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Category Archives: homeowner association

Missouri governor signs HB1103, giving courts power to order maintenance of “private roads”

Posted on July 25, 2012 by Harry Styron

The Missouri General Assembly enacted HB 1103 in the past 2012 regular session, which explicitly grants circuit court judges the authority to impose financial responsibility for maintenance of certain “private roads” onto parcels of real estate that benefit from these roads. Governor Nixon signed the bill into law on July 12, 2012.

There are many problems with rural roads in Missouri. Simple questions–such as determining who owns the road, whether it is a subject to property taxes, who has the right to use it, and who is obligated to pay for its maintenance–are often impossible to answer.

HB 1103′s provisions regarding private road maintenance change section 228.368 RSMo and add three new sections to Chapter 228 of the Revised Statutes of Missouri. This legislation is an attempt to solve the problem of nobody stepping forward to pay for road maintenance in situations in which no provision was made when the road was created. But its definition of “private road” greatly limits its applicability.

According to the new section 228.341, a “private road” means “any private road established under this chapter or any easement of access, regardless of who created, which provides a means of ingress and egress by motor vehicle for any owner or owners of residences from such homes to a public road. A public road does not include any road owned by the United States or any agency or instrumentality thereof, or the state of Missouri, or any county, municipality, political subdivision, special district, instrumentality, or agency of the state of Missouri.” Got that?

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Posted in agriculture, homeowner association, Missouri, Missouri economy, Missouri law, Ozarks, Ozarks economy and tagged , , , . Bookmark the permalink.

HOA needs to get the owner’s name right to collect assessments

Posted on January 20, 2012 by Harry Styron

Whenever a homeowner association (HOA) gives me an account for collection, the first thing I do is verify the name in which the lot or unit is held. Frequently, the books of the HOA show owner as an individual or couple, often with a nickname.

Failure to keep track of the name in which property is held can defeat a claim for assessments, as shown in River Oaks Homes Association v. Lounce, a case that originated in Jackson County, Missouri.

The HOA obtained a judgment against Zeria Lounce, individually and as trustee of her living trust, for several years’ worth of delinquent assessments. Lounce appealed to the Western District of the Missouri Court of Appeals, claiming that the trial court erred in finding her personally liable and in finding the trust liable.

The River Oaks covenants provided that assessments were secured by a lien against the lot assessed and were also a personal obligation of  ”the person who was the Owner of such property at the time when the assessment fell due.” Fifteen months after purchasing her townhouse in River Oaks in 1993, Lounce conveyed it to her living trust, with herself as trustee.

Nobody paid the assessments after 2004, and the HOA sued Lounce in her individual capacity. After filing suit, the HOA discovered that Lounce had put the property in the name of her trust and added Lounce, as trustee, as a defendant in the suit. Because the covenant provided for the personal liability of the Owner only, the court of appeals reversed the judgment against Lounce, as an individual.

The court of appeals didn’t let the trust off the hook, stating that the payment obligation ran with the ownership of the property, regardless of whether the HOA was aware of the change in ownership.

Here are the lessons for associations:

  • Pay attention to the county records of ownership. The county assessors’ websites (in most counties in Missouri) are a fairly reliable place to look for the names in which property is held; the recorder’s office is the best authority, though not always the most accessible online. This is important for making sure the proper parties are casting votes in elections, as well as for collections.
  • Ask your collection agency or lawyer to confirm the owners’ identities when preparing liens, sending demand letters and filing collection suits.

Carelessness about ownership can result in the loss of the ability to collect, shifting the burdens to the paying members of the HOA.

 

 

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Invest now in vacation property!

Posted on June 12, 2011 by Harry Styron

In preparing for a short talk about how to convey various kinds of vacation real estate, I arrived at the unbrilliant conclusion that people make decisions to buy vacation real estate (RV lots, lake houses, timeshares) based on what they think they want at the time of purchase, with some attention, but not enough attention, to the future. A short version of my presentation is posted here.

Many decisions to purchase vacation property are made when buyers are in a state of vacation bliss, a kind of wistfulness, that makes them less critical than when they’re on their home turf. They hope the vacation property will be a place of togetherness for family and close friends, where memories are created. Perhaps it will become a retirement home, where the grandchildren will want to visit. The sales techniques for vacation property are addressed squarely at those sentiments.

Many of those good things do happen. But vacation properties have the same drawback as all real estate investments: real estate is immobile. If you must to sell it quickly, the price must be low. You probably can’t sell it yourself, because you’re not there.

Ownership of most objects becomes undesirable. Our family situations change. Rising fortunes suggest that we should upgrade. Declining fortunes require that we sell. Seclusion that initially provided peace now brings feelings of loneliness. Or seclusion is ruined by the tasteless vacation home just built next door. The only time available to be at the vacation property is consumed with mowing and repairs.

Now is a great time to buy, because many owners need to sell. Get some advice about your purchase from people who aren’t going to make a commission if the sale goes through, whom you can confide in about your needs.

The advisors you need when considering purchasing vacation property should be able to advise you on such topics as:

  • the history of the project (subdivision, resort, condominium), including the reputation of its developer
  • subdivision restrictions and plats
  • maintenance fees
  • responsibility for road maintenance
  • recreational amenities
  • water and sewer systems
  • lake or river access
  • police and fire protection
  • homeowner association status and activities
  • distance to medical facilities
  • resale opportunities
  • nearby employment opportunities

The information that you need probably isn’t available from just one person. Take your time in making a decision. Don’t sign anything while you’re in the wistful state.

 

 

 

 

 

 

 

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Posted in Branson, Branson-Missouri, condominiums, economic development, homeowner association, Missouri, Missouri economy, Missouri law, ozark, Ozarks, Ozarks economy, table rock and tagged , . Bookmark the permalink.

Missouri Supreme Court throws a lifeline to an HOA

Posted on April 20, 2011 by Harry Styron

If a homeowner association doesn’t have the power to impose liens to collect delinquent assessments for common expenses, the HOA is unable to perform its responsibilities. Often, no other entity has the legal authority to fill the gap in insuring, maintaining, repairing and replacing common properties such as streets, water and sewer facilities, clubhouses and pools, etc., which were the responsibility of the original HOA.

Many Missouri HOAs are dissolved by operation of law, having failed to file annual reports with the Missouri Secretary of State. Often a new HOA is formed, but a series of Missouri court decisions have made clear that the new HOAs lack any authority to perform the functions of the old HOA, unless there is an assignment of the old HOA’s powers to the new entity. I’ve summarized those court opinions here, including an update on Debaliviere Place Association v. Steven Veal, in which the Missouri Supreme Court reviewed a lower appellate court decision on April 12, 2011, changing the result and remanding the case for a new trial.

The Missouri Supreme Court’s opinion, written by Judge Michael A. Wolff, clarifies that a defunct HOA, even though it has been dissolved for more than 10 years, still has the power to assign its rights to collect assessments, impose liens and enforce covenants. This new opinion overruled a court of appeals opinion that had indicated that a defunct corporate HOA was a non-entity after it had been dissolved for 10 years, lacking the power to do anything. This new opinion is based on Missouri’s statute 355.691, which allows a dissolved non-profit corporation to “wind up and liquidate its affairs,” transferring its assets and liabilities.

Judge Wolff’s analysis limited the effect of a now repealed Missouri statute (section 355.507), which prohibited any non-profit corporation from coming back to life after it had been dissolved for at least 10 years, at which time its corporate charter is permanently forfeited. Even though the 10-year limit has been repealed, it still applies to many HOAs that had been dissolved before its repeal.

For new HOAs which need to establish their authority, the recording in the county land records of an assignment from the old HOA to the new HOA of the old HOAs powers will be effective, unless the objecting owner can prove that the assignment is made without authority, an a contention that Veal did not assert against Debaliviere.

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The defunct HOA problem continues in Missouri, legislation needed urgently

Posted on June 23, 2010 by Harry Styron

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 Read the rest of this entry →

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Posted in condominiums, economic development, homeowner association, Missouri, Missouri economy, Missouri law, Ozarks, Ozarks economy, real estate development, real estate law and tagged , , , , . Bookmark the permalink.

It’s time: HOA budgets for 2010

Posted on October 25, 2009 by Harry Styron

Homeowner associations (HOAs) generally have fiscal years that correspond to calendar years, which means that it’s time for HOA boards to begin work on their 2010 budgets, so that the new budget–which establishes the HOA board’s authority to collect assessments and spend money–is in place before the start of 2010.

Missouri HOAs, other than condominium owners associations (COAs), don’t have any special statutes to follow. Instead, they are governed by corporation statutes and by their recorded covenants and by their bylaws, which are often not recorded.

Here’s an overview of the sources of general and financial powers of HOAs and COAs: Read the rest of this entry →

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Posted in condominiums, homeowner association, Missouri, Missouri economy, Missouri law, real estate law and tagged . Bookmark the permalink.

Missouri PSC asserts jurisdiction over one tiny utility company, but many others escape

Posted on June 24, 2009 by Harry Styron

Water and sewer services to residences and businesses are essential. Most of us take for granted that the operations of those who provide these services are reliable and are regulated. In reality, many water and sewer providers fall through several holes in Missouri’s statutory framework of regulation by the Missouri Department of Natural Resources (DNR) and the Missouri Public Service Commission (PSC).

DNR’s regulations

DNR sets engineering standards for water wells, treatment and storage facilities, and distribution systems (mains and valves). DNR licenses well drillers and maintains a registry describing each water well, based on data required to be submitted by well drillers. DNR does not regulate rates charged by water sellers, but does require that permanent entity (called a “continuing authority”) be established for each water system serving more than 15 users. A continuing authority for water is required to show DNR that it has the technical, managerial and financial capacity to operate the system, or at least that’s what the rules say. DNR implements its regulations by requiring submittal of engineering plans for the issuance of construction permits and certfications from private engineers that water and sewer facilities are completed according to the approved plans before issuance of operating and discharge permits. DNR also licenses operators of water and sewer facilities. Read the rest of this entry →

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Posted in economic development, homeowner association, Missouri, Missouri economy, Missouri law, Ozarks, Ozarks economy, real estate development, real estate law and tagged , , , , . Bookmark the permalink.

SB 230: The Uniform Planned Communities Act

Posted on March 24, 2009 by Harry Styron

Today, I’ll travel to Jefferson City to testify before a Senate committee in favor of the Uniform Planned Communities Act, which is Senate Bill 230, sponsored by Sen. Joan Bray.

I have testified in support of the UPCA at two or three times previously. I’m not a lobbyist, and I testify for myself at my own expense, taking off work to do so. Here’s why: Read the rest of this entry →

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Posted in condominiums, homeowner association, Missouri, Missouri law, Ozarks, Ozarks economy, real estate development and tagged , , . Bookmark the permalink.

Styron & Shilling’s HOA database project

Posted on February 18, 2009 by Harry Styron

Suppose you are buying a home in a subdivision. You don’t see many occupied houses in the subdivision, which is not in a city or town. But you see a water wellhouse and storage tank and maybe an odd looking structure that must be a sewer treatment plant or pumping station. You don’t see any signs indicating that these belong to a local government entity. You wonder who maintains the streets, the water system and the sewer system. The answer is that a homeowners’ association (HOA) is responsible for maintenance and operation of these essential facilities.

But where is the HOA?  You can’t find it in the phone book or on the internet. The public records are sketchy. Read the rest of this entry →

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Posted in Branson, condominiums, homeowner association, Missouri, Ozarks, Ozarks economy, real estate development, real estate law and tagged , , , , , , , , , , . Bookmark the permalink.

HOA trustees can enforce covenants, even though they didn’t have annual meetings

Posted on February 11, 2009 by Harry Styron

If you want to stop a homeowners association from collecting assessments or enforcing restrictions, often the best tactic is to smear the HOA.

Here’s how the smear works. Read the rest of this entry →

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Posted in homeowner association, Missouri law, Ozarks economy, real estate development, real estate law and tagged , , , , , , . Bookmark the permalink.
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