Just a random thought! According to The Arizona Republic, HOA's have had their insurance premiums increase on average by 48%, noting that the increase is significantly higher than the national average. And I've also heard from a person who owns a duplex that the insurance companies are pushing for each homeowner to become self-insured. So the question is, what would happen if these HOA communities decided to amend their corporate documents and file for dissolution from being under Title 33 and just fallback and remain under the RCSC's Title 10 status? First of all, many HOA's are quite small in size so it might not be such a difficult decision considering the circumstances. Those homes would still be covered under SCHOA's CC&R's. It's my understanding that the property the homes are built on are owned by the homeowner so it's only the common areas that would need to be distributed? The whole situation seems quite convoluted to begin with if you ask me! First of all, you have a community established under Title 10 who's homeowners must adhere to the rules of an HOA (SCHOA) even though you may not be a Member of that HOA. Then you also have 384 individual HOA's governed under Title 33 within the Title 10 community who not only each have their own individual CC&R's, but if their CC&R's fail to correct a situation, then the CC&R's from SCHOA will determine the remedy. Belt and suspenders? I don't know what you lose by removing yourself from Title 33 that is not already covered under SCHOA and Title 10? If you can substantially reduce your insurance premiums while still be protected under existing CC&R's, it might be an option worth considering? What am I missing? Don't know if it would make good sense to do it or not, just a random thought on a Sunday afternoon!
FYI, I took this question to the internet and AI generated an answer, of sorts. If a condo group decides to change from Title 33 to Title 10, several implications would arise: Governance Changes: The association would transition from a developer-controlled structure to homeowners' control, meaning homeowners would take full responsibility for governance and maintenance of common elements. 1 Amendment Process: The change would require the amendment of corporate documents, which typically requires approval from the membership. 1 Legal Considerations: Homeowners may have legal options if they believe their HOA board has exceeded its authority in changing rules without proper procedure. 1 Operational Shifts: The association would need to adapt its operations and governance structure to align with Title 10 regulations, which may involve significant changes in policies and procedures. 1 This transition could significantly impact the management and control of the condo group, necessitating careful consideration of the implications. The need for the members to amend the documents governing the condo group is a no-brainer. The management of the of the group becomes an issue though. Are people willing to band together within the community to create things such as a maintenance company agreemement? This also puts the group insurance for the roof, and structure maintenance back on the homeowner. Many of there owners are single elderly folks not able to tackle the exterior maintenance on their own. Then comes the actual management companies themselves. Are there any implied contracts that state they will be the leading servicers of the condo amenties. If so, they could have a legal reason to come after homeowners not wanting to stay with the management company. The flip side is the individual homeowner can now negotiate with the management company for services provided and at what cost.
The deed I saw from an HOA said that the homeowner also owned a percentage of the common area, so if there were 12 units in the HOA, each homeowner would also own 1/12 of the common area along with the property his home was built on, so there would be no common area left to be maintained by somebody else! Yes, that would be a no-brainer assumption, which might not be as difficult as it might seem. I would assume that dissolution from Title 33 would automatically place them under Title 10 since they are already within a Title 10 corporation? All good additional points that must be considered. Not sure how much each HOA pays in association fees, but then again, if you're only paying for your own little plot of land rather than paying for the entire HOA, you might be ahead of the game? It's all just an exorcise in "What if," that piqued my interest wondering about the loses, gains, advantages and disadvantages and how would it affect the financial status of RCSC, if at all.
It would have no impact on the RCSC, each unit owner signs the same binding facilities agreement as a single family owner. The RCSC's choice to fall under Title 10 rather than Title 33 is clearly about financial and regulatory preferences. The argument they made was Sun City was built before Title 33 was passed which meant they weren't obligated to be covered by the Planned Communities Act (over-simplified). They further argued they weren't anything like a home owners association. I almost dread bringing up the longest running debate over attached housing in Sun City (and one i am baffled by). For years the argument has raged whether all of these units are HOA's or PUD's. Don't ask; you know HOA is Home Owners Association while PUD is Planned Unit Development. Sorry, i never cared enough to sort out the differences, but some in the community are vehement about whether its tomato or tomatoe. The bigger challenge, and it would have no impact on the RCSC, is whether they could legally remove themselves and become free-standing apartments, garden courts units, twin homes or quads (there's other names as well). The biggest concern is with shared walls, if your neighbor neglects their property (no insurance, upkeep on their small share of newly owned common grounds or let's their roof go into disrepair), it could and often does impact every one of the units in the HOA (if nothing more than from a value perspective, obviously there's way more). That was the whole point of attached units; shared expenses and common grounds for maintaining their property. I won't begin to play a lawyer here, but my immediate reaction is it would be expensive to even begin to try and get those living in the HOA (or is it a PUD), to get the votes for it to happen. And, if it were legally possible and owners voted for it, the real nightmare begins with each unit having their individual obligation to maintain. On it's face, it sounds intriguing, in reality, the mess would really start once the divorce from shared responsibility happened. As always, this is just one man's opinion.
I think a personal in depth reading of Title 10 is in order as the last paragraph would come under the business of the corporation. This clearly is in the purview of the Board. The members might do an advise and consent but the Board is ultimately responsible for contracts , retaining businesses for specific purposes, etc.
I'm not so sure I would agree. The RCSC is about recreation facilities and not really about housing per se, other than requiring the home owners to adhere to the Facility Agreement and CC&R's. The RCSC has no real jurisdiction over a private home owners decision to buy or sell their home within Sun City, so why would the board have any say or need to be involved? By dissolving from Title 33 I would assume the home owners would automatically fall under Title 10 since they are already Members of the Title 10 corporation. Also not sure it would have any financial implications on the RCSC at all? From what I've seen, the home owner in an HOA also owns a percentage of the common area, so there may be a need to re-survey the property and define each new property line on a revised plat, which may garner the RCSC a few bucks because although the Title didn't really change ownership, the property lines did? That inclusion of the common space may not be the case in every HOA but it was in the Deed I saw.
