Getting Rid of an HOA
Homeowners wonder if turning over control of retention ponds and eliminating their HOA is a good idea
Q: We recently read a reply you gave to a question about a homeowners association (HOA) in Maryland, that is having trouble getting people to run for the board.
We live in a Chicago suburb and live in a community with 26 single family homes. The town that we live in has told us that we could turn over responsibility for the two retention ponds that we have to the town, and get rid of our HOA. They did mention that this would raise our property taxes, but then we would have no HOA fees.
This is probably harder to do with a townhouse development, but it is just a thought.
A: Thanks for your helpful insights. You bring up a few good points.
Do you still need your HOA?
Your HOA (and the prior reader’s HOA) were created to take care of issues related to the running of your community, including water detention areas. If managing water detention areas is the only duty the HOA has, then transferring responsibility to the local municipality might be a good solution if the local municipality is willing to own, and have sole responsibility for, all detention areas.
You mentioned that the local municipality would agree to do all that and in exchange, would increase the real estate taxes on the homes that are part of the HOA. If you and your neighbors agreed, you could transfer the land to the municipality. They’d pick it up from there.
Getting rid of HOA doesn’t remove issues
Keep in mind, however, water detention and retention areas often serve other purposes for an HOA. In some cases, those areas are the backyards for the homes. In others, they’re well-used play areas when they don’t hold water. As long as the HOA controls those areas, the HOA decides how the land is used, and by whom.
Once the local municipality controls those areas, it can fence them off for safety reasons. They can also restrict how they are used and what the landscaping looks like around it. You may like getting rid of your association. But may not like how the local municipality decides to handle the care for those areas.
Who will take over HOA responsibilities – and at what cost?
As long as that land is owned by the HOA, the HOA must continue to exist. Why? Someone has to be responsible for that land. As the owner, the HOA can buy insurance to cover accidents that may happen on the land. It can also choose landscaping. The HOA can also bill the owners for each owner’s share of the insurance fees and any landscaping costs. You can’t get rid of the HOA by simply having the municipality take care of the detention area unless all of the obligations of the association are gone and undertaken by the municipality.
And here’s a fine point that needs attention: In some HOAs, the detention area is cared for by the association, but the actual detention areas are the backyards of homes. Those backyards are owned by the homeowners and not the HOA. In this instance, it’s easier to pass on the obligation to maintain the detention area because the HOA doesn’t own the land.
Getting rid of HOA in exchange for higher taxes
In your specific situation, trading the HOA costs for an increased tax bill seems like a good deal for your community. Did you take the town up on its offer? Before you do, talk to a local real estate attorney. Bring your HOA documents and have a conversation about all the details and tradeoffs of the plan. Why was the HOA formed? What is its purpose? Here we agree: Having an HOA can be a pain. But cover all bases before you get rid of the HOA.
A real estate attorney can help you navigate through the issues you will face. Just make sure the attorney is knowledgeable about HOA issues.
©2023 by Ilyce Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency. A1613