Is the Developer Committing Fraud?

Started by MargoT • 3 replies • 1617 views

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MargoT (Georgia)
Posts: 80

Posted:

We have a small community/30 homes which is Developer Controlled. The Builder/Developer, Realtor and the ONLY HOA officer has refused to provide a budget, hold an annual meeting or discuss the reserve fund for Years! Yes, years.

If we persist; he becomes missing in action and blatantly refuses to communicate. Some - not all homeowners pay monthly association dues and he has permitted this – got mad and won’t communicate with them! HOW can this Developer/HOA Officer get away with this? In my personal opinion, this is outright fraud!!

Please don't respond and ask me what the ccr's state regarding the turnover, etc., the man gets mad and won’t communicate with anyone for months. He lives in another town which is convenient for him to hide from our questions.

He has abandoned us! I have only lived here 2.5 years and was curious what he did with my/our money. I spent some time at the local court house and discovered that he didn't pay tax on our common areas for 2010, has two active lawsuits in another county where he lives and recently settled a previous lawsuit.

Our annual lawn maintenance contact suddenly "deceased" March, 2011 because he breached the contract. He is missing again. He has blatantly refused to communicate with any home owner. What can we do?

Some of the older homes will need a new roof or maintenance someday. If there is $0.00 in the Reserve Fund, the special assessment for eight roofs and/or maintenance, painting will bankrupt the rest of us.

Some of us have gotten free legal advice. It will cost us dues paying home owners $$$$$ to sue him to take over our hoa. How can the law appear to be on his side if he is violating every ethic against the home owners? Is the home owner association laws written for us or the attorneys? The home owner associations must have legal laws against his behavior and fraud.

Can we home owners file actual “fraud charges” against him in the county where he lives? Your advice will be greatly appreciated!

GlenL (Ohio)
Posts: 5,491

Posted:

Can we home owners file actual “fraud charges” against him in the county where he lives? Your advice will be greatly appreciated!
Since you have access to free legal advice, they would be the ones to ask if it is fraud.

I'm sorry you don't want us to ask about turnover but it is important, somewhere in the CC&R's will be the percentage of homes that must be sold or the time limit before transition. Since you are worried about roofs, I assume you are a condo or townhouse development. As to the laws he may or may not be violating, most if not all of them will require you and/or your neighbors to sue him in civil court to force compliance.

Studies show that 5 out of 4 people have problems with fractions

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Margo:

Are you condominium or single family homes? Per your comment it appears you might be condos (because you mentioned roof replacement), but I want to make sure.

You should have a copy of your governing documents given to you when you purchased. I also recommend that you go to your County Records either physically or via website and make sure you have the most current documents available regarding your association. Make an extra copy of your documents and put into a binder. Then read them and highlight what the declarant/developer is suppose to perform and any rights they may have regarding the association. These documents will also let you know for sure what the period of declarant control is regarding turnover. This is one of the main questions you need to find in your governing documents along with my question above for us to potentially help out in the situation.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Hi Margo,

I suspect you won't like the answers as the bottom line will be the advice the lawyer gave you. However, I would like to respond to the questions you asked in a hope to increase the understanding of the issues:

How can the law appear to be on his side if he is violating every ethic against the home owners?

The law will look at the terms of the contract entered into. This contract would be your CCRs. Since contracts are civil matters vs. criminal matters, the courts will only get involved if a party of the contract files legal action.

Unfortunately, what is typically considered ethical isn't always legally required.

Is the home owner association laws written for us or the attorneys?

As I understand it, HOA laws are typically written to clarify issues and try to find an equitable way to address the issues. The laws vary widely by State. Most do seem to support the rights of the Association over the rights of the member but those rights are usually agreed to within the CC&Rs.

Being civil law, the courts usually won't become involved unless someone files legal action.

The home owner associations must have legal laws against his behavior and fraud

From what you posted, and expecting that you have the documentation to support what you posted, I suspect that you would in a court of law and control of the Association would be given to the membership.

Again, since States consider this civil issues and not criminal, it will require that you bring legal action. Sometimes, the courts will award legal fees and court costs to the winner.

I hope this helps. I do understand your frustration.

Tim

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