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What property owners is my point? Many are long gone and the (now) $175 a quarter we charge goes towards the common amenities. What would happen is we would ha
by firesteelrain 1y ago
What property owners is my point? Many are long gone and the (now) $175 a quarter we charge goes towards the common amenities.
What would happen is we would have to surrender those funds to the State.
So this would lead to a huge windfall for the State.
States have rules for what happens when a HOA dissolves. That means the money goes right to the State including the sale of the common property.
- RandomBacon 1y agoWho are you charging $175?
- firesteelrain 1y agoExisting, current homeowners every quarter
- dgrin91 1y agoI think what GP is saying is that if I was a homeowner for 30 years, paid HOA fees all those years, then last year sold to someone else, who gets the HOA reimbursement then? I paid thousands over years and would presumably get nothing, while some other guy who just moved in all of a sudden gets a big check? That seems unfair.
- Ekaros 1y agoWell any funds in HOA is part of the property. Could have reported it when selling and increase price correspondingly or at least some fraction.
- dgrin91 1y agoHoa funds practically never get redistributed back to owners. I've never heard of such a case. We are only talking about it here because a legislature is talking about changing something state wide (and realistically this won't happen anyways). So there is no realistic scenario where hoa reserves factor into home price
- wat10000 1y agoReserves are money available for HOA expenses which would otherwise require new money from the owners. For that to factor into home prices, you just need buyers and sellers to be aware of this and what it means for their wallet in the future. Which may not be the norm since people are often clueless, but it doesn't seem completely absurd.
- firesteelrain 1y agoWhat you are saying is not typically in HOA governing documents nor State law so law would have to be changed and / or governing docs updated which would take a majority vote by all homeowners (60% in some cases per State law)
- deleted 1y ago[deleted]
- beAbU 1y agoWhere I'm from we call a HOA a body corporate, and every home owner in the scheme has a % ownership in the BC. The title deed includes the ownership share. So if the house ownership is transferred, so is the share in the BC. Size of the share is determined usually by the dwelling floor area divided by the sum total of all dwellings in the scheme. So if you sell your house after decades of contributions, and then the BC is dissolved, then too bad, you sold your share in a going concern and lost your say in it's affairs. Arguably you benefitted from the contributions from someone who came before you, and now someone will benefit from yours.
- BobaFloutist 1y agoI would assume the sale price of your property would be higher if it's part of a well managed HOA with 500k in reserves than if it's part of a dysfunctional, insolvent HOA, so the previous property owner kinda already got paid out for their contributions. It's like selling shares of a company with significant cash reserves before/after they choose to liquidate a chunk of them into dividends or stock buy-backs, I would hope you priced the shares accordingly and have nothing to be mad about.
- firesteelrain 1y agoUnfortunately when a home is appraised, the solvency of the HOA is not allowed to be taken into account
- RandomBacon 1y agoAppraised for the mortgage company? The potential buyer can still inquire and factor that in, right?
- firesteelrain 1y agoNo, it’s not public information
- wat10000 1y agoImagine you dissolve a company that has a lot of money in the bank. What do you do with that money? Distributing it to the shareholders seems like the right way to dispose of it. What if somebody sold all their shares a day before? Well, they get nothing, that's how it works. The company's money should be accounted for in the share price, so it all works out, there's nothing unfair. An HOA is no different. All the owners are also owners of the HOA. When you buy a place in the HOA you also buy into the HOA, and when you sell you also sell your interest in the HOA.
- firesteelrain 1y agoExcept the HOA governing docs say the money goes to the State and it’s expected that the State provides the same amenities and services that the HOA was providing. If State doesn’t then a non profit corporation is formed that does
- Bender 1y agoI would guess it will vary by state laws. How about a force liquidation of all tenants in common properties and any other joint properties to pay off the HOA debts and disband the HOA's. Maybe even treat it much like a chapter 11 bankruptcy / reorg? Or get investors to pick up properties? There must be cases of HOA's being force disbanded / dissolved in the past to use as a template. I think it's just a majority vote from home owners and submission of articles of dissolution? If enough properties could be liquidated then a good incentive could be giving home owners back a few years of dues. As a bonus all the over-zealous rules that have grown over the decades get dissolved and people just default to county and state laws.
- firesteelrain 1y agoFlorida law says what to do when dissolving HOa and how to do it
- gwbas1c 1y agoYou pay the current owners as of the date of dissolution. The current owners bought into the HOA from the past owners, and thus assume future liabilities (or profits) from the HOA. Edit: If/when it becomes known that there will be some kind of a payout, people selling their homes will need to adjust the price and/or expect some kind of credit from the buyer at closing.
- firesteelrain 1y agoI actually went and looked at our governing docs. It says money goes back into the public coffers. Of course law can be changed
- gwbas1c 1y agoYour governing docs are not law. I would hold a vote to change those ASAP.
- firesteelrain 1y agoYou need a majority of the members to want to do it. All have to respond to the ballot. Past experience is that the members generally don’t vote even at the annual meeting.
- gwbas1c 1y agoThat's because are so mind-numbingly dumb that no one is going to show up for an annual meeting unless there's actually something important to vote on. Saying, "hey, show up and vote and you might actually get some money from it," will make people show up.
- firesteelrain 1y agoAgain, they won’t get money if the HOA is terminated or dissolved. Governing docs say it goes to the State. It is very common.
- jjav 1y ago> What property owners is my point? Many are long gone This statement makes no sense. The property owners are the ones who own the properties, today. It is very clear cut who they are, it's even public record.
- firesteelrain 1y agoIt does make sense. I am saying that past property owners contributed money and expected the HOA to exist virtually forever. New / current expected the same.
- jjav 1y agoPast owners are completely irrelevant, they have no claim or say in the property.