Taking Over As Majority Owner and Forming New HOA?

7 Replies

Hi all!

I'm in the process of closing on 3 units of a 5 unit town home property. 

There was no past HOA as the previous owner held all 5 of the units. Now that there are multiple owners, there needs to be an HOA mainly for Trash & Lawncare costs that are shared between all owners.

The previous owner wants to be involved in creating the new HOA, but I think that as the new majority owner, shouldn't I, as well as the two other new owners, craft it ourselves?

Thanks for any and all feedback!

Lili

Originally posted by @Lili Thompson :

Hi all!

I'm in the process of closing on 3 units of a 5 unit town home property. 

There was no past HOA as the previous owner held all 5 of the units. Now that there are multiple owners, there needs to be an HOA mainly for Trash & Lawncare costs that are shared between all owners.

The previous owner wants to be involved in creating the new HOA, but I think that as the new majority owner, shouldn't I, as well as the two other new owners, craft it ourselves?

Thanks for any and all feedback!

Lili

 The option to form is for current landowners. Are you currently sharing costs in an informal agreement? 

@Lili Thompson so the previous owner owns the 2 remaining units or sold 3 to you and 2 to other people?

If the previous owner has 0 equity in the properties, he should not be involved at all.

Is there some sort of financing agreement with the previous owner, or do you own these outright?

@Jason D. Previous owner sold two to other people and we're working on the details of the contract to sell the remaining three to me. Once we close, he'll have no further equity in the properties, but for some reason, he wants to be involved in drafting the HOA prior to closing.

@Lili Thompson so, technically, he can do that, because he is still an owner. I would not allow that and I would add that stipulation into my purchase contract. Why does he feel the need to be involved? My guess is that he is trying to protect the interests of the other owners, who he may have made a promise to.

I would definitely make sure this is sorted before closing

Originally posted by @Lili Thompson :

@Ronald Rohde hi Ronald, I’m not sure I understand your question, but my response above this mightoffer a little more clarity. Thanks for the help! 

You mentioned trash costs. Is there currently a shared dumpster that is being used by all? Costs billed to one owner and he collects from the others? An HOA is the ideal vehicle to control and share these costs with less risk to any single owner.

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