Transition from Developer

We are currently in the transition from developer to homeowner. I live in PA is a 40 townhome development gated community (gates are included in the developer's security being held by the townhip gates have never operated since the development was built in 2006). Recently we had an independent engineer inspection as well as a gate study performed.

We are still awaiting the results of the engineering study, however, the gates study has come back with major code violations. The gates were also fabricated from scrap metal from the developer. The Board asked the gate company to rework their estimate as the first estimate was very high. We gave them some suggestions and they reworked the estimate, however, it will still cost $90,000 to install proper gates (two entrances) and to bring the gates up to code (which includes underground wiring, etc.).

The Board has had several meetings with the township and developer. The township is holding $70,000 of the developer's security which can be released on July 24, 2012. The Township came to the development about two weeks ago and did a "five minute" inspection. One of the Board memebers was home and spoke with them. He also pointed out a hole in our roads (which are private) and the engineer said he would come back to mark it which he never did. The roads were completed before the builder completed construction and heavy equipment was on our roads for months.

We felt that the Township was on our side until yesterday when our attorney contacted the Township solicitor and he said that here is only $1500 in security on "this line item" meaning the gates. At this point we are not certain our HOA attorney is on our side as he is suggesting a special assessment to the homeowners, compromise with the developer or go into litigation (which will cost a fortune).

The Board does not want the Association to be stuck with this expense and inadequate gates after transition and feel that the Township should force the developer to correct the gate violations or not return his bond. We still don't know what deficiencies the engineer report will show.

One of the Board members wants to go to the newpapers on this, however, I don't know if that is the answer. The bottom line is that development was approved by the Township as a two gated community and they gates were included in the security. The gates were fabricated by the developer (which are substandard and violiate code) These inadequate gates (not meeting) code were approved by the Township in 2009, however, they never were operational. The Township is not going to admit they approved substandard gates that violate code!!!

I am the President of the Association and feel that the Board needs to act on this and act quickly. Any guidance would be appreciate.
thank you,
Maureen

If the choice boils down to having the owners cough up $90,000 or suing the developer and/or township to force them to bring the gates up to code, I would head for the courthouse in a heartbeat.

There is no excuse for the developer trying to foist off a bunch of inoperable scrap metal as a substitute for the gates that the township approved. Since the developer marketed the homes as a gated community, it is possible that each and every homeowner may be able to bring suit against the developer as well. Potentially the developer faces 41 lawsuits (40 individual owners plus the association).

Going to the media is a crapshoot but nothing ventured, nothing gained. My experience is that everyone has their own battles to wage and they are unlikely to fight mine for me.

Bringing this to the attention of the township board is a good idea. Chances are good that the staff has not made the board aware of this issue. You would be best to wait until you have the engineer's report in hand as right now it's your word against the person that the township has entrusted to inspect and approve building projects and you can pretty much predict who will win this one.

They are private roads, and no the homeowners are not in favor of NO GATES. The builder advertised the development as gated and that is what the homeowners purchased into to. Right now the townspeople use our development as a thoroughfare from one end of town to the other. We have PRIVATE ROAD and NO TRESPASSING signs at each entrance and that does not deter non residents from racing down our main road and out the other end of the development.

The Township approved the development as a gated community on private roads. We have been paying for the maintenance of these roads for six years not the Township and after transition the responsibility of maintaining the roads continues to be on the Association.

The homeowners will not accept a non gated community.

Maureen

Is there some action that can be done to delay the release of the Developer's security deposit?

Was your lawyer saying that the developer is getting all of the deposit except for the Gates line item?

What was the conclusion of the Township inspection regarding the gates? Can you find allies on the township leaders?

Not crazy about your lawyer. He provides information, but doesn't seem to be advising you much. Given the clarity of what you guys want, I would expect the HOA legal expert to provide a bit more direction. (I don't think it took much legal training to determine that your options were pay yourself, work out something w/ developer, sue)