Question: I live in a small homeowners’ association which does not have any amenities or common areas such as a community pool or park. The association only maintains a small landscaped area at the entrance of our community and each owner maintains their lot and home. It seems like a waste of time and money to continue to operate the homeowners’ association. What would be involved in terminating or abolishing the association? R.B. (via e-mail)
Answer: Even for associations that have limited or no common property, a homeowners’ association is still often the most efficient means of ensuring that the covenants regulating the scheme of development are enforced as to issues such as single family residential use requirements, regulations on the types of structures that can be built, and the like. However, the association could be dissolved and that would not necessarily negate individual enforcement rights of the lot owners.
Also, many HOA’s are required to exist as a result of governmental regulation for surface water drainage management purposes, and cannot be dissolved unless alternative arrangements are made to comply with applicable water management regulations.
Assuming these issues can be overcome, the process for terminating the covenants and dissolving the association could be rather involved. The first step would be to review the association’s governing documents to see if they contain a provision concerning the termination of the covenants or the dissolution of the association. If the governing documents are silent, a vote to terminate the association would likely require approval of all lot owners, as well as all record owners of liens, such as mortgages, upon the lots. Such approval may be difficult to obtain for obvious reasons.
It may also be relevant to your question to consider Chapter 712 of the Florida Statutes, the Marketable Record Title Act. This law requires that a homeowners’ association take affirmative steps to preserve the recorded governing documents or the documents may be extinguished by the operation of law. Typically the association must take the steps to preserve the documents before the 30th anniversary from when the documents were recorded or when the lots were first sold.