At the yearly meeting, Susan Wallace attempted to point out that even though there is California corporation law, common interest development regulations sometimes override pages of law.
They cited CORPORATIONS CODE SECTION 8724 as the overriding statute requiring 100% of the membership voting for dissolution. Pages and pages of law state only a majority is required, but that may not matter. For every opinion we get from a lawyer stating that is so, I find other references saying the 100% vote is necessary.
The problem is not with the board, the problem is with the poor legislation that our representatives in California are writing.
In my opinion, with the newer CID regulations, voluntary dissolution is not possible without the 100% vote. I feel this would be the outcome if we were to waste yet more association dollars on a suit to get an opinion. In other words, in the state of California, you can't dissolve one of these associations. Everyone should contact your state representative to clarify this statute.........Why are CID 'corporations' outside all other law and cannot be dissolved?
The board has indicated they will get an opinion from our attorney.
Below is one case:
Interpretation of Civil Code § 1350
The Committee to Save the Beverly Highlands Homes Association v. The Beverly Highlands Homes Association, 92 Cal. App. 4th 1247 (2001).
The association did not own the four open space lots within the development and it did not own any mutual or reciprocal easements over the residential lots or the open space lots within the development. The association was unwilling to own common area. The dissolution of the association was approved by a majority of the association quorum. The plaintiff argued that under Corporations Code § 8724, which is applicable to common interest developments, the association was improperly dissolved because 100% of the association members did not approve of the dissolution. The court held that the community was not a common-interest development because it had no common area. And as a result, Corporations Code § 8610 controlled and only a majority of the quorum needed to approve the dissolution.
http://www.jdtplaw.com/CM/Publications/CAI2002LAWSEMINAR.asp
This is likely the statute the court would use to make a decision, rather than Mutual Benefit Corporation law.
8724. Without the approval of 100 percent of the members, any
contrary provision in this part or the articles or bylaws
notwithstanding, so long as there is any lot, parcel, area, apartment
or unit for which an owners association (as defined in Section
11003.1 of the Business and Professions Code and created in
connection with any of the forms of development referred to in
Section 11004.5 of the Business and Professions Code) is obligated to
provide management, maintenance, preservation or control:
(a) The owners association or any person acting on its behalf
shall not:
(1) Transfer all or substantially all of its assets; or
(2) File a certificate of dissolution; and
(b) No court shall enter an order declaring the owners association
duly wound up and dissolved.
It would have been helpful if the board had clarified what they knew or sought the counsel of the lawyer we pay when the Dissolution committee was formed. Wasting a year of time and money by individual owners is NOT productive for anyone.
If we can't get rid of this unAMERICAN, socialist owners association, then we better find a way to make it work equitably for all of us. Suggestion? I have received a few and will post them later.
ANOTHER NOTE: Legislation is constantly being formulated regarding Homeowner Associations. This is a good reference to keep track of them. http://echo-ca.org/legislative/glimpse.php
For instance, two interesting items.
AB 2806 Will require every member of the board and each candidate for the board to provide a statement indicating whether or not they have completed an educational course on the law of common interest developments. This information must be included in the ballot material for a board member election. Amended 8/11. Passed by Legislature.
AB 2846 Allows for certain disputes to be heard in small claims court, and permits an owner to pay under protest. Amended 8/5. Passed by Legislature.
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