KL4 (Georgia)
Posts: 15
Posts: 15
Posted:
Here's a tricky one for you to digest. I have only lived in my subdivision for 4 years. This is my first year on the BOD and can't believe how much documentation is missing from 2006, an apparently critical year. Read on as I explain what I discovered last year:
Our subdivision is 13 years old this year and original plats show that a total of 3 phases were intended to make up the subdivision even though only 2 parcels were recorded. Phases I and II were submitted to covenants and complete by 2001, with only about 6 of the 79 lots still vacant. In 2005, the original developer (declarant)filed bankruptcy with 47 additional lots intended for Phase III to go back to the bank. In 2006 another development company bought them, had them surveyed and recorded a plat for the property. Here's where it gets interesting. Since the 47 lots were purchased in a foreclosure sale, they were not conveyed by the previous developer, and therefore not part of the association and had to be annexed. Naturally negotiations with the developer ensued and per covenant procedure a vote of the members took place to annex these additional lots. According to available records, the required 2/3 majority vote fell short by several "yes" votes despite the developer having performed some of the negotiated requests, albeit minor ones, so no supplementary declaration was ever filed. At any rate, sometime in late 2006, that developer ALSO filed bankruptcy and the properties went unsold until 2010 when and investment company (not a developer) bought them in a repo sale. That sale recorded those lots in a "Limited Warranty" deed which (for reasons quite unclear) subjected the lots to the covenants. So I found myself asking how can this be done when the lots were never annexed?
Okay, so if you're still with me, LOL, in 2011 based on the limited warranty deed, an attempt was made to collect assessments from this investment firm because our covenants provide for such collection to anyone "not a builder acquiring lots in the normal course of business". Initially, they were willing to offer $50 a lot. But when pressed for the full amount they refused to pay any amount and claimed they were exempt as a builder, which of course they were not. This is where the discovery of the failed annexation attempt surfaced. To me, it's cut and dried. Those properties were never annexed and therefor not subject to assessments. However, there's the issue of the deed which subjects the property to the covenants. But how can it without a vote of the majority to accept it? We recently retained an attorney, but so far I'm not impressed because his advice doesn't appear to have our best interest at heart. Has anyone ever filed a Declaratory Judgement in a case like this? I read that it could decide once and for all whether the deed is valid despite no previous annexation.
Our subdivision is 13 years old this year and original plats show that a total of 3 phases were intended to make up the subdivision even though only 2 parcels were recorded. Phases I and II were submitted to covenants and complete by 2001, with only about 6 of the 79 lots still vacant. In 2005, the original developer (declarant)filed bankruptcy with 47 additional lots intended for Phase III to go back to the bank. In 2006 another development company bought them, had them surveyed and recorded a plat for the property. Here's where it gets interesting. Since the 47 lots were purchased in a foreclosure sale, they were not conveyed by the previous developer, and therefore not part of the association and had to be annexed. Naturally negotiations with the developer ensued and per covenant procedure a vote of the members took place to annex these additional lots. According to available records, the required 2/3 majority vote fell short by several "yes" votes despite the developer having performed some of the negotiated requests, albeit minor ones, so no supplementary declaration was ever filed. At any rate, sometime in late 2006, that developer ALSO filed bankruptcy and the properties went unsold until 2010 when and investment company (not a developer) bought them in a repo sale. That sale recorded those lots in a "Limited Warranty" deed which (for reasons quite unclear) subjected the lots to the covenants. So I found myself asking how can this be done when the lots were never annexed?
Okay, so if you're still with me, LOL, in 2011 based on the limited warranty deed, an attempt was made to collect assessments from this investment firm because our covenants provide for such collection to anyone "not a builder acquiring lots in the normal course of business". Initially, they were willing to offer $50 a lot. But when pressed for the full amount they refused to pay any amount and claimed they were exempt as a builder, which of course they were not. This is where the discovery of the failed annexation attempt surfaced. To me, it's cut and dried. Those properties were never annexed and therefor not subject to assessments. However, there's the issue of the deed which subjects the property to the covenants. But how can it without a vote of the majority to accept it? We recently retained an attorney, but so far I'm not impressed because his advice doesn't appear to have our best interest at heart. Has anyone ever filed a Declaratory Judgement in a case like this? I read that it could decide once and for all whether the deed is valid despite no previous annexation.