Transition

Started by MaureenM1 • 4 replies • 1433 views

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MaureenM1 (PA)
Posts: 344

Posted:

this is not a new topic, however, I didn't want to add a reply to one of the existing topics since it may not be seen.

Our development is in transition. We hired an engineering company to perform and independent study (expense paid by the association). We are a board of five all homeowners.

Our board attorney informed the board that the engineering study is only for the builder, not the developer. The board was under the impression that the engineering study for deficiences applys to him as well.

The Township is holding a bond of approximately 70,000. The gates in our development do not meet code and are the responsiblity of the developer. The Township says its only holding 1500 on a line item for gates, however it will cost 90,000 to install gates that meet code.

Again, our attorney says that the bond being held is not for the developer but the builder. Doesn't sound right to the Board. Any advice would be appreciate.

Thanks,

Maureen

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You have to understand the relationship of the developer and the builder to the HOA. A Developer's purpose is they buy the land and then split it up into lots for builders to build homes on. So a developer may buy 100 acres, split it up in 100 1 acre lots and hire a builder to build the homes per design. The Developer also takes on the "salesman" role by setting up the HOA to attract buyers to those lots for sale. It happens that developers and builders tend to team up or are the same company, but sometimes an owner can pick their own builder. They just have to meet the code requirements of the HOA/Developer design/vision.

The items such as the fence are built items. Hence why the builder is being held and not the developer. Structures are bonded per the builder.

The truth is the Developer and builders make their money upfront and NOT by continuing to operate the HOA. Adding amenities like a pool, tennis courts, or clubhouses mean little to them than just a sale attraction. After that, the real cost is in the maintenance of these items as you all will soon find out. Once the HOA is turned over to the owners, it's all about the maintenance of the amenities the builders/developer left everyone with. That is where your HOA needs to concentrate on. Continued maintenance and making sure they meet code before you take over and have to fix it yourselves.

Former HOA President

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By MaureenM1 on 07/24/2012 6:13 PM
Our development is in transition.

From control by the developer to control by homeowners?

Quote:

Posted By MaureenM1 on 07/24/2012 6:13 PM

We hired an engineering company to perform and independent study (expense paid by the association). We are a board of five all homeowners.

Is this a post-transition board elected by the homeowners or a pre-transitional board appointed by the developer?

Quote:

Posted By MaureenM1 on 07/24/2012 6:13 PM
Our board attorney informed the board that the engineering study is only for the builder, not the developer. The board was under the impression that the engineering study for deficiences applys to him as well.

Is this attorney one who has previously represented the developer-controlled board? If the answer is yes, then find another attorney as this one is tainted. Regardless of past relationships with the developer, who is the attorney to say what the engineers may or may not conclude?

Quote:

Posted By MaureenM1 on 07/24/2012 6:13 PM

The Township is holding a bond of approximately 70,000. The gates in our development do not meet code and are the responsiblity of the developer. The Township says its only holding 1500 on a line item for gates, however it will cost 90,000 to install gates that meet code.

I'm lost. Who posted the $70,000 bond and what is it supposed to ensure? Who posted the $1,500 bond for the gates?

Quote:

Posted By MaureenM1 on 07/24/2012 6:13 PM
Again, our attorney says that the bond being held is not for the developer but the builder. Doesn't sound right to the Board.

As I said above, if this is the same attorney who advised the developer-controlled board, dump him. He sounds like he is still representing the developer and not the homeowners.

MaureenM1 (PA)
Posts: 344

Posted:

We are a board voted in by the homeowners. The developer bonded the development. Throughout the years (development began in 2004) the township has released bonds as items were completed. There is 70,000 of bond (security) left to be released. That date is approaching.

One of our board members is a township manager for another township. She says that the township will go by THEIR inspection (which took about five minutes) and OUR attorney said that the developer will not be held accountableThe deficiiences that our report may show and will go by the TOWNSHIP engineers recommendation.

I am losing confidence in our attorney but was told by this board member that he is one of the best HOA attorney's in the area. Not sure if he is connected with builder/developer but it is possible.

The developer fabricated is own gates made from scrap metal and put them up at each entrance. They have NEVER worked and after an evaluation from a reputable company that specializes in gate operations they do not meet code (nor do they work)

The township is saying that they only have 1500 on a line item for gates and the other bond is for roads, curbs. The developer at one time offered us 9,000 to settle the gate issue. That was before we found out how much it would cost to replace the gates with gates that meet code. The Township may very well give the developer his monies and we will be stuck with the gates.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I didn't realize you were from PA. I used to live there and you have townships setups that are a bit different than other parts of the country. So if you get advice on this site just be aware that most don't deal with townships as you do there.

A lawyer does whatever they are hired to do. Which can cause issues as they will tell you "If that is what you want me to do" but there are other options available. They just don't discuss them unless asked about them or you have done your own research. I would have hired a lawyer with business/corporate/contractual law. You are going to be a corporation and the CC&R's are contractual. So just because they are a HOA doesnt' mean they fit your needs. I would avoid a Real Estate attorney altogether as you really aren't dealing with real estate as much as contractual/corporate type laws. You can find some material available at an office store. They have incorporation and other type documents available for like $20. They are where you find "Rental agreements" etc...type documents you can do yourself. It may help just to get an understanding.

Former HOA President

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