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First, I have contacted about a dozen lawyers in the area and none are interested in HOAs. I am still looking, but I have a question.
As the title states, the Declarant (local bank) has sold all lots and stated they will no longer pay property tax on the common greenspace. He is willing to transfer it to our HOA, but we don't have one.
Based on the Declaration and the GA Property Owners Association Act, the Declarant retains the right to appoint or remove board members and officers until 1) two years after the final lot is sold or 2) the Declarant surrenders authority to the HOA board.
The GA Property Owners Association Act states this:
(b) Prior to the first conveyance of a property owners association lot, the declarant shall cause the first board directors to be duly appointed, the officers to be elected, and the organization of the association to be effectuated.
Could someone expand on the meaning of the bolded sentence?
Sounds like the bank needs to appoint the board have the board form the HOA entity and then convey the common areas to the HOA. Can't convey property to an entity that doesn't exist yet.
(b) Prior to the first conveyance of a property owners association lot, the declarant shall cause the first board directors to be duly appointed, the officers to be elected, and the organization of the association to be effectuated.
Prior to the declarant turning over our HOA to us and holding an election for homeowners to hold positions, the declarant was simply the holder of ALL positions such as board, officers, etc.
So, you don't yet have an HOA.
What is preventing you from working with the bank to create one?
While "Declarant reserves the right," they can also waive that right, right?
Have you asked them to waive the right and to allow the owners to form an association?
So, you don't yet have an HOA.
What is preventing you from working with the bank to create one?
While "Declarant reserves the right," they can also waive that right, right?
Have you asked them to waive the right and to allow the owners to form an association?
I need to correct part of my original post. The GA Property Owners Association Act does not apply to us. I very poorly worded sentence in an article led me down that rabbit hole.
We ran into an issue last year where the Declarant failed to enforce the covenants. The neighborhood held a meeting and ultimately requested that the Declarant appoint the board and/or transfer board authority to use. The Declarant initially agreed but because they held onto 4 of 36 lots and those lots were deemed hard to sell, they had a change of heart and decided to maintain sole control.
I've sent the Declarant a letter requested that they 1) establish the HOA and transfer authority in accordance to the Declaration or 2) delegate that authority to us to do so.
Now, I am awaiting the response. I think I have a lead on an attorney as well.
My fear is that the Declarant will delegate authority to one builder that still owns 7 lots. The builder is a nice guy but he is the person that gave permission to a buyer of his home to build the unapproved fence (despite not having authority to do so). He is not in support of an HOA.
So the bank sold all the lots and now has land left over they no longer wish to pay property taxes on.
They can't convey the land to the HOA as there is no HOA.
What about conveying it to the township?
Our township has the title to all sorts of land -- medians, centers of roundabouts, corners with utility boxes, green space in general.
I've inquired about that. The county does not want it. The tax commissioner stated that if taxes are not paid, it will be sold. However, I confirmed this morning that anyone can pay the tax so that is not an issue. We still need to get it under our control as the bank has not exactly been trustworthy.
You point to a statute that purports to mandate the creation of the HOA before the sale of a lot that would be burdened by an HOA. What is the "remedy" if this does not occur? I understand you've decided the statute does not apply anyway but you should always consider what the relief or remedy is when a statute "mandates" or purports to require something. It's illusory when there is no relief that can be granted for failure to comply.
If there is no HOA then the Declaration could not have burdened your lot with a lien for the benefit of the HOA corporation. The prior owner could not have imposed a lien to secure payment to an entity that did not exist. Hooray! Why would you prefer otherwise?
The exact language of the restrictive covenants needs to be examined. Sometimes the restrictive covenants generically refer to an "association" without mentioning whether it is an incorporated.
Last edited by IC_deLight; 06-28-2018 at 03:50 PM..
You point to a statute that purports to mandate the creation of the HOA before the sale of a lot that would be burdened by an HOA. What is the "remedy" if this does not occur? I understand you've decided the statute does not apply anyway but you should always consider what the relief or remedy is when a statute "mandates" or purports to require something. It's illusory when there is no relief that can be granted for failure to comply.
If there is no HOA then the Declaration could not have burdened your lot with a lien for the benefit of the HOA corporation. The prior owner could not have imposed a lien to secure payment to an entity that did not exist. Hooray! Why would you prefer otherwise?
The exact language of the restrictive covenants needs to be examined. Sometimes the restrictive covenants generically refer to an "association" without mentioning whether it is an incorporated.
Our issue is that if there is no HOA, there is no entity to transfer the 7 acre greenspace that runs behind half our homes to. The residents that built on this street did so in part because the greenspace appealed to us. We want to retain it and eventually maintain a small park with picnic and camping area. We do not want it sold to the highest bidder in a tax auction to be rezoned and developed.
Additionally, the overwhelming majority of residents want an HOA, including me.
Our issue is that if there is no HOA, there is no entity to transfer the 7 acre greenspace that runs behind half our homes to. The residents that built on this street did so in part because the greenspace appealed to us. We want to retain it and eventually maintain a small park with picnic and camping area. We do not want it sold to the highest bidder in a tax auction to be rezoned and developed.
Additionally, the overwhelming majority of residents want an HOA, including me.
1. Is there an obligation for the 7 acres to be part of the subdivision? Did the restrictive covenants provide that the declarant could withdraw land from the CCRs if it wanted to? If so then there was no reason to expect there to be a 7 acre green space to an HOA.
2. Did the local government require the acreage as part of the approval process for the subdivision? If not then on what basis do you believe the 7 acres must remain as green space or otherwise remain as part of the subdivision?
3. There is no upside to an HOA.
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