HOA: Can we shut down our HOA? What can a small community do if no one wants to step up and manage the homeowner association?
Q: We live in a small townhome community of 24 houses in Maryland. We have a homeowner’s association (HOA), and it is generally very mellow, without any crazy restrictions.
Our issue is that we cannot get anyone to be on the board of directors. We currently have a person in the treasurer role. She is happy to send out HOA dues notices, collect the funds, pay for the insurance, etc. She has no interest in further HOA issues, which we understand and are basically fine with.
No one wants to manage the homeowners association (HOA)
We have a vice president who gives 110 percent, but she does not want to take the presidency. My husband and I served for many years as vice presidents and feel we have put our time in. No one else in the community is willing to serve.
If no one wants to serve, what can we do? Can we get rid of the HOA? We have roughly an acre of community property, plus a wastewater retention pond. Otherwise, we have no community playgrounds, parking or elevators. We currently have a homeowner who mows the community property.
HOA management companies need to be managed
We could look for a management company to handle the HOA but we would still need a board to manage them. Any advice you can give would be greatly appreciated.
A: Sam was recently asked the same question concerning an even smaller association in the Chicago area. Here’s a look at how he unpacked the issue for this other association.
Why HOAs exist
A homeowner association’s documents serve various purposes. In many cases, the association’s documents provide for easements to utility companies and municipalities for access and other purposes. Those documents also provide all of the homeowners with a method for collecting assessments and managing the association.
Let’s say you could dissolve the association. Who would pay for the insurance or maintenance over the common areas? If some homeowners elect to pay for the common expenses and others don’t, how would you enforce the payment of association fees? These are just some of the questions you’d face without an association.
HOAs often act like municipalities and manage roads, sidewalks, etc.
In cities, towns, villages and small municipalities, most municipal services are taken care of by the municipality. That municipality also takes care of the roads and sidewalks. Depending on where a homeowners association is located, the association may be responsible for the roads, sidewalks, parks, entrances, common buildings, water detention and retention areas and other common-use elements.
Dissolving an HOA is the wrong move
This is a complicated issue. We can’t simply say to you that you should move forward to dissolve the association. We believe that’s probably the wrong thing to do.
Instead, here are a few alternative ways the association could manage its affairs. And, perhaps, lessen the burden on those people that serve on the board.
Lessen the work of the HOA board members
Some thoughts:
- Stagger meetings and make them less frequent. For starters, how often is the board required to meet? Look at your association documents to see if the board is required to meet monthly, quarterly or yearly. If you can do what you need in one or two meetings per year, more people might be willing to participate. That would lighten the burden of managing necessary chores considerably.
- Consider billing your association dues either quarterly, semi-annually or annually. If you bill everybody once, twice or four times per year, collecting dues and managing the books will be easier. Some smaller community associations like yours may only bill each home $100 or $200 per year. If you are currently billing everybody $20 per month but the unit owners are willing to pay $120 twice per year, or even one $240 check, that could help lighten the workload.
- Can you simplify tasks? If you do, perhaps other owners will become involved and the entire community will benefit. Hiring a management company won’t solve anything. As you point out, you’ll then need to manage them.
You should call an owners’ meeting. Serve cake, coffee or something stronger. See if you can get everybody together to work this out. A regular quarterly barbeque might allow everyone enough time to manage the affairs of the association and build community.
We hope this helps. Let us know how it goes.
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