioned in the e-mail that I’d like to know what I am paying for each year. Why he is so mad about this?
I don’t know why the person is angry. Often, HOA volunteers become defensive because they spend a lot of time working for the good of their community and feel like they are not appreciated. They are sometimes not critical of the quality of their own volunteer work and resent those who are.
Thank you for your response, Harry! I have a friend living in the next to us in another HOA. Their HOA president sent out emails to members to ask everyone to join the meeting so that he could show the financial report of each year and discuss their HOA budget. Whereas the HOA of my neighborhood is so secretive and defensive when being asked for the financial report, so I asked the president of my HOA if he has anything to hide from the member. Of course, he did not respond to me because he now is playing a victim game. How do I pay my due if I don’t know what I am paying for? There is no transparency here. Please explain to me what I should do in this circumstance. Thank you.
Have you ever heard of a subdivision within a subdivision ? I live in the last section developed in the subdivision ( plat 4) and I guess since the original hoa was dissolved back in 2012 a group of residents that live in the last section decided to create an unincorporated association not registered with SOS and has incomplete records.
They only collect from residents in the last section and have no problem putting liens on property but have problems communicating with homeowners.
In the declarations , which I had to get from Records of Deeds, says that the responsibility of the association is to maintain the roads. Well they do a poor job at that for snow removal by begin inconsistent but they wait til potholes get really big before doing anything, they let grass grow up through the edge of the roads . I’ve patched the holes near my driveway and cleared brush that added about a foot to foot in half more road. What or who could be contacted that can get the association to correctly maintain the roads like they are suppose to?
I have managed to get residents to try to fix the entrance even found an easement deed that clarifies everyone within the entire subdivision is responsible for the maintenance.
Any guidance would be appreciated.
You need to hire an attorney to review all the plats and declarations for your subdivision and the corporate records. There is no substitute for an experienced local real estate attorney’s analysis and advice.