Did you know that HOA covenants can expire? It may sound crazy, but it’s true! In many states, HOA covenants that are more than 30 years old expire and are no longer enforceable. This can cause a myriad of problems, not only for the HOA board, but for the whole community.
What Happens When Covenants Expire
Once the HOA covenants expire, the board effectively becomes powerless. This means that the HOA cannot enforce the collection of assessments, cannot enforce architectural standards, and cannot regulate the use of common areas and common facilities.
The most concerning of these problems is the inability of the board to enforce the mandatory payment of assessments and fees. Without this cash flow, the HOA board ends up unable to operate and properly maintain the community. The negative repercussions for an HOA that cannot enforce covenants is devastating for the property values of the homes within the community; the whole community will suffer.
Fortunately, there is some good news! HOAs can revitalize their covenants if, or when, they expire through a process called Covenant Revitalization.
Essentially, covenant revitalization is a process whereby the previous HOA covenants can be reinstated just as they were throughout the community, and it will be as if there were no lapse at all.
The revitalization process involves several steps – the most important being that the board must obtain a majority vote from all homeowners in favor of revitalization. Once the vote is obtained, the revitalization must be approved by local or state governments.
Rules for covenant revitalization can be found on your state’s Department of Community Affairs (DCA) website, or in the DCA office. Your HOA management company can also help you find and understand the rules for your state regarding covenant revitalization.
It is crucial that HOA boards work with a legal team to analyze their governing documents to see what actions are necessary regarding their individual covenants. In some states, HOAs with covenants that are less than 30 years old can avoid the revitalization process altogether by “preserving” their current covenants. This process is much quicker and simpler, and should definitely be considered if it’s an option!