roeun langley
roeun langley
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4 years ago
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What happens to a subdivision's common areas & amenities when the HOA is dissolved?

A subdivision recently lost it's HOA owner (he went bankrupt), so now the whole neighborhood is taking part in keeping the amenities and common areas maintained. who owns these amenities/common areas now?
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John  Corgan
John Corgan
Real Estate Professional
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4 years ago
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In the DC area when subdivisions are approved, the record plat indicates the common areas- and those common areas are initially owned by the developer during the development of the property . As development proceeds and common areas are completed, they are then deeded over at no consideration to the HOA which is a non-profit incorporated entity. The HOA should be set up so that when the project is completed and assessments to the residents are coming in that the assessments are equal to the yearly expenses plus set aside amounts to build up reserves.

During development when all units are not built out and occupied, the developer usually funds the shortfall where the expenses exceed the assessments.

Not knowing the details it sounds like the original owner /developer went bankrupt. At some point another entity will step in( bank that loaned the developer money or new developer who will buy the developer's interest at a discount). Dependent upon the HOA documents and what assets(lots) are left to be developed or sold, the new developer or bank often is forced or recognizes the benefit of, getting the HOA amenities completed and maintained so that they can realize the full value of the remaining lots.

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