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Maine Alliance for Road Associations

Conversion to Statutory

  • 10 Jul 2022 1:50 PM
    Message # 12843758

    We have a 20 year old voluntary association that is set up as a nonprofit. there are just over 50 members at this point . We have by laws and a board in place. I am president. We just had a very contentious meeting  where a group of 15 people came to the meeting in person and  by proxy.  first they voted down going Statutory then threatened to not play for plowing and only paing what they felt fair (we had big labor and gas increased from our contractors this year)  These people never come to meeting in fact we were not even able to fill all board spots in the past two years.

    my questions:

    do we need a vote to go statutory or do we just need 3 members to call the meeting?

    The majority are for going statutory and it would have passed if this group did not show up for the first time. At the first  Statutory meeting could the whole forming of the association actually be voted down or is there something  that requires the association to be formed and road maintained.?

    What would happen to the our original non-profit. would it become the new association or would it need to be dissolved?

    This is a far from ideal situation. We were planning on going Statutory to protect ourselves from a large plot  of land that is up for sale that could add many new homes to our road. After the the last meeting it seems we also need to protected from members that don't want to grow with the road.

    Thanks in Advance

  • 11 Jul 2022 8:29 AM
    Reply # 12844415 on 12843758
    Anonymous member (Administrator)

    Man, that must have been some meeting. I can almost visualize myself there!

    To become a statutory road association, you will need have a Warrant (the "Notice") signed with Notary by three owners from different parcels mailed by USPS to all owners along your road, calling a meeting at least 30 days hence, etc., according to 23 MRS ยง3101. Suggest you read the recent post entitled "initial road association meeting" for references on the "Warrant". Follow the statute closely.

    You may keep your non-profit corporation in place and add the statutory component by a majority vote of the owners present at the meeting or absent and voting by proxy or absentee ballot. You will remain a non-statutory, non-profit corporation road association failing majority approval of statutory governance. 

    Last modified: 11 Jul 2022 11:16 AM | Anonymous member (Administrator)
  • 12 Jul 2022 1:48 PM
    Reply # 12846203 on 12843758

    Wow so Statutory statis can actually be voted down at the first meet. I guess that make sense anything can be voted in or out. I guess that is why the statute says at least 3 of 4 owners. I is assuming you have the majority or why would you even attempt it.  I am having a debrief with the board in a week or so to figure it out

    Thanks

    Scott

  • 13 Jul 2022 2:55 PM
    Reply # 12847541 on 12843758
    Anonymous member (Administrator)

    I thought I had put in an answer to this one, but I don't know where it went, so I'll try again.  I have seen a few cases where an informal road association had been working well for years, but an attempt to convert to statutory met with surprising hostility.  My guess is that landowners may think it will mean more government regulation, or being strictly bound by statutes they don't understand.

    My suggestion would be to point out that unlike a non-profit corporation road association, a Statutory road association does not have to register with the State, or with anyone else, for that matter.  Also, give them copies of the statutes, which allow a tremendous amount of flexibility.  For example, the members can decide whether or not to have bylaws, whether to have a Board or just a Road Commissioner, and what constitutes a "fair and equitable" distribution of costs.

    Another benefit is that you can specify in your bylaws what sections of road the association will maintain.  This could protect you against having to take on the cost of maintaining side roads in a subdivision that didn't exist when you formed the association.   Yet if landowners on the side road benefit from use of the road you DO maintain, they would be required to be members and pay a fair share for their use of your road.  Also, the statute protects you from having some members who want the road paved show up and vote to raise everyone's dues several times over to cover the expense.

    As to whether or not the landowners can vote NOT to form an association, that would be a good question for the attorneys that speak at our annual conference.  On looking at Atty Mary Denison's sample Warrant for 1st Meeting, available on the MARA Resources page under paragraph 7a, I don't actually see an article to vote on whether or not to form an association.  I guess the members could just vote NO on all the articles to elect officers and approve the budget, and that would have the same effect as voting not to form a road association.

    Last modified: 14 Jul 2022 5:37 PM | Anonymous member (Administrator)
  • 14 Jul 2022 7:40 AM
    Reply # 12848368 on 12843758
    Anonymous member (Administrator)

    It seems there is no requirement in the Statutes, 23 MRS, sections 3101-3104 to vote by majority to form a road association. Dissolution of the association, however, requires a majority vote. Somewhat inconsistent in my view! 

    As it stands, I agree with Roberta, a failure of the majority to pass all items listed in the initial meeting agenda (the "Warrant") would prevent the formation of an association. 

    I'd be interested to know if all items in the Warrant are "essential" and require owner approval to form an association. Section 3101 (5) states that the owners "may choose a commissioner or board". Does that mean also that they "may not choose..." and decide to stick with a majority vote of the owners on the issues voted to approve? I'd like to hear from an attorney on this.

    Last modified: 16 Jul 2022 4:47 PM | Anonymous member (Administrator)

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