Developer Refuses to Turn HOA Over to Homeowners

Our developer was supposed to turn over control of the HOA to homeowners yesterday. At the last minute (a few hours before the meeting), he changed his mind. We have no new date for transition. Yesterday was the 90th day after two-thirds of homes in our development were settled. Tomorrow we are scheduled to conduct an election of our Board of Directors.

Our biggest concern is gaining control of our finances. We are a very small development and cannot afford significant legal fees. Can anyone recommned a course of action that would allow us to gain HOA control ASAP without a legal battle?

Thanks for any advice you can offer.

There is no longer an Ombudsman for HOAs, only condos.

Chris,

Assuming that 90 days after settlement of 2/3 of the homes is specified in the declaration as the turnover point, proceed with your meeting and election as planned. When the new board is elected, file whatever notices are normally filed with the state that names the members of the board of directors. (For lack of a better name, I will just call this the "corporate report.")

Pass corporate resolutions naming each new officer (president, treasurer, etc) and the duties of their respective offices. Commit the resolutions to writing. Each director should sign and date each resolution. A corporate seal would be a nice touch, but not necessary.

If you know what bank the HOA accounts are held in, have the treasurer or president take a copy of his/her resolution plus copies of the corporate report and demand access to the accounts. To be safe, withdraw the funds and deposit them in an account in another bank.

If the above fails, then you have a legal fight on your hands. The good news is that if the developer has violated the terms of his own declaration in refusing to turn the association and its finances over to the owners, the developer will be responsible for paying all legal fees you incur.