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Damien Bosco
Damien Bosco, Attorney
Category: Real Estate Law
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We have a small community and we are trying to dissolve the

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We have a small community and we are trying to dissolve the Homeowners association and most of the homeowners want to get rod of the HOA but we have a pool that a group of the none active HOA board is trying to charge everyone but we currently don't have a HOA. We have meet with the majority of the homeowners and they agree on forming a civic club for the community. Now how do we deal with the legal part of dissolving this HOA plus the pool.
JA: Because real estate law varies from place to place, can you tell me what state the association is in?
Customer: Texas
JA: Has anything been filed or reported?
Customer: Houston, TX
JA: Anything else you want the lawyer to know before I connect you?
Customer: Let me check

Hello: My name is ***** ***** I am an attorney. Please give me a moment to review your question. I may ask some questions to clarify issues.

It's a little unclear what you are saying. You mention you want to dissolve an HOA then mention that you don't currently have an HOA. Please clarify. Thank you.

Customer: replied 4 months ago.
The HOA is a legal entity so therefore is there but without a board because the majority of the homeowners do not want it anymore. There are a handful of people that are trying to get a board to continue the HOA. The majority of the homeowners have agreed to form a civic club that will help to maintain the community but as a voluntary organization. So we the homeowners don't want any legal issues with the HOA in the future and this is the reason why we want to dissolve the HOA.

The covenants, conditions, and restrictions, or CC&Rs may cover the dissolution process. Do you have a copy of it to review?

Customer: replied 4 months ago.
The file i'm trying to send for your review is too large. Can you give me another option. Thanks

Is it uploadable to an email?

Customer: replied 4 months ago.
i can send it via emails. Let me know an email where I can send it. Thanks

I have sent you the Premium Service Offer. Upon acceptance, we can arrange for you to email it to me.

Damien Bosco and other Real Estate Law Specialists are ready to help you
Customer: replied 4 months ago.
my email account is***@******.***; let me know where I can send you the document for your review.

I provided to you an email account. If you do not have it, let me know.

Customer: replied 4 months ago.
I just sent you the the Declaration of Covenants, conditions and restrictions for the Southwood Place Patio Home Community Association to your email address. Please let me know your opinion when you have an opportunity to review the document.

I reviewed the DCCR and reviewed it. It does not appear to discuss dissolution. Since the HOA is in Texas, let me research to see what is the procedure in Texas to dissolve an HOA.

By chance do you have a copy of your bylaws?

Below is what I found what the law says. It says there has to be 100% agreement or the DCC&R or Bylaws can say as little as 67% is necessary. We can discuss more if you want to do so.

Sec. 81.110. TERMINATION OF CONDOMINIUM REGIME. (a) By unanimous agreement, or if the declaration provides for termination by agreement of the owners, by agreement of the holders of at least 67 percent or a stated percentage in the declaration, whichever is greater, of the ownership interests in the condominium, the owners of a building in a condominium regime may terminate the regime and request the county clerk of the county in which the regime is located to merge the records of the estates that comprise the condominium regime, if any creditors in whose behalf encumbrances against the building are recorded agree to accept the undivided portions of the property owned by the debtors as security, provided no amendment may be made to a declaration to reduce the vote required for termination of the condominium regime. (b) If a condominium regime is terminated, each apartment owner owns an undivided interest in the common property that corresponds to the undivided interest previously owned by the apartment owner in the common elements. (c) Property that has been removed from a condominium regime may be dedicated to another condominium regime at any time.

Customer: replied 4 months ago.
I would like to discuss further. So this means that if we have a 67% or above of homeowners agreeing to dissolve the HOA we can do it. Can this be done at the county clerk office? Also, what are the steps that we need to take. Not sure if you notice but we also have a recreational association that controls the community pool which we also want to dissolve this association and turn the pool over to the community and form a Civic Club. Let me know when you have an opportunity.

I interpret that part of the statute as you do that you would need 67%. However, I found that is for condominiums formed prior to 1994. I found another part of the statute below that says something different for condominiums formed after 1994 (see below). I also believe you would go through the county clerk's office. You would want to contact them to see what the clerk needs from you. The interplay with the recreational association would seem to depend on its interplay with the HOA, i.e., is it part of the HOA, or a totally separate association. If totally separate, is it an HOA itself or another type of association.

Sec. 82.068. TERMINATION OF CONDOMINIUM. (a) Unless the declaration provides otherwise and except for a taking of all the units by condemnation, a condominium may be terminated only by the agreement of 100 percent of the votes in the association and each holder of a deed of trust or vendor's lien on a unit. The declaration may not allow a termination by less than 80 percent of the votes in the association if any unit is restricted exclusively to residential uses.

(b) An agreement of unit owners to terminate a condominium must be evidenced by the execution or ratification of a termination agreement by the requisite number of unit owners. If, pursuant to a termination agreement, the real property constituting the condominium is to be sold following termination, the termination agreement must set forth the terms of the sale. To be effective, a termination agreement and all ratifications of the agreement must be recorded in each county in which a portion of the condominium is located.

(c) The association, on behalf of the unit owners, may contract for the sale of real property in the condominium, but the contract is not binding on the unit owners until it is approved under Subsections (a) and (b). If the real property constituting the condominium is to be sold following termination, on termination title to that real property vests in the association as trustee for the holders of all interests in the units, and the association has all powers necessary and appropriate to effect the sale, including the power to convey the interests of nonconsenting owners. Until the sale has been concluded and the proceeds distributed, the association shall continue to exist and retains the powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided by Subsection (f). Unless the termination agreement specifies differently, as long as the association holds title to the real property, each unit owner and the owner's successors in interest have an exclusive right to occupy the portion of the real property that formerly constituted the owner's unit. During that period of occupancy a unit owner and the owner's successors in interest remain liable for all assessments and other obligations imposed on unit owners by this chapter or the declaration.

(d) If the real property constituting the condominium is not to be sold following termination, on termination title to the real property vests in the unit owners as tenants in common in proportion to their respective interests, and liens on the units shift accordingly. While the tenancy in common exists, a unit owner and the owner's successors in interest have an exclusive right to occupy the portion of the real property that formerly constituted the owner's unit.

(e) Following termination of the condominium, and after payment of or provision for the claims of the association's creditors, the assets of the association shall be distributed to unit owners in proportion to their respective interests. The proceeds of sale described by Subsection (c) and held by the association as trustee are not assets of the association.

(f) The interest of a unit owner referred to in Subsections (c), (d), and (e) is, except as provided by Subsection (g), the fair market value of the owner's unit, limited common elements, and common element interest immediately before the termination, as determined by one or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved by unit owners of units to which 25 percent of the votes in the association are allocated not later than the 30th day after the date of distribution. The proportion of a unit owner's interest to that of all unit owners is determined by dividing the fair market value of the unit owner's unit and common element interest by the total fair market values of all the units and common elements.

(g) If a unit or a limited common element is destroyed to the extent that an appraisal of the fair market value before the destruction cannot be made, the interest of a unit owner is the owner's common element interest immediately before the termination.

(h) Foreclosure or enforcement of a lien or encumbrance against the entire condominium does not of itself terminate the condominium, and foreclosure or enforcement of a lien or encumbrance against a portion of the condominium does not withdraw that portion from the condominium, unless the portion is withdrawable real property or unless the mortgage being foreclosed was recorded before the date the declaration was recorded and the mortgagee did not consent in writing to the declaration.

(i) By agreement of the same percentage of unit owners that is required to terminate the condominium, the unit owners may rescind a termination agreement and reinstate the declaration in effect immediately before the election to terminate. To be effective, the rescission agreement must be in writing, executed by the unit owners who desire to rescind, and recorded in each county in which any portion of the condominium is located.

Customer: replied 4 months ago.
I just sent you an email with the bylaws of the homeowners association and the recreational association. Please review them and let me know your opinion on the steps dissolve both associations. Thank you

In order for me to review additional documents, you have to open an another question. You can request me. Within that question i can offer you the premium service to review the additional documents.

Customer: replied 3 months ago.
Please review the documents I sent you. We need to make sure that based on the bylaws we can dissolve the homeowners association by having all homeowners sign a termination agreement and filing this document with the county clerk courthouse. Let me know if we can file this termination agreement based on what you find in the bylaws for both the recreation association and homeowners association.