Can Banks be the Declarant(s)?

Hi all,

Developer lost neighborhood and empty lots are now in the possession of 3 different banks. Trying to get control of the management company contracted by bankrupt declarant, was wondering if banks have votes as our new declarant(s). Our covenants are vague on the description of declarant...

What can the board do to take control of the neighborhood management service, and the management company resists because they stands to lose their contract with our community once we have control?

Thanks in advance

J

Hi,

The management company the developer/declarant contracted to handle the neighborhood is, and has been paying the landscaping, utilities, etc.. through the use of our HOA dues.

Our neighborhood is about 20 percent occupied and we want to take over the management of our HOA, but we are not at that point in our Covenants to "technically" do so until the neighborhood is 75% occupied, or without the approval of the Declarant.

The management company we have is terrible, we need to fire them. but the Declarant has lost ALL of his lots to the bank, and other investors lost theirs too. So now we don't know who is the official declarant since there's 3 banks holding large amounts of property in our neighborhood.

JB7

JB,

usually the mortgagee with the highest aggregate mortgage on the property would be in charge. Can you access the public records to get a feel which bank it could be and talk to their mortgage department?

That's a good point. I was reading on forum that the declarant title could be signed over to the bank with the most lots.. We're checking that Thursday.

JB

JB - I think you need to consult an attorney experienced in community association practice in Georgia. As I think this through it seems likely that:

1). The original declarant was probably a legal entity such as an LLC or corporation or other registered business in the state.
2). The fact that the declarant has gone bankrupt and lost its assets doesn't mean that the legal entity has ceased to exist (I don't think?)
3). I'm not sure that the transfer of the declarant's assets to its mortgage holders automatically conveys the role of declarant to those entities that assumed control of the assets.

Frankly, I'm just not sure how this would play out . . . . which is all the more reason to consult the attorney.

I based my statement on this from the original poster:

"Developer lost neighborhood and empty lots are now in the possession of 3 different banks."

A reasonable person can only assume from this that the banks foreclosed on the properties and while it's certainly true that this doesn't automatically translate into declarant bankruptcy, the OP then goes on to say, "Trying to get control of the management company contracted by bankrupt declarant" which suggests that he knows the declarant to be bankrupt.

So I'm at a loss as to why you called my statement "off the wall"?

Petunka -

I think you may be missing the point. Foreclosure on the properties should have absolutely nothing to do with the fundamental question - who is the declarant?

If, in fact, the declarant was the developer's company, my point was that unless the company was dissolved, then it arguably remains the declarant.

However, I'm not an attorney and am not sure that holds true - which is exactly the reason that I recommended the OP to consult a Georgia attorney experienced in community association practice.

To clarify, the lots the Declarant owned ARE lost to the bank. They are foreclosed upon. In regards to the "bankrupt" wordage I used, the developer/declarant is out of business so one would assume (and I know about "assume") that the guy ran out of money, hence "bankrupt".. Hope this helps.

PS. The services of lawyer is part of our plan, we're just doing some research ourselves. Once we figure out who the Declarant(s) are, we can then save the cost of having to do needless title searches on every lot.

Thanks for the replies!

JB