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Dissolve HOA

I live in a small condo community in northern Arizona that consists of a series of duplexes. There is a community alley to access the garages for each individual unit along with a parking space for each unit. Each condo has a front yard and fenced backyard. Each unit is responsible for landscaping and maintenance of the front yards and backyards.

Our HOA fees are pretty low. The HOA pays for liability insurance and drainage and snow removal. Period. We have not had a meeting for at least three years.

My question is how difficult would it be to dissolve the HOA? What would happen to the community alley? Would the front and back yards become property of each individual homeowner or would we have to purchase the yards from whoever owns it? Who would plow the rare snow when needed?

1 Response

  1. Dennis Legere

    Elle;

    Good question. Every set of CC&R’s contain provision for dissolving the association and to lift all covenants and restriction on the units. You mentioned that you are in a condo. As a condo the association owns no part of the property. the unit owners own it all, either individually (for their specific unit) or collectively for all common property. Your CC&R’s again would precisely define what is individually owned property and what is common property. While you maintain your individual yards front and back they may not actually belong to you individually.

    Arizona Laws has a section specifically focused on the termination of Condominiums. The section is ARS 33-1228. We’ve made some significant progress in improving that particular statute in the last two years, it is still not where it needs to be but it is significantly better. As you alluded to the greatest issue in dissolving a condominium association is how to deal with the common property. You will definitely need to consult an attorney on how best to deal with the common property. The easy part is the community vote to dissolve the condominium association and the CC&R’s, call for the vote and if you get the required number of owners to agree with the action to dissolve the association it is done. The hard part is how to equitably deal with the ownership and maintenance of the common property. You will definitely need to consult with an attorney on how best to achieve the results that you want relative to either assignment or long term maintenance of common property.

    For example most likely the walls and roof of your existing units are currently defined as common property. You could simply reassign that property to the current unit owners and deed that property to them individually. You could try and transfer the streets and alleys to the local city or municipality and see if they will assume long term maintenance of those streets or alleys. Low probability of success in that option but it never hurts to try. You could also if everything else fails create a new organization simply to maintain the common property that is left (streets and alleys). You would be trading a Condominium for a planned community only without deed restrictions other than payment of fees to support maintenance of the smaller scope common area.

    I’ll gladly discuss this further with you or your community if you are serious about looking into the possibility of terminating your current Condominium.

    As for your comment about not having a meeting in three years, that is clearly a violation of the law that require a meeting of the member at least once each year.

    Dennis

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