When does the homeowners take control of HOA from the developer?

Gordon,

There often is language in the CC&R's setting forth the conditions that will trigger owner control of the association. Typically this is when a certain number or percentage of lots have been sold, or it may be on a specific date.

I am not familiar with Colorado law, but most states seem to require non-profit corporations to hold at least one member meeting and election of board members each year. Developers typically give themselves more votes per lot than owners, sometimes as many as 100 votes per lot. This allows them to control the board and it seems like most developers do not bother to hold elections while they can outvote the owners because the outcome is a given.

In my own association, the developer gave himself three votes per lot and after about six years of controlling the board announced that he and his cronies were resigning from the board. This allowed the owners to take control of the board. While the developer was in control I do not recall ever having a meeting or an election.

Gordon - Larry's information is spot on. I would like to give you a little more information on how our transition went.

You can ask to look at the past minutes, this may tell you if there was a meeting.

Our developer sent a letter to each homeowner for the annual meeting and telling us that they were turning the Assn over to the homeowners and there would be an election for 5 Board members and enclosed an application for anyone interested in being a board member to complete and return to them. The Board was elected and Officers elected from the Board. We met with the developer at a set date and they turned over the records (financials, minutes and a small map showing the common areas for Phase 1, nothing for Phase 2)and discussed different things with the BOD. One thing that I regret is we did not get an attorney to help us with the transition. The permits for the stormwater drainage were just recently turned over to the Assn. (7 years later) I personally think if we had a lawyer everything would have been handled correctly and legal. It would have cost, but it would have made things easier for the volunteer BOD. I still wonder (I'm no longer on the Board)if all the common areas belong to the Assn. I hope this helps.

Gordon,
I do not recall ever receiving any financial statements or budgets from the developer while he was in control.

My personal opinion of those who call themselves developers is that as a general rule they are exceedingly ignorant of the law, mostly because they truly believe that the law does not apply to them. Even though the developer controlled the board, by law the association was still required to go through the motions of annual meetings and holding elections. I did not object to the lack of them because I was also ignorant of the legal requirements at that time.

I will say, however, that the developer spent a lot of his own money in the early stages of the development as there was no way that the assessments at that time were sufficient to cover costs. Our CC&R's exempted the developer from paying assessments but did permit him to contribute whatever amounts he chose to. As I said above, I do not recall ever seeing any financial reports while the developer was in control so I have no idea how much he put in in relation to the owners.

My development is not typical of most subdivisions. Our lots are in a rural area and are 36 acres or larger. The lots were sold undeveloped and most of us purchased for a place to retire to. Only about 10% of the lots are lived on full time, another 10% have part-time homes, and the rest are unimproved. Our main reason for having an association is to maintain the roads. Our development covers about 100 non-contiguous square miles and we have about 300 miles of dirt roads all located on privately-owned easements.