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Do we want an HOA?

An HOA is charged generally with ensuring that agreed upon services are completed and paid for and that covenants are enforced. Our Land User's Code acts as our covenants, and should list the services for which the community is liable. The Board of Directors is also charged with establishing a budget for the community, including an emergency fund, filing legal and tax documents as needed, keeping members’ accounts, billing and collecting on those accounts, and of course, abiding by the law and the founding documents.

Much of this work can be done by an independent management company; however enforcement of the covenants remains a HOA Board duty.

As most members are painfully aware, enforcement of the GWLUA covenants has been inconsistent at best, and that has been a source of much community dissatisfaction. Ultimately it is the duty of the Board to enforce all covenants fairly and equally, to the utmost extent of the law. The Board has steadfastly refused to take that final step and sue to enforce covenants. That means that any member who really wants to have a covenant enforced, has to take matters into their own hands, possibly suing for enforcement as well as suing the Board for breach of duty.

So did the past Association do such a great job at this that we even need them?

It would seem like an easy decision but for the common lands.

These approximately 347 acres of undeveloped lands are named in our deeds as property with common community ownership, although they currently remain titled under Michael Reynolds. He is the legally responsible party, and he is personally liable for taxes and for damages occurring on those lands. As a result of the current lawsuit, the lands may be turned over to the community in the near future. If we accept the lands, then we need an entity which can take title to the lands, ensure that the expenses for the lands are paid, and protect community members from liability resulting from the use of the land. A corporation would be one solution to this problem.

If we choose to have an HOA that has the power to levy fees or enforce covenants, it must comply with the NM HOA Act, and that requires that it be incorporated, which in turn requires a Board.

You can’t just roll over one business structure into another business structure. If we wish to become a corporation, then we need to as the community, terminate the GWLUA instigate the Transition of Power and become a new entity. Incorporating creates a totally new business entity with totally new founding documents. If we don't like the way the past Board was operating, then we can make sure that we write our new documents to limit those powers with which we disagree. We can absolutely determine for ourselves what rules we care about and the extent to which we will enforce them. Since we are starting anew, we, the community, get to decide everything.


Next: Pros and Cons of Incorporating

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