Inforcing CC&R'S (rentals, houses, neighborhood)

[IWTT]

Carlyee3 and Cully,

Thank you for the information and some direction. My understanding is that in the past the area tried to start a HOA and get away from the CC&R but when it came time to actually get it done, whoever attempted it didn't have all of their "ducks in a row" and it got shot down by the courts.

Truthfully, I think the residents except of few of us just don't care anymore. They pay it and leave it at that. Probably most pay the whole year in advance because you only have to pay for 11 months worth of fees.

I will look into these things that were mentioned. I will re-read the CC&R's and see if indeed there is a yearly meeting with accountability of the fees.

Thanks again
IWTT

[cully]

Even if the cc&rs say these things...but they have let the corporation lapse...the board needs to provide some sort of proof as to why they can handle money belonging to a group.

[whirnot]

Here is where you truly find accurate information: ORS 94.630 - Powers of association - 2013 Oregon Revised Statutes

[Carlyee3]

Originally Posted by IWTT

Carlyee3 and Cully,

Thank you for the information and some direction. My understanding is that in the past the area tried to start a HOA and get away from the CC&R but when it came time to actually get it done, whoever attempted it didn't have all of their "ducks in a row" and it got shot down by the courts.

Truthfully, I think the residents except of few of us just don't care anymore. They pay it and leave it at that. Probably most pay the whole year in advance because you only have to pay for 11 months worth of fees.

I will look into these things that were mentioned. I will re-read the CC&R's and see if indeed there is a yearly meeting with accountability of the fees.

Thanks again
IWTT

It sounds like you have an HOA if you are being required to pay dues. CCRs and HOA are not exclusive as you appear to think. There are HOAs who have CCRS and Bylaws to manage and regulate the subdivision. There are subs that have CCRs, but NO HOA. If there is no HOA, I don't see how there can be dues, since there is no Board to manage the financial obligations and affairs or collect the money.

Another thing you might look up is the matter of major maintenance in the Sub. For example, in our Sub (in Bend, BTW), we were responsible for maintaining the streets, not only periodic seal coats, but eventually repaving. Now imagine needing over 100K$ to do a repave. If that money, which should be part of the dues, is not accrued in a dedicated reserve account, then the Board is not doing a legal job of managing the HOA. And the members should be aware of where that money is kept. Is embezzling occurring? BTW, most HOA Boards are limited in the $ amount for assessments above and beyond the dues. So if they haven't accrued the Reserve funds for the repaving, the entire Subd. is in a world of hurt. For Condo HOAs, the reserve funds can be in the millions.

If you aren't getting any value from your dues and the Board is not meeting it's fiduciary duties and obligations, I would not pay either.

Best to you

[cully]

IWITT, I spoke with a friend who says Oregon HOAs that are not condominiums need to be incorporated before conveyance of the first lot, same as when the declaration and bylaws would be recorded...according to the Oregon Planned Community Act. Here is the law on that. Note the very beginning where it states this. I haven't read through the entire Act to see where it says anything about a lapsed corporation:

ORS 94.625 - Formation of homeowners association - 2013 Oregon Revised Statutes


This is the longer version of the Act: ORS Chapter 94 - Real Property Development - 2013 Oregon Revised Statutes

An unincorporated HOA generally cannot hold title to real estate, generally cannot get proper insurance, cannot maintain collection lawsuits in its name, and cannot protect its officers from personal liability. If there is any common property owned by the association, the association must be a legal entity to hold the title to it. As a corporation, your/all residents' liability is limited.

In my own life, I am not so concerned about reasonable HOA laws that make things go well for all. The concern comes in regarding finances. Areas I am familiar with group finances outside of some small clubs need to handled by a corporation or LLC of some sort. Giving money regularly to a group not incorporated, included giving any larger special assessments, trusting a president to make business deals, financial payouts can be very dangerous.

[Carlyee3]

Cully is correct on all counts. The HOA , if there is one, is set up at the formation of the sub. Until a critical number of lots are sold, the developer often holds all the power in the HOA, since he owns all the lots until the critical number (as defined in the bylaws), are sold. Then the HOA is transferred to the control of the elected Board of Directors.

It amazes me how little members of the HOA usually know about the HOA ops, even when a lot of money in operational dues and reserve funds are involved. Embezzlement can be a real possibility when no oversight is present and the Board is not honest.

[cully]

Here's an article on incorporating the HOA and the law in OR:

Why Incorporate Your Association? - Vial Fotheringham LLP Lawyers

[cully]

Moderator cut: snip

Basically, you can start out being firm with the info you will find...and better to present official facts than what the general public thinks, although that is significant and supportive too.

In the end, you may need an attorney.

[IWTT]

Moderator cut: snip

So I will ask this in a different way. If an HOA is inactive, they can still collect money as an HOA? Not use the money for the benefit of all but only for a leased side of the area, using the reason as upkeep of a pool and a club house? Of course all get a key to the pool, but I think it would be best to give the people in the area the option to opt out. Don't give a key unless you want to use the facilities and then get charged a fee for the use. IMHO, that's all this is. I might as well say I am joining the community pool as a member and pay my dues to use it.

But then if my information I received recently is correct, this may not matter anymore in the very near future. And if we continue to increase in home value and building in the area continues as it did before the bubble burst, I bet the investors in the area, not the land owned as in my area will do like others intent was to do and that is to tear it all down and build homes.

[cully]

Originally Posted by IWTT

:>( Ok, apparently I broke the rules. I apologize.

So I will ask this in a different way. If an HOA is inactive, they can still collect money as an HOA? Not use the money for the benefit of all but only for a leased side of the area, using the reason as upkeep of a pool and a club house? Of course all get a key to the pool, but I think it would be best to give the people in the area the option to opt out. Don't give a key unless you want to use the facilities and then get charged a fee for the use. IMHO, that's all this is. I might as well say I am joining the community pool as a member and pay my dues to use it.

But then if my information I received recently is correct, this may not matter anymore in the very near future. And if we continue to increase in home value and building in the area continues as it did before the bubble burst, I bet the investors in the area, not the land owned as in my area will do like others intent was to do and that is to tear it all down and build homes.

There are a couple of ways to be inactive. One is just a hands off attitude, board dissolved. With that going on there would usually be the other kind of inactive. That is, the corporation being allowed to lapse to the point of being purged from the system.

In areas I'm familiar with in order to handle others people's money and in order to take care of other peoples' jointly owned or shares, one must be the designated officer of a corporation.

Corporations can collect funds, order repairs, order maintenance, order new things...essentially buy...and disburse funds.

Corporations have boards. Board members need to be protected from suits and not allowed to be sued individually when something goes wrong so corporation status protects from that.

Corporations need to file paperwork with the state attorney's office. They need officers. They pay a fee for that. They do some paperwork and pay a fee annually.

These are the areas I'm familiar with.

I do know areas where HOAs are required to incorporate. And others where it's a choice.

I think in the links here you see where you are regarding that.

You do need to have an attorney to fine tune at least at first. A few questions to know if you need to proceed. Like can the guy collecting your money actually do so legally? The rights of whoever collects and orders and disburses funds is a big key.

If the answer is no....that sets a lot of other things in motion.

Keep us posted.