Declarant and Turn Over Responsibilities

Hi Norm … Welcome to the forum.

Here is a link to your state statutes:
http://www.azleg.gov/ArizonaRevisedStatutes.asp?Title=33

I would recommend at turnover that the homeowners obtain or at least consult with an attorney to insure everything is in order. The intent of an HOA is that all costs are split and allocated to each unit. Under Planned Community statute definitions it makes reference to this fact especially under #4 below if you are a Planned Community.

33-1802. Definitions

In this chapter and in the community documents, unless the context otherwise requires:

1. "Association" means a nonprofit corporation or unincorporated association of owners that is created pursuant to a declaration to own and operate portions of a planned community and that has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association's obligations under the declaration.

2. "Community documents" means the declaration, bylaws, articles of incorporation, if any, and rules, if any.

3. "Declaration" means any instruments, however denominated, that establish a planned community and any amendment to those instruments.

4. "Planned community" means a real estate development which includes real estate owned and operated by a nonprofit corporation or unincorporated association of owners that is created for the purpose of managing, maintaining or improving the property and in which the owners of separately owned lots, parcels or units are mandatory members and are required to pay assessments to the association for these purposes. Planned community does not include a timeshare plan or a timeshare association that is governed by chapter 20 of this title.

In AZ it does not reference much under Planned Community statutes regarding Declarants; however, the Condominium statutes do … but it could depend if the courts will reference items between each of the entity statutes.

Condominium statute states:
33-1217. Allocation of common element interests, votes and common expense liabilities
A. The declaration shall allocate a fraction or percentage of undivided interests in the common elements and in the common expenses of the association, and a portion of the votes in the association, to each unit and state the formulas used to establish those allocations. Except as otherwise provided in this chapter, the allocations shall not discriminate in favor of units owned by the declarant.

33-1244. Transfer of special declarant rights
A. A special declarant right created or reserved under this chapter shall not be transferred except by an instrument evidencing the transfer recorded in every county in which any portion of the condominium is located. The instrument is not effective unless executed by the transferee.
B. On transfer of any special declarant right, the liability of a transferor declarant is as follows:
1. A transferor is not relieved of any obligation or liability arising before the transfer.
2. If a transferor retains any special declarant right, the transferor is liable for any obligations or liabilities imposed on a declarant by this chapter or by the declaration relating to the retained special declarant rights and arising after the transfer.
3. A transferor has no liability for any act or omission or any breach of a contractual or warranty obligation arising from the exercise of a special declarant right by a successor declarant.
C. Unless otherwise provided in a mortgage or deed of trust, in case of foreclosure of a mortgage, tax sale, judicial sale, sale by a trustee under a deed of trust, forfeiture of interest of a purchaser under a contract for conveyance of real property or sale under bankruptcy code or receivership proceedings, of any units owned by a declarant or real estate in a condominum subject to development rights, a person acquiring title to all the real estate being foreclosed or sold succeeds to all special declarant rights related to that real estate held by that declarant whether or not the judgment or instrument conveying title provides for transfer of the special declarant rights.

Again, I would recommend having a consultation with 2-3 attorneys. Many sometimes will offer a free 20-30 minute consultation and can help to determine how best to proceed. Also, this will give you a potential idea on which might be the brightest, if needed for the turnover. You potentially would need one knowledgeable regarding Contracts as that will be the items at issue between the homeowners and the bank.

You are most welcome ... we are all here to help each other, if possible.