Conversion of voluntary association to mandatory

For older, established neighborhoods developed without a mandatory homeowners association, Oklahoma law provides a mechanism by which the owners of lots within the neighborhood may vote to create a mandatory association. A mandatory association is one in which each owner of a lot must be a member of the association simply by virtue of owning a lot within the addition. Typically, members will remit dues or annual assessments of a few hundred dollars to the association, and will elect board members to act on behalf of the association.

In most states, the courts have had to resolve the question of whether a neighborhood may vote to create a mandatory association after the fact (after lots have been sold to resident owners) - Colorado, Washington, Illinois, Nebraska, and Montana to name a few. In Oklahoma, the legislature adopted Oklahoma Statutes, Title 11, Section 42-106.1(D) to address the issue. In essence, 106.1(D) allows for the creation of a mandatory association by allowing lot owners within a neighborhood to add a new covenant with a 60% majority vote of the owners. If approved by the 60% majority, the new covenant is filed with the local county clerk, but a lot is not subject to membership within the newly created association until either 1) the current owner declares their lot subject to the association, or 2) the lot transfers from the current owner to a successor owner after the new covenant is filed.

Section 106.1(D) does require certain formalities to be followed, such as proper notice and a vote. It is highly recommended that owners wishing to embark on a conversion project seek competent legal counsel versed in such projects. Legal counsel would provide the owners advice on the legal requirements of the statute and advise the owners on the social and economic aspects of such a project. The conversion process requires at least one meeting of the owners, but typically more meetings are advisable to fully communicate the aspects and ramifications of the project to each owner potentially impacted by the new covenant.