Declarant stops lawn care that is paid for in assessment

I’m in a NC development under Declarant control until 2015 or until no Class C members. I’ve attached a section of our governing documents outlining membership and voting rights. There are three neighborhoods in the development that share common amenities being a 10-acre pond, clubhouse and pool. Total build out is 130 residences of which there are 45 completed now, several are in foreclosure. Two of the neighborhoods have SF homes and the third has SF and 2-unit TH. The neighborhood with THs has higher annual dues that include lawn landscape maintenance of their individual lots.

We have had numerous problems including a tax bill that went into collections for our pond, pool and clubhouse that has not been deeded to the HOA. The problem looming in front of us now is that the lawn care company has not been paid and will no longer care for the lawns in the neighborhood where this is part of the assessment. They are owed for 18 months of service that included the lawns for the one neighborhood and common areas for all three neighborhoods. In 2011 the Declarant decided his staff from another business would care for the common areas and he would contract with the same lawn care company for the private lawns, but through a contract listing him personally and not the HOA. He paid three months. The lawn care company owner felt sorry for the residents and continued to only mow the lawns the remainder of 2011. So our services were minimal. Now the lawn care company said they will not maintain the lawns unless they are paid for the 18 months and the remainder of the contract for 2011 which is understandable. An agent for the Declarant suggested at our annual meeting that “we” contract individually for the lawn care and have an amendment drafted and approved by an attorney that he would present to the Declarant. If the Declarant agrees, we can have it recorded and that will release us from that portion of our assessment.

Most of us that bought in this particular neighborhood did so to ensure all lawns would be cared for and with the same frequency. It would be nice to try to maintain at least a small portion of the integrity of the concept we were sold. I don’t see any way that a group can force all of the owners in this neighborhood to participate and use the one vendor. The vendor’s rates are very competitive based on doing all of the lots in the neighborhood on one day vs. coming to do one home at a time.

I’ve thought of drafting an amendment and presenting it to the other owners that would make this a temporary situation until January 1, 2016 when the management of the lawn care would fall back under the responsibility of the HOA and the assessments would increase accordingly. The amendment would specify that all owners must use the existing vendor and agree to pay in 6month installments that would go into an escrow account. (The lawn care company doesn’t want to deal with tracking down payments from 19 owners. We would pay monthly.) If this was accepted, would the management company be able to enforce it? Another issue is that of the homes in this neighborhood 1/2 were to be TH, but now there will only be the 8 that are built. In the covenant for maintenance assessments it states that the lawn maintenance will be provided at a uniform rate of charge without regard to the actual cost of maintenance of the landscaping of each lot. It was a somewhat unfair distribution when there were to be 24 THs picking up the slack for the much larger SF lots, but now with only 8 TH, this would be a good time to make this a two-tier structure. TH actual charge is approx. $25/month, SF home is approx. $35/month and the additional amount in the assessment to this neighborhood is $42/month. If the amendment is not written and recorded, the residents will be obligated to pay the lawn care portion of the assessment and pay privately for lawn care.

1) I would appreciate any advice on what can be done about this situation and effective ways to work through it?

2) Would someone interpret the attachment for me? It appears to me that we have Declarant control until all lots are sold. Can the Declarant change this date the same way he has changed most everything else in the governing documents, though without amendments?

3) I have met with our County manager and Board of Commissioner about other issues before this one arose, only to be told any problems would have to be handled through a lawsuit. Our development is annexed to a town for water and sewer that is in the adjacent County. Building permits, zoning is in One County and our documents are recorded in another. Where else could we go for help other than a courtroom? Money is not plentiful with this group of owners and no one is willing to put out money for an attorney.

4) Talking with the Declarant isn’t an option. There have been financial problems since day one (started building in 2006). The Declarant is a LLC with three people who had little or no experience starting developments. I can only assume that when the housing market was strong they assumed they could get a piece of the action. One person is now deceased and the other two have had a falling out leaving only the one dealing with us through the management company. But that is not even a direct line of communication. The Declarant has not delivered services to the community and will not communicate in any manner with the residents.

5) I’ve seen posts where residents pay HOA assessments into an escrow account and do a ‘coup’. Can this be done when under Declarant control? If so, what are the dangers?

6) The community manager is also threatening to drain the pool this year and not keep it open.

Everyone would like to sell and get out of Dodge. Our homes are worth about 65% of original value and the property is very unattractive due to the lack of landscaping and maintenance. We are trying to make the best of a bad situation, but need help with our options.

Sorry for the length of the post, but we have a lot going on.

Yeah - you do have a lot going on, but the big issue is that the bills don't seem to be getting paid.

I would not let this declarent weasel out of his reponsiblity to do uniform maintenance on the lawns.

Since you don't have a "turnover" then you could sue him for not providing what was promised in the purchase agreement. If he gets sued by several indivuduals, that may move him to do something.

Time to take this guy to court.

Hi Joan:

The first thing I will recommend is to purchase a large binder and dividers. Make an extra copy of your Declaration, Amendments (must be filed with local County Recorder, in fact go to your local website, enter your HOA, and make sure you have copies of all documents currently filed), Bylaws, Articles of Incorporation, and copy of your State Statutes for Planned Communities (http://www.ncleg.net/gascripts/statutes/StatutesTOC.pl?Chapter=0047F). Then take a highlighter (mine is orange for Declarant) and highlight all items regarding Declarant and where the developer reserved any “Special Declarant Rights”. Knowledge is power!!! Per your state statutes special declarant rights are:

§ 47F 1 103. Definitions.

(28) "Special declarant rights" means rights reserved for the benefit of a declarant including, without limitation, any right (i) to complete improvements indicated on plats and plans filed with the declaration; (ii) to exercise any development right; (iii) to maintain sales offices, management offices, signs advertising the planned community, and models; (iv) to use easements through the common elements for the purpose of making improvements within the planned community or within real estate which may be added to the planned community; (v) to make the planned community part of a larger planned community or group of planned communities; (vi) to make the planned community subject to a master association; or (vii) to appoint or remove any officer or executive board member of the association or any master association during any period of declarant control.

Most important aspect at this time is to know all your governing documents well and be aware of what the developer can and cannot do as stated in the documents. Also, I recommend during the period of declarant control that at least every month or two be sure to check with the local County Records to keep an eye out for any amendments which may have been filed and which the owner’s may not have been notified. Your state statutes require that any challenge to an amendment MUST be made within one year after the amendment is filed.

Now as to your questions:


You are correct the developer has control until either December 31, 2015 OR until after there are no Class C Members whichever occurs first.


The Declaration is a private contract. The local government will not get involved regarding items contained in the Declaration. However, check with them and get copies of any a.k.a. Site Improvement Agreements or other documents which they have with the developer. They can enforce any provisions contained in that document. Also, if that document contains provisions that the Developer must carry insurance, make sure they have not let said insurance expire because of financial situations.

This is where you will need to check your governing documents and State Statues. Some documents or states have arbitration provisions while others the homeowner must consider civil court. The owners need to know their documents and assess their rights and declarant’s rights, then determine how not taking action could affect them monetarily. For example in my subdivision we had two developers conspire and illegally amended our Declaration. The amendment would potentially reduce the already constructed home values by up to $100,000 each. After determining according to our governing documents and the state statutes that we had a high probability of winning a lawsuit we felt that paying for attorney and court (with potential of being reimbursed by declarant … if we win) was a better choice than large reduction in our property value.


Keep an eye on the Tax Assessors website regarding the undeveloped lots and whether taxes are up to date or if bank may now own and watch the foreclosures. If the developer is having financial issues this is where you can get a heads up regarding the subdivision.


Not sure what you are referring to as ‘coup’. In some instances individuals when they purchase a home can elect to have both their property insurance and HOA dues paid through their escrow accounts. The escrow account collects from homeowner and then pays the monies to the appropriate agencies.


Depending on what is stated in your governing documents this may be illegal.

Keep in mind you are not only covered by the Plannned Community statutes but also contract statutes, association statutes, and other various statutes. If your owners decide to pursue the developer also consider the Tort laws such as consumer protection, fiduciary duty, principles of equity, etc. The sale and purchase of goods including property is covered under consumer protection. In short the Declaration is to include items a developer reserves as having the right to maybe change and to change other items not reserved must follow proper procedure and benefit all properties equally. A general rule of thumb is the developer can change anything prior to selling any property to a consumer, once he sells to a consumer the Declaration then somewhat becomes an “implied and expressed” warranty for consumers to depend upon regarding the development plan and to protect their investment.

§ 47F 3 111. Tort and contract liability.
(a) Neither the association nor any lot owner except the declarant is liable for that declarant's torts in connection with any part of the planned community which that declarant has the responsibility to maintain.
(b) An action alleging a wrong done by the association shall be brought against the association and not against a lot owner.
(c) Any statute of limitation affecting the association's right of action under this section is tolled until the period of declarant control terminates. A lot owner is not precluded from bringing an action contemplated by this section because the person is a lot owner or a member of the association. (1998 199, s. 1.)