Bill Description: House Bill 708 would create a 10-year sunsetting provision for HOAs.

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Does it violate the spirit or the letter of either the United States Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the US Constitution or the Idaho Constitution?

House Bill 708 would create Section 55-3204C, Idaho Code, to create a 10-year sunsetting provision for HOAs. Under this law, HOAs currently in existence for 10 years or more would automatically dissolve on July 1, 2029, unless their members vote against such dissolution. For newer HOAs, they would automatically dissolve after ten years from the date of filing of the articles of incorporation unless their members vote against such dissolution.

An HOA would be required to hold a meeting of its membership before the automatic dissolution dates to provide an opportunity for its members to vote against the automatic dissolution of the homeowner's association. The automatic dissolution of the HOA would not occur if a majority of the eligible voters vote against such automatic dissolution.

The bill also says, “Unless otherwise provided for in the declaration or governing documents, all common property, including common areas, limited common areas, other property or improvements owned or maintained by a homeowner's association, or property owned in common by the members of a homeowner's association shall remain dedicated to the common use of the members of the homeowner's association. The plan of dissolution shall provide for the disposition of the assets of a homeowner's association by transfer to a successor entity, the lot owners, or a local government.”

As a general concept, this sunsetting provision would require that an HOA’s continued existence require ongoing majority support rather than being permanently enshrined based on the wishes of people who may no longer reside in or actively participate in the association.  

In some cases, however, HOAs can become dormant or non-functional, and under current law, there is no simple way for homeowners to dissolve an inactive or otherwise problematic HOA. This bill could provide a partial solution to this issue, although it is unclear what would happen if an HOA failed to “hold a meeting of its membership before the automatic dissolution dates” as required by this section. Would the automatic dissolution be deemed to have occurred, or would it be forestalled by the lack of an opportunity for homeowners to vote against it? 

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