How to Dissolve an HOA

Many things could lead to a desire to dissolve a Home Owners Association (HOA); perhaps financial accountability is questionable or rules are too restrictive or enforced arbitrarily. Whatever the catalyst, It can be very difficult to dissolve and HOA. You can rally your neighbors and accomplish much of the preliminary work yourself; however you will most likely require the help of an attorney to achieve successful dissolution of an HOA.

Step 1

Obtain and thoroughly read the HOA's governing documents. Determine whether the HOA is organized as a for-profit, nonprofit or limited liability corporation, and make note of the policies and procedures pertaining to dissolution. Pay particular attention to how the HOA's common property is to be disposed of and determine if dissolving the HOA could result in owners being forced to sell their property.

Step 2

Canvas your neighbors to ascertain whether you have enough support to pursue dissolution, typically 66 to 80 percent of the HOA membership. Ensure you have supporter contact information and communicate regularly throughout the process.

Step 3

Research state laws governing HOAs to determine if you can meet the legal standards for dissolution. Several states adhere to the codes set forth by the Uniform Planned Community (UPCA) and Uniform Common Interest Ownership (UCIOA) Acts. Contact the Secretary of State to ascertain the process of dissolving a corporation of the type the HOA is organized under in those states which do not comply with either act.

Step 4

Meet with owners supportive of dissolving the HOA. Report the information gathered and make an exhaustive list of unanswered questions and issues.

Step 5

Find a real estate attorney well versed in HOA law and sympathetic to your position. Document the reasons for the proposed dissolution and note their insights into the strength and weaknesses of your case.

Step 6

Report back to the owners' group and decide which attorney to hire to pursue your suit to dissolve the HOA.

Tip

Interview several lawyers and invite them to speak with the supportive owners group prior to making a hiring decision.

Warning

Many real estate attorneys make a direct profit from the HOA industry. Research the attorneys’ affiliations thoroughly prior to hiring.

Amassing the required owner support can be daunting. Remember the governing body of the HOA is your neighbors. They will almost certainly work to thwart your efforts and may resort to retaliatory tactics against those supporting dissolution.

Owners in horizontal properties like high-rises are often contractually required to sell their units when the HOA is dissolved.

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