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Concerning real estate law, private property rights, and related matters with a focus on Colorado

I Want to Dissolve my HOA

Why terminating or dissolving a homeowners' association is difficult
October 29, 2024

I have had many clients who are upset with their homeowners’ association (“HOA”). Sometimes my advice is to sell their house and move somewhere with no HOA at all. I’ve also been asked – why can’t we just get rid of the HOA? Unfortunately, that is not so simple.

There are two main issues that come up with terminating or dissolving an HOA. The first one is simply getting the votes. Colorado law requires a supermajority of owners in an HOA to vote in favor of terminating the HOA. It is extremely difficult to get sufficient interest in the termination effort. Most owners would hesitate take such a drastic step. After all, the HOA was set up to continue indefinitely. The primary purpose of HOAs in general is to preserve property values. Many owners would conclude that a “bad” HOA is better than none at all.

The other main issue is what to do about the common elements. The “common elements” are things that the HOA is responsible to maintain, such as tennis courts, green belts, landscaping, pool, etc. Ideally, the common elements would be conveyed away to someone willing and able to take care of them. This is difficult – who would want to own a greenbelt? If a new owner cannot be found, Colorado law requires that upon termination the owners in the HOA take title to the common elements as tenants in common in proportion to the market value of their individual units. This is not practical. Thus, terminating an HOA is basically unheard of.

I have had only one client that made a serious effort to dissolve their HOA. In that case, it actually made some sense. The only “common elements” for the HOA to take care of were two strips of landscaping on either side of the road leading into the neighborhood. Those in favor of terminating understandably believed that maintaining this tiny amount of landscaping was not worth the burden of carrying on the HOA, especially considering that the neighboring property owners were interested in acquiring that landscaping. Alas, the vote fell far short. This HOA still exists.