How to Disband Your HOA?

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  • #368976
    wicked_oz
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    How hard would it be to disband a small to medium HOA in California? What are some of the steps we need to take so we can disband it legally and smoothly?

    #368977
    ikirutheowl
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    You should refer to your Declaration. There are usually clauses there that will tell you how to do just that. May I ask why you want to disband your HOA?

    #368978
    altotyler35
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    Ikirutheowl is right. Your CC&R’s should be able to tell you how in detail. You should also consider your common area properties since you need to sell or dispose of them, which is the most challenging part of disbanding.

    #368980
    wicked_oz
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    Thanks for your input!

    Ikirutheowl, the main reason we are disbanding is because we don’t feel that the HOA is necessary anymore. Everyone here just wants to stop being in an HOA so we felt that it was time to disband.

    #368981
    ironman88
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    HOA’s are terrible organizations that just want to bleed you dry of your money. You are right to disband yours.

    My advice is to just follow the dissolution steps outlined in your CCR’s. A lot of HOA’s typically require 100% approval from the homeowners, but this is not always the case. You might also need approval from your mortgage provider since your agreement was probly made when the HOA still existed. You would need to change your contract if the HOA were to dissolve.

    You also need to dispose of your common areas. Your local taxing authority may be able to help you with this. If they assume maintenance for them, it would make your property part of a special taxing district to cover the cost. If you have pools and tennis courts, maybe someone is willing to buy them from the HOA and open them for public use.

    If you have any deed restrictions, you would want to terminate those as well. That way, your neighbors can’t take legal action against you if you go against them. Finally, after paying for all the related dissolution expenses, you will need to distribute association funds.

    This is merely from experience and an understanding of how HOA’s generally work. I’m not an attorney or anything. Just thought that needed to be said.

    #368982
    peggysus
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    We had no problems disbanding ours since our MC did most of the work (even though disbanding meant our MC would be out a client – ha!)

    #368983
    gideon1964
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    Our HOA works a little differently. In our case, the CC&Rs clearly state that homeowners has to re-certify the association thru a written document. That means we all have the option to vote whether or not we would like to stay as an HOA every year. If we didn’t met the minimum vote, then the HOA can’t enforce any rules anymore and would cease to exist for that year. It’s all a bit complicated really.

    #368984
    lolitaQ
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    We are in the process of disbanding our HOA but have run into quite a conundrum. According to the city, we have an agreement with them to maintain the common areas perpetually. We want to disband but we can’t dispose of our common areas because of this “agreement” with the city. If we disband, then the city would have an agreement with an organization that no longer exists, which begs the question, “Who now owns the common areas?”

    Anyway, I hope you get to disband yours, OP. Best of luck.

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