Real Estate & Property Law

TERMINATING AN HOA IN CALIFORNIA, HOW HARD IS IT?

Many people ask about terminating an HOA. Often, it's because the owner is tired of the Board, or upset with what the Board is doing, but they do not want the job.

Newsflash! If there is no HOA board then there are likely to be problems in getting the money needed to maintain the property that is owned in common or by the HOA, which caused the development to be set up as a "common interest development" in the first place.

In California, as long as the HOA has maintenance obligations to the members, it usually takes 100% approval to terminate the HOA, so if there are 4 owners, that is a lot different than trying to convince 100 owners to say yes. It is possible there might be a particular process within the governing documents for termination that might supersede the Nonprofit Mutual Benefit Corporations Code that requires 100%. In any event, if there is common area that is maintained by the HOA, it is very hard to terminate, and probably not very wise, unless the owners can agree on a reasonable means of making sure all contribute to maintaining the common area or there is some way to split it up by agreement. In a condo, it would involve setting up some other scheme whereby owners would own the buildings as tenants in common and the question is: if you take away the rights to collect assessments for an HOA, what are you going to do to make sure you have enough protection without the HOA to collect everyone's fair share to maintain the building.

So, it can by done, but it won't work very well in most CID situations.

Full post as published by California Condo & HOA Law on December 28, 2008 (boomark / email).