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Can Homeowners’ Associations Be Dissolved?

Can Homeowners’ Associations Be Dissolved?

Homeowners’ associations (HOAs) can be dissolved in Maryland. There are a number of reasons why an HOA might be dissolved, but the most common is that it is no longer needed or wanted by the homeowners.

HOAs are voluntary organizations, so if the majority of the homeowners decide they no longer want or need one, they can vote to dissolve it. This can be done by following the procedures set forth in the HOA’s bylaws.

What Happens When an HOA Is Dissolved?

Once an HOA is dissolved, all of its assets must be distributed to the homeowners. This includes any money in the HOA’s bank account, as well as any property owned by the HOA. The HOA’s insurance policy will also be cancelled, and any remaining contracts must be fulfilled by the homeowners.

Dissolving an HOA is not a decision to be made lightly, as it can have a number of consequences. For example, dissolving an HOA may make it difficult for homeowners to sell, as potential buyers may be concerned about the lack of an HOA. Additionally, dissolving an HOA can also impact property values, as HOAs can help to keep neighborhoods well-maintained.

How to Prevent the Dissolution of an HOA?

As a general overview, to prevent dissolution of an HOA in Maryland, the following would need to occur:

  • All property owners would need to be in good standing with their financial obligations to the HOA.
  • The HOA would need to be adhering to its governing documents.
  • There would need to be a strong and engaged board of directors leading the HOA. If the HOA is having financial difficulties, the board of directors should take measures to cut costs and increase revenue. If there are violations of the governing documents, the board should work to rectify the situation.
  • If board members are not fulfilling their duties, it may be necessary to replace them.

It is important to keep in mind that an HOA can be dissolved even if all property owners are current on their financial obligations and the HOA is following its governing documents. If the HOA is not meeting the needs of the community, the property owners may vote to dissolve the HOA. To avoid dissolution of an HOA in Maryland, the board of directors should ensure the HOA is meeting the needs of the community and all property owners are in good standing financially.

Dissolution of an HOA is a serious matter. If the HOA is dissolved, the homeowners will lose their say in how the property is run and will have to pay for all the expenses of the property themselves. There are several ways to prevent the dissolution of an HOA. Homeowners should make sure the HOA is run democratically, that it is well-funded, that the property is well-maintained, that the homeowners are happy, and that the HOA is run professionally.

Annapolis HOA Lawyers at Oliveri & Larsen Can Help You Deal With Issues in Your HOA

If you are running an HOA and you are facing a dissolution action, there are steps you can take. You will need to take swift action, so it is advisable to get legal help. Speak with one of our Annapolis HOA lawyers at Oliveri & Larsen today. Call us at 401-295-3000 or contact us online to schedule an initial consultation. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Hartford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.

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