Regardless of the reason, there typically are rules or some procedure that must be followed to dissolve your HOA, which usually are found in:
If you're a member of a HOA, it's a good idea for you to understand how your HOA can be dissolved.
The first place to look when trying to figure out how to dissolve your HOA are the HOA's governing documents, which define the HOA's powers and duties. These documents go by various names, but typically you'll hear terms like "bylaws," "articles of incorporation," or sometimes CC&Rs. In most cases, these documents will contain some type of description of how the HOA can be dissolved and what happens after the dissolution.
Unfortunately, the governing documents aren't always helpful. Other than stating how many members' votes it takes to approve dissolution, the documents typically don't explain exactly how the HOA can be dissolved. For example, you might see language like:
"The HOA may be dissolved at any time with the written consent of not less than two-thirds of its members. After all obligations have been fully discharged, its property and assets shall be contributed to a charitable organization to be selected by the HOA's Board of Directors at the time of dissolution."
If your HOA's governing documents contain language like this, not only will you have no guidance on how to dissolve the HOA, but the HOA's common property will go to a charity, which is probably a result that you and the other members want to avoid. In such a case, it's a good idea to get some advice from an experienced real estate lawyer.
Some states follow the Uniform Common Interest Ownership Act (UCIOA) or the Uniform Planned Community Act (UPCA), both of which have similar rules about how to dissolve HOAs and other "common interest communities" (CICs). In particular, the UCIOA provides, among things, that:
Other States
Except for those states that follow the UCIOA or UPC, many states don't have laws that deal with the dissolution of HOAs. In such states, you need to look at the laws that apply to the business form that the HOA took. For example, if the HOA is a nonprofit corporation, as most HOAs are, the laws that govern nonprofit corporations will control how the HOA can be dissolved.
Typically, the filing of a certificate of dissolution is the first step in dissolving a nonprofit corporation. The certificate is filed with the state agency in charge of overseeing corporate and business entities, such as the secretary of state. Then, the HOA's business affairs need to be "wound up" or closed. Again, state law will specify the winding up procedure, but it usually involves the payment of all HOA debts and the liquidation or sale of its assets. When the HOAs affairs have been wound up, the dissolution is complete.
Also, if your HOA is a corporation, it can be dissolved by the state, regardless of whether it's nonprofit and whether you want a dissolution. Almost every state has laws that require corporations to file various papers with, and pay fees to, the state. So, if your corporate HOA doesn't follow those rules, the state can dissolve it.
There are a number of business forms HOAs can take, and so the dissolution of any HOA likely will require you to examine the business laws in your area to determine how exactly the dissolution can accomplished.
Source: Lawyers.comsm
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