Developer pushing HOA without homeowner participation

I live in Myrtle Beach, SC, I built my home in a subdivision in 2006 that at the time did not have an HOA/POA according to verbal confirmation from the realtor and mortgage documents. In 2009 there was a couple of meetings held by the developer with the homeowners, at least the dozen or so that showed up (there are 144 property owners in the subdivision). Nothing was finalized or officially voted on at that time because the developer wanted to just hand off responsibility to the homeowners. The problem that most had was that there had never been an association and all said that they were never told of an association when they purchased, many of whom purchased in 2000 when the development started. A make-shift board was put together without an official vote and collection notices started being sent out for the monthly POA dues. I was among a small group that did pay the $45 quarterly dues for a short time because we were not sure what would happen if we didn't.

Then about a year after that started in 2010, everything stopped. No notices were being sent out because the management company quit and no other POA activity (inspections, upkeep of the development, etc.) was taking place. So we all stopped paying our dues because no one was running anything.

In January of 2013 a new management company appeared and sent us a letter stating that they were now collecting dues and that we all owed back dues (from when no one was running things). The letter also stated that a board was voted in consisting of people at the management company (no property owners). This board also stated there had been some changes in the By-Laws, which never existed as far as anyone knew. Many of the property owners contacted the management company to ask questions about what was going on and why all of a sudden we owe all of this money without any HOA activity being performed. They just said that they were collecting and would work out payment options if needed.

What I was hoping to find out is if the developer can elect a board on his own without the consent or vote of the homeowners. It is also unclear that an HOA has actually been established. Or, is it established once the developer decides to start collecting money. Without an HOA Act in SC, it is hard to get solid answers even from attorneys about whether or not this is all legal and if this non-homeowner board can start issuing liens to those that do not pay.

Any help would be appreciated, but I was hoping to limit the responses to those that actually live in SC and have some knowledge of how things work in this state. I know it is different in every state.

I attached a file of the page from my mortgage documents that state there was no HOA at the time of my signing July 2006. So, if there was an HOA established it happened after I purchased, but how does one find out for sure?

As far as the developer being able to vote in a board that does not live in the community, I thought that an HOA was supposed to have the homeowners participate.

I personally do not have a problem paying the $20 a month for the dues as long as the rules and policies are upheld and the neighborhood is taken care of. Our development does not have a pool, club house, playground, or anything else of note. The common areas consist only of the main entrance and some small pond access section. Since the developer failed to build the roads to the city's specs, they are still considered private, so the lights would go off if there were no HOA.

The past dues that were not being collected when there was no management company in place and no HOA presence should not be allowed to be collected. It remains to be seen if that can be disputed. But the primary question remains whether there is an HOA established. How would one go about discovering that fact?

If you don't know how to do something like find answers, you will need to hire someone who does. Usually a lawyer. The document was worded cleverly. Of course there was no HOA at the time of closing, because its still in developer control. The HOA is formed when the developer wants to leave, and turns it over to the newly formed HOA.

Since you need roads, and want lights and an entrance, its likely



Typically not collecting dues, is not an option. Its spelled out in your rule book (CCR/Bylaws) So yes, they would have to pay. If you vote to not pay, someone can still vote the backdues be paid years from now. Its not an option to not pay.



Welcome to your new HOA. Yep, your stuck with a brand new family. Enjoy your years of dues, bickering, people not paying, etc.

Ron,

You are placing way too much reliance on a document that the lawyer prepared to cover his butt against claims against himself. The document is titled "HOA Hold Harmless Agreement." This was an agreement that neither you nor the seller would hold the attorney responsible if his conclusions regarding assessments were wrong. It was not an opinion or legal advice for you to rely on.

The document does not even appear to be complete. The first paragraph states in part, "the information provided by on regarding dues." My reading is that there should have been someone's name following "provided by" and a date following "on." In other words, it should read something like "the information provided by John Doe on June 28, 2006, regarding dues."

You need to look at your deed and see if it either contains restrictions or states that the property is subject to recorded restrictions. If the property is subject to restrictions, you need to read through them to see if there is a provision for establishing an HOA.

What I read in the document you provided was that as of July, 2006, an HOA had not been formed and no unpaid assessments were owed. I read nothing that says the property would not be subject to an HOA that would be incorporated at a later date per recorded restrictions.

So here is the latest that I was able to find out about my development. I called the county engineering department and spoke to one of the engineers that inspected the development back when it was first completed. He said it was platted as a private development but still had to be up to specs and code from the beginning, which it was. Now some 13 or so years later the drainage throughout does not work properly and the streets hold water for days at a time and yards flood every time it rains. The engineer said he has been out to our development many times over the years at the request of different property owners and has personally spoken to the developer and engineer to let them know the drainage throughout the development has not been maintained properly and needs to be fixed. Now that the developer has hired a management company and elected a board, he wants to collect dues for things he has not maintained.

Now that this information is known, is hiring a lawyer the only way to get the developer to fulfill his obligation to bring things back up to par and maintain the development? It doesn't seem right that he can now force us to pay for something that has been left to deteriorate under his watch. I am afraid that he is going to try to hand this thing over to the property owners without bringing the development back up to specs. With the development being allowed to deteriorate, this can only hurt our property values.

I am not nor do I play a lawyer.

You would not be the first association that hired a lawyer and pushed back on the builder for shoddy and/or incomplete construction.

There was a major case in Mount Pleasant SC. Multi unit buildings with shoddy construction. The builder tried to use statue of limitations had expired. It was critical that proof was shown of former complaints. Value of the units dropped once the word was out about the legal battle. The association did win a large sum of money. The place does have a bit of a stigma against it.

If you are going to hire an attorney then the quicker the better. The builder might even agree to repair once he sees you all are serious.

Hope this helps.