Declarants rule

Hello , I would like to ask the question about Declarants, I understand if they have sold 90 per cent of their property they are no longer a declarant, can you help with this???

If you are in a Condominium here is the statute:

33-1243. Board of directors and officers; conflict; powers; limitations; removal; annual audit; applicability

E. The declaration may provide for a period of declarant control of the association, during which period a declarant or persons designated by the declarant may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of:

1. Ninety days after conveyance of seventy-five per cent of the units which may be created to unit owners other than a declarant.

2. Four years after all declarants have ceased to offer units for sale in the ordinary course of business.

It does not state it in the documnts, I was wondering if there is a law regarding this???

Mary,

There is a difference, granted minor, in the declarant being in control vs. the declarant having the majority votes.

In one, being in control, the Declarant has complete control of what happens on the property. The Declarant appoints the Board of Directors, etc. The homeowners have no say.

In the other, have the majority votes, the homeowners are in control of the Association and Directors are elected by the membership. In your case the membership has two classes of voting rights, the owner and the Declarant. So if there are 100 lots, 75 of them are sold and 25 are owned by the Declarant, the Association, if a condo, must be turned over to the membership. However, since the Declarant has 10 votes per lot, the declarant would control the vote until 91 homes have been sold (as it would be 91 homeowner votes to the declarants 90 votes).

Like I said, it's not much of a difference. More of a legal technicality.

Hope this helps.

Tim

Thanks Tim, In 2008 he declared he was no longer a declarant because all properties had been sold, in 2009 he came back and said he was because 200 lots had been defaulted on, but that is less than the 10 percent he needed, we are 2800 strong, which means he would have to have over 280 properties to maintain declarant staus if the law states 90 percent sold.
Now it is also my understanding that once he sold those properties he could not hold that declarant rule because it would be the same if a bank had repossed them, once owned and dues paid they would have to continue to be paid, he pays nothing.

thanks

Thanks Janet, but we own 40 acre parcels of land. All these parcels have been sold at one time now he has 200 out of default, which would be the same as if a bank repossed them, once dues are paid then they must continue, but he pays nothing. I am in Az, allot has been done to improve our laws, but they are still pretty vague on this issue. I guess I am looking for any help, maybe a federal law???
Thanks

Hi Mary:

Per your statement:
“It is stated in several laws that as each phase of a development is finished, that the developer no longer holds these rights.”

Can you post the statute numbers?

I will review the statutes to see what I can find regarding this issue, and any others you may post. In the meantime here is the difference between Declarant Control vs. Declarant Rights:

Declarant Control relates to the Declarant’s right to control the operation of an association by means of appointing members to the Board of Directors. The Declarant Control provision permits the Declarant to establish budgets, execute contracts, retain vendors, etc. This authority allows the Declarant to maintain costs related to the operation of the community.

Reserved Declarant Rights are rights that the Declarant may retain to ensure the community is completed. Reserved Declarant Rights typically include the right to annex additional property into the community, the right to expand the community, the right to amend the Declaration pursuant to reserved Declarant Rights, and the right to maintain sales offices, signs and perform marketing for the community.

Reserved rights do not expire upon the expiration of the Declarant Control period but, rather, may continue for a number of years after the Declarant surrenders control of the property.

I believe that according to your statements after 90 percent was sold the period of “Declarant Control” has ended. The problem is you have some declarants, especially if they still own property, tend to not peacefully relinquish proper control because they lose control of the association. In most cases this means where previously they did not have to pay association dues they now are just like everyone else and must pay up, so they fight to not lose control.

To get the names and addresses of the other homeowners you can go to your County Assessor’s site and look up the property addresses. These sites will usually list the Owner and the mailing address for sending their property tax bills. It will take a little leg work for so many parcels, but the information should be available.

Janet I do believe I read it in the .
Davis-Stirling Act

Thanks Mary

.
Article IV
Membership Voting
1. The Association shall have two classes of voting Membership, and at any meeting of the Membership called and held pursuant to the provisions of the Bylaws, each Member shall be entitled to one (1) vote for each Parcel owned by such Member (whether a Result of Survey Parcel or a subsequently Divided Parcel), except Declarant who shall be entitled to 10 votes for each Parcel owned.

when I stated 200 that was last year , this year he holds 142, we have 2800 properties.

I am still looking for the developer item I read, Thanks Mary

Termination of Declarant Control

6. Terminates declarant control of a HOA the earlier of two years after the last unit has been offered for sale or:

a) for a condominium or planned community with fewer than 400 units, 90 days after the sale of 75 percent of the units.

b) for a condominium or planned community with between 400 and 1,000 units, 90 days after the sale of 80 percent of the units.

c) for a condominium or planned community with between 1,000 and 2,000 units, one year after the sale of 90 percent of the units, other than those owned by the developer.

d) for a condominium or planned community with more than 2,000 units, one year after the sale of 95 percent of the units, other than those owned by the developer. (33-1243, D and 33-1809, A)

7. Removes existing standard of terminating declarant control the earlier of 90 days after 75 percent of units have been sold or four years after last offer of sale. (33-1243, D and 33-1809) This is the AZ Law

Did the #6 & #7 you noted above come from your CCR documents?

The reason I ask is because the references in parenthesis to 33-1809 do not reference anything regarding declarant control, it references:

33-1809. Parking; public service and public safety emergency vehicles; definition

No this is AZ Law

mary

Do you have the link you used regarding AZ SB 1368?

When I search what comes up is: http://www.azleg.gov/legtext/49leg/1r/bills/sb1368p.htm

Which relates to employment discrimination.

It is not AZ Law ... SB 1368 failed to pass the Commerce and Economic Development Committee through the House of Representatives:

http://www.azleg.state.az.us/legtext/45leg/1r/summary/h.sb1368_4-02-01_caucuscow.doc.htm

Here is the bill status overview:

http://www.azleg.state.az.us/legtext/45leg/1r/bills/sb1368o.htm

Let me look at some more info ... get back to you later.

I want to make sure what exactly is your concern? Because the homeowner's control the Board at this time.

If there are 5 Board members and the declarant is only one of them, then the homeowner's control the Board and can override the declarant's Board vote. Therefore, the homeowner's on the Board can fire the management company, if desired.

As long as the Declarant owns any properties he can run and be elected to the Board, even if the parcels are owned by his real estate company because he is the owner/officer of that company. Therefore, he would be the owner/representative of the parcels.

I might also add he gets proxies of those who do not live here, they don't have a clue whats going on.
if we can get a new board in, we can eliminate the proxies and have the assocation get his stuff in writing of what he owns exactly, because the management co says it is private.
Our main concern here is the roads, we have 500 miles of dirt roads that are horrible, the money is going out , but the work is not done. we spend a small fortune to have these roads graded and repairs, some roads are so bad without 4 wheel drive they can't get up their roads, and they are going down hill worst each year and it keeps costing more.

We had a road committe that was doing wonderful, the Declarant stopped it all.

Thanks mary

We get 5 votes for one parcel, as there are five positions on the board., that means one vote percel
he gets 10 x the 5 per parcel

I believe there might be some confusion going on at this time. Article IV which I assume is from your HOA documents states one (1) vote per parcel (except Declarant who gets 10 votes per parcel). However, for board members there is only one (1) vote per board member during board meetings. The only time the Declarant gets to use his 10 votes per parcel would be during anything the entire membership votes on and which would utilize the “per parcel” voting. Is there something else in your HOA documents where the (x 5) is stated?

Check your By-Laws to verify the voting method. Usually the Plurality Voting System is used and which is:

The plurality voting system is a single-winner voting system often used to elect executive officers or to elect members of a legislative assembly which is based on single-member constituencies. This voting method is also used in multi-member constituencies in what is referred to as an exhaustive counting system where one member is elected at a time and the process repeated until the number of vacancies is filled.

Each position is voted and filled one at a time and process repeated until all vacancies are filled. Therefore, for each position the Declarant would have 1,420 votes and homeowners 2,658. If you can get the majority of votes then you can keep him from being elected to the board.

I am not an attorney so as far as him withdrawing and reinstating himself as a declarant I have not yet found any statute regarding this issue at this time. Just from a layman’s point of view I would agree with what you stated that it would be similar to foreclosure and he just now is a regular owner same as everyone else; however, this is a question an attorney would need to answer.

If the majority of homeowners fill the board positions then they could opt to hire an attorney on behalf of the HOA to ask these questions and which would be paid for by the HOA. I would make sure it is a different attorney than the one who may have been consulted on behalf or used by the declarant. Seems I saw on a news article just a short while back that there is an attorney in Arizona who is trying to get better protection through legislature for HOA’s and homeowners. This is the type of attorney you need to consult one who is more of a constitutionalist and in favor of homeowner rights. Avoid any who primarily deal with developers.

Go to the County Assessors and obtain all the mailing addresses for the other parcel properties. Send them all a letter detailing the issues and request they give their proxy vote to you or mail back their ballots voting for other individuals and not the declarant.