Chances are, if you build a new home or purchase a house that was built within the last decade or so, you will live in a community that is run by a homeowners’ association.
A homeowners’ association fulfills several functions within the community, including maintaining a neighborhood wide aesthetic pertaining to community architectural and landscaping standards, as well as providing maintenance and upkeep for community facilities and public spaces. Although there are many perks to living in an HOA, there have been negative stigmas around how some associations can be run. Some may wonder if homeowners have an option when it comes to joining a homeowners’ association, so let’s look at the options:
When Membership is Required
In North Carolina, community’s formed after January 1, 1999, and constituting of more than 20 lots fall under the North Carolina Planned Community Act. This act outlines that the planned development of an HOA. “A lot owners’ association shall be incorporated no later than the date the first lot in the planned community is conveyed. The membership of the association at all times shall consist exclusively of all the lot owners…”
In South Carolina, some HOAs offer voluntary participation, but most are mandatory. Obviously, those living in a community where membership is voluntary do not have to join, but they may not receive the benefits associated with membership. Those who live in a community with mandatory membership must join the association, pay assessments, and comply with neighborhood standards.
If you buy a home in a neighborhood that already has an established HOA, you must join as a condition of purchasing the new home, which should be presented to homeowners as a part of the home buying process.
When Membership May Not Be Required
In South Carolina, provisions dictating HOA membership are determined by the HOA’s governing documents.
If an HOA is created in a neighborhood where no association previously existed, current homeowners are generally not required to become members of the association. Similarly, sometimes a community with voluntary HOA membership, when facing dwindling funds and/or participation, will decide to become a mandatory HOA community.
In these situations, homeowners are not obligated to join, but many can be convinced to join once the benefits of membership are adequately demonstrated.
Dissolving an HOA
If you live in an HOA community, you do not have the option to opt-out. If you are interested in getting rid of the HOA, the process to do so is difficult, lengthy, and very costly.
If this is truly an option you wish to pursue, you should talk to your neighbors to determine if enough homeowners feel the same way about their HOA.
– Unless otherwise stated in the governing documents, a vote to dissolve a HOA in South Carolina requires approval of at least two-thirds of homeowners or a majority of a voting body (voting members or Board of Directors), whichever is less.
– According to North Carolina Law, unless otherwise stated in the governing documents, 80 percent of homeowners must be in favor of dissolution to begin the process.
Read your CC&Rs and understand your state’s laws, which will outline the rules and specify the procedure for how to dissolve the association.
If this is a plan of action homeowners wish to pursue, the association will need to hire an attorney with experience in this matter. Because the dissolution of an association is a legal process with explicit details that need to be followed and paid attention to, the collective group of homeowners will need adequate legal representation.
For example, the association must give specific notice to homeowners about any meeting regarding dissolution of the association. During the process, any outstanding financial obligations of the HOA will need to be paid, and the responsibility of assets (like common areas and amenities) will need to be determined and explained to homeowners.
The Alternative
Instead of taking drastic measures and pursuing the dissolution of an association, we recommend first considering what can be done to make the HOA better for those in the community. Are members unhappy because of leadership? HOA management company? Excessive bylaws? Expensive assessments? These are all problems with easy solutions.
If you’re unhappy with the way your HOA handles things in your community, one of the best things you can do is get involved! Talk to your neighbors, attend board meetings, or even volunteer as a board member yourself. Take action to help your community be a place where you and your neighbors enjoy living.