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HOA Qualifications

I live in a small rural subdivision called Chapache in Apache County that was created in 1962 (56 1-acre lots; 40 homes). The Chapache Water Cooperative & HOA (CWC/HOA) Board has overseen our private water system and CC&Rs since the 1970s.

Our current board has decided it does not want to enforce our CC&Rs and says that it has no authority to do so. The Board further states that we cannot be an HOA because we do not own common property in the subdivision. This does not seem right to me based on the following information.

Our CWC/HOA owns a 10,000-gal water storage tank on adjacent leased US Forest Service land; and within the subdivision the CWC/HOA owns and operates a 320-ft-deep well, a well house and pump with propane backup generator, a 2-inch water distribution system that supplies each homeowner lot and 6 fire hydrants, and an equipment storage shed. In addition, we employ a part-time water manager and have substantial assets in a bank account.

The well, well house, pump, and storage shed are situated on a 50×55 ft piece of land within a lot in our subdivision. In 1972, the lot property owner, via Quit Claim Deed recorded in Apache County, “desired that the lot owners of the Chapache Subdivision should have an interest in that well to the extent of their shares of water in the Chapache Water Cooperative” and did “quit claim unto each and every lot owner of the Chapache Subdivision who has shares in the Chapache Water Cooperative the right to the use of domestic water from that well located in the North 50 feet and West 55 feet of Lot 34 of the Chapache Subdivision heretofore described.” The deed further states: “To have and to hold said right and easement to such water subject to the above conditions unto the grantees herein specified, their heirs, successors, personal representatives and assigns forever.”

My questions are:

1) Are the property rights/easements assigned in the Quit Claim Deed and our commonly held assets sufficient to qualify us as an HOA?

2) Does an HOA have to own real estate in common to be an HOA or do other permanent assets that we own in common qualify us as an HOA?

3) If the Board is successful in eliminating the HOA, can the CC&Rs be enforced by our Water Cooperative?

I appreciate any insights. The disposition of the HOA and CC&Rs are the subject of our next homeowners meeting over Labor Day.

1 Response

  1. Dennis Legere

    Theresa,

    Three years ago, my answer to your question would have been easy and clear, and that would be that you are a planned community, but then legislation was passed that changed the definition of a planned community to protect Sun Cities recreation association from a lawsuit where they were found in violation of the law for 25 years. That legislation was retroactive to 25 year earlier to get them out of that legal judgement. I would now have to see your recorded CC&R’s and any other document to see if you qualify as a planned community. The key is not common property but rather mandatory assessments and recorded covenants and restrictions. The land that the well and support equipment is also now common property via that deed.
    Dennis

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