Terminating a Homeowners Association
Technically, yes, but practically, it is impractical due to the difficulty. Most homeowners have not given legal or practical considerations any thought when it comes to terminating a homeowners association (“HOA”). Therefore, as was covered in this article, homeowners should exercise caution before attempting to dissolve their HOA and speak with a lawyer.
HOAs are mutually beneficial, non-profit corporations in California. The HOA is the organization legally responsible for overseeing the common interest development and upholding its governing documents. An HOA may be dissolved, just like any other corporation. However, as was covered in this article, the common interest development will still exist and the Declaration of Covenants, Conditions, and Restrictions (“CC&Rs”) will still be in effect even if the legal entity managing it is dissolved.
When homeowners first buy lots in the development, the purchase of the lot transmits an interest in the common areas or membership in the association, creating a common interest development, provided that each of the following has been documented: A final map or parcel map, a condominium plan, if any, and the CC&Rs are all examples of documentation. Civil Code Section 4200
Each lot and parcel of land within the common interest development is subject to “covenants,” “conditions,” and “restrictions” (as the name implies) through recorded equitable servitudes known as CC&Rs. Civil Code Section 4250 A recorded obligation or encumbrance known as an “equitable servitude” is one that attaches to a specific parcel of property and “runs with the land” to the detriment or advantage of each succeeding owner. To put it another way, a homeowner who buys a house or a lot in a common interest development consents to be bound by the CC&Rs’ descriptions of the debts and liens registered against that house or lot. Every prospective buyer is aware of the CC&Rs and has a chance to evaluate them before making a purchase thanks to the procedure of recording them with the county recorder.
Therefore, the common interest development that was managed by the HOA and the CC&Rs recorded on the development’s lots will still exist even if the HOA as a legal entity is disbanded. If there is no longer a HOA to oversee the complex, these continued duties and encumbrances may provide practical issues for the residents inside the common interest development.
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