developer taking advantage

Our subdivision was recently turned over to the HOA. The developer still holds 60 lots out of 749 in the community. Our yearly assessments are paid in January. This first year the developer paid assessments on all of his lots, however he now says that there is a line in the CC&R's that will allow him to "opt out" of paying dues for the next two years. There is a line that states that "any owner of more than 2 lots are exempt from assessments for two years" Our CC&R's were written in 1997 when the subdivision was incorporated--wouldn't this exemption have been in the beginning of the subdivision getting started to encourage builders to buy the lots. Our lawyer says she believes that was the intent but that since the developer wrote the CC&R's he could testify that that was not his intent and that he can choose whatever year he wants for this exemption. We had started the process to amend the covenants and remove this line along with other things but he notified us now that he would be taking his exemption in 2011 & 2012 regardless of whether we change the covenant or not. Can he do that?

Have you all been paying assessments in the past?

If so, how do you know that the devloper didn't take advantage of this loophole long ago? It does not say WHICH two years the owner would be exempt.

Seems funny he would wait until the takeover to get out of paying his assessments.

Could anyone ELSE take advantage of this opt-out of dues?
That sentence seems so out of whack for an HOA. It is developer-friendly, only. So get it out of the CCRs - ASAP.
Call a special meeting, if needed. Everyone should be considered equal.

Sharon, don't forget the mortgage holders when you change your Covenants. Somewhere in the CC&R's under how to amend the documents should be notification and approval of the mortgage holders. Ours (Ohio COA) states that even if the mortgage holders don't approve the change is still valid and enforceable with the homeowner. (emphasis added)

Amendment of Declaration and By-Laws.

This Declaration and the By-Laws attached hereto as Exhibit C may be amended upon the filing for record with the Recorder of County, of an instrument in writing setting forth specifically the item or items to be amended and any new matter to be added, which instrument shall have been duly executed by the Unit owners entitled to exercise at least seventy-five percent (75%) of the voting power of the Association. Such Amendment must be executed with the same formalities as this instrument and must refer to the volume and page in which this instrument and its attached exhibits are recorded and must contain an affidavit by the President of the Association that a copy of the amendment has been mailed by certified mail to all mortgagees having bona fide liens of record against any Unit ownership. No amendment shall have any effect, however, upon a bona fide first mortgagee until the written consent to such amendment of such mortgagee has been secured. Such consents shall be retained by the Secretary of the Association and his certification in the instrument of amendment as to the names of the consenting and non-consenting mortgagees of the various Units shall be sufficient for reliance by the general public. If less than all mortgagees consent to an amendment to this Declaration and / or the By-Laws attached hereto as Exhibit C said amendment or modification shall nevertheless be valid among the Unit Owners, inter sese, provided that the rights of a non-consenting mortgagee shall not be derogated thereby. No provision in this Declaration or By-Laws attached hereto as Exhibit C may be changed, modified or rescinded, which, after such change, modification or rescission would conflict with the provisions of Chapter 5311, Ohio Revised Code, nor may any amendment be made to the percentage interests set forth in Section 3.3(B) without the prior unanimous approval of all Unit owners and their respective mortgagees, except as provided in Article of this Declaration.

You should also check your governing docs to see if you can change anything that affects the developer. Our master assoc. docs have provisions that state even when the assoc. is turned over to the owners, as long as the developer owns lots no amendments may be made that affect the developer, including but not limited to, lot dues, signage restrictions, and exemption from restructions.