What to Do with an Inactive Community
One HOA in CA had been inactive for over a year following the resignation of its entire board. With no meetings, no budget approval, and no point of contact for vendors or residents, basic maintenance has stalled, common areas were overgrown, insurance collapsed, and homeowners were left in limbo. The lack of leadership raised serious concerns about legal compliance, financial oversight, and long-term property values.
You’ll notice signs like missing updates, unpaid dues, worn-down common areas, and unclear leadership. When no one knows who’s in charge or how to report issues, it’s time to take action.
Inactive HOAs
An inactive HOA can lose its legal standing, miss tax filings, and expose volunteers to personal liability. Maintenance delays may turn into costly repairs, and home sales can be delayed due to HOA red flags.
Steps to Reactivate Your HOA
- Start by checking the HOA’s legal status with the state. If it’s inactive, file any necessary documents to restore it. Legal help may be needed for reinstatement.
- Then, audit finances. Locate bank accounts, check reserve levels, and catch up on past-due taxes or unpaid bills. Restart the dues collection to stabilize the budget.
- Review your governing documents and begin small. Hold meetings, set a basic budget, and focus on essential maintenance. Clear rules and consistency build credibility.
- Communicate simply and often. Let homeowners know the plan, why it matters, and what’s being done. Transparency encourages support and participation.
Pro Tip: Host community events, like BBQs, pizza parties, and more. Make them fun and relaxed!
Need some inspiration? See below:
Key Definitions that might help:
Legal Standing: The HOA’s official status with the state as a valid and recognized corporation.
Governing Documents: The HOA’s rules and guidelines, including the CC&Rs, Bylaws, and Articles of Incorporation.
Dues Collection: The process of collecting fees from homeowners to fund the HOA’s budget.
Reserve Fund: Money saved for major repairs and future projects.
Audit: A thorough review of the HOA’s financials, including accounts, bills, and reserves.
Budget: A financial plan showing expected income (dues) and expenses.
Maintenance: Upkeep of shared areas like landscaping, lighting, and facilities.
Transparency: Open communication and clear sharing of plans, updates, and decisions.
Reinstatement: The legal process of restoring an HOA’s active status with the state.
Liability: Legal or financial responsibility, which can fall on volunteers if the HOA is out of compliance.
