Full question:
I bought a home in a new development in Florida last year. I also was entered into a HOA. The development has stopped all construction, maybe due to the economy, and I am the only resident in the development other than the developer. I think he may be facing bankrupty or foreclosure and he has stopped all amenities that were supposed to be provided by the HOA. Can I be disolved from the HOA since he broke the HOA agreement? What are my options?
- Category: Real Property
- Subcategory: Homeowner's Association
- Date:
- State: Florida
Answer:
Whether you can opt out of the HOA depends on its bylaws. Typically, you cannot leave the HOA unless a majority of members vote to allow it or if all members agree to disband the HOA after the developer exits.
In situations where a developer faces financial issues, it’s common for HOA fees to increase, as the developer usually covers budget shortfalls when there are fewer homes sold. If the developer has stopped providing amenities, it may indicate financial distress.
If the developer, who holds a majority of the HOA board seats, is no longer able to fulfill their responsibilities, homeowners should consider banding together to elect their own board, if allowed by the HOA documents. If not, forming an informal advisory board can help ensure homeowner involvement.
Keep local government informed about the HOA's financial status, as they may have resources or insights regarding the developer. If the developer defaults on any loans, the bank may foreclose on the remaining properties, which could impact the HOA.
If the developer files for bankruptcy, a court-appointed receiver will have similar rights as the developer, including board appointments. Homeowners may face increased special assessments if there are shortfalls in the HOA's reserve funds.
For more specific guidance, consult with an attorney who specializes in HOA issues.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.