HOA Transition from developer

Started by KimY • 4 replies • 2813 views

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KimY (Georgia)
Posts: 2

Posted:

We just got word that our developer is handing over the HOA responsibilities to the residents. We were told that the transition was to happen by Sept 1, 2001 which is only 2.5 weeks away. Residents are panicking because this is an unfinished subdivision with a number of vacant lots. I realize we need an attorney but I'm not sure who I need: someone with contract experience or someone else?? I've seen a few posts about what is recommended to be received from the developer but am worried that we are going to get the shaft and be totally unprepared for this transition. We don't know our rights and I need to find resources to help us through this transition. Any advice is welcome, we need all the help we can get. I live in Bartow County Georgia. Thanks all!

DavidW5 (North Carolina)
Posts: 565

Posted:

It will help us to provide advice if we know a bit more about your situation:

Who are the current board members; developer only, some developer folks and some appointed homeowners, some elected homeowners?

When will elections be held?

Are there any existing committees?

Are you a board member or just a concerned homeowner?

Have you read your governing documents to see what they have to say about transition, what documents the developer is to provide, etc.

Is there an association attorney selected by the developer?

Have there been any audits or the association's finances conducted? When was the last one?

Is there a management company?

Transition is not an instantaneous event but is a process that will play out over an extended period of time. In my HOA the developer turned over control and we had our first elected board in May of 2010. We just, this past week, completed negotiation of a financial settlement with the developer over uncompleted and/or defective work. It will take us another year or two, using those funds to fix things that the developer left undone.
So don't panic. Everything does not have to be done by Sept. 1st.

KimY (Georgia)
Posts: 2

Posted:

My reply:

Who are the current board members; developer only, some developer folks and some appointed homeowners, some elected homeowners? *The current board members are the developers consisting of 3-4 men. We do not have anyone in the subdivision elected yet because we didn't have full capacity so the developers have been handling all the HOA duties.

When will elections be held? *We are currently trying to get a letter from the developer announcing this transition so that the other homeowners are aware; not everyone in the subdivision is on our email list so we need something in writing. Once the letter is distributed we will then have a meeting to try and identify those individuals.

Are there any existing committees? *No

Are you a board member or just a concerned homeowner? *VERY concerned homeowner

Have you read your governing documents to see what they have to say about transition, what documents the developer is to provide, etc. *Have not had time yet to review these documents since we were just told about this the other day. I was hoping someone might be able to point me in the direction of what GA law requires in a situation like this. It would seem to me that this type of transaction just can't be "passed on" without proper legal paperwork or can it??? I spoke to the developer personally and he told me, quote unquote, "This is no big deal! Just a few bills that need to be paid." He thinks he's dealing with a bunch of idiots so I'd like to prove him wrong by being prepared with every legal thing I can.

Is there an association attorney selected by the developer? *I have no idea about an attorney although this developer is very well known and owns more than half the town I live in. It would be in our best interests to find a completely neutral party from another city to handle our issues.

Have there been any audits or the association's finances conducted? When was the last one? *To my knowledge there have been no audits but they don't tell us anything. We haven't seen a financial statement in 2 years and even then it was so basic and rudimentary that we didn't get the full scale of the bills.

We are concerned about a number of things and we do NOT want to be strapped with any issues that should have been taken care of by the developer.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You need a lawyer familiar with CONTRACTUAL/CORPORATE laws. There are some who "specialize" in HOA laws, but they are more expensive. A good start would be to go to Staples, Office Max, or other office supply chain to look up some documentation. They have a section for "do it yourself" for lease agreements and such. In that area, there should be "Article of Incorporation" and other relevent documentation for an HOA. This is just a building block. Some come with CD's and adapt to various laws of each state. The costs are only about $20 for the CD and paperwork. May be able to find it online.

I'd also get a copy of your CC&R's from the courthouse record's department. Have a meeting with the owners to review. Then start discussing the issues you want in or out. Get a redline copy going. You may want to do some basic redlining with references to the developer removed, the two system voting system because of the developer removed, technology changes (Ie satellite dishes, green energy etc), and other small routine changes. I'd also consider reducing the number of votes it takes to ammend these documents in the future. Some can require up to 90 - 100% membership votes. An impossible task for most HOA's.

It's best to get a committee started now and start reviewing. Please feel free to come here and ask questions. Many here can help you and put you on the right track. If we don't start in-fighting ourselves...LOL!!!

Former HOA President

RogerB (Colorado)
Posts: 5,067

Posted:

Kim, the attachment to this note may help when the homeowners chose to accept the transition.

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