Removing a Builder from control of the HOA

Hi Jason:

Do your documents just reference “developer” or “declarant” or do they reference by persons name / company? Also, check with the bank and see if they assumed the developer control when they foreclosed.

Here is a Link to your state statutes:

And within these sections:

TITLE 44. PROPERTY
CHAPTER 3. REGULATION OF SPECIALIZED LAND TRANSACTIONS
ARTICLE 6. PROPERTY OWNERS' ASSOCIATIONS

Some of the information will be contained in your governing documents. You need to be sure and sit down with an extra copy of your documents. Take a highlighter and highlight (i.e. orange) developer rights and (i.e. yellow) homeowner rights. Put this extra copy of all your documents in a binder with tabs separating Article of Incorporation, By-Laws, Declaration, Plats, etc. You will need this information. I also have a copy of the State Statutes in my binder and which I have highlighted certain sections for easier reference.

Then, in your documents determine what the qualifications are for the association board … the following statute could potentially come into play.

§ 44-3-229. Persons deemed to be "lot owner."

If the instrument provides that any member of the board of directors or any officer of the association must be a lot owner, then, notwithstanding Code Section 44-3-221, the term "lot owner" in such context shall, unless the instrument otherwise provides, be deemed to include, without limitation, any shareholder, director, officer, partner in, or trustee of any person who is, either alone or in conjunction with any other person or persons, a lot owner. Any individual who would not be eligible to serve as a member of the board of directors or officer were he or she not a shareholder, director, officer, partner in, or trustee of such a person shall be deemed to have disqualified himself or herself from continuing in office if he or she ceases to have any such affiliation with that person.

If the developer no longer has control at all you may need to get all the current owner’s together and hire an attorney to possibly at least send a demand letter to the developer for the association records and monies. If the bank assumed control, then potentially they should be able to obtain.

This will at least give you a start.

Thanks Janet. I will look through the covenants. We're hoping that we don't have to sue because we're talking about a small amount of $$ ($350 a year per home), we actually just want somoene who will keep up the common areas and aren't very concerned who it is.

The old developer wants to use the HOA as leverage over the new builder because he says it gives him architectural control