Is a partner of now defunct Developer still Exempt from paying HOA dues?

I'am treasurer of a 49 lot single home community with private roads. By Delaware laws (DUCIOA) we have to build-up a capital-reserve fund for future major expenses such as road re-paving. One lot (without a home) is owned personally by one of the two partners of the former developer LLC which closed in 2007 after the community was turned over to our HOA. After paying his equal share of HOA dues for several years he is now delinquent for about 3 years. Claims exemption under a vague clause in the original 2003 covenants that read (Developer and it's members are exempt from dues). DUCIOA in effect since 2009 requires equal payment by all lot owners. (We have no pool, clubhouse; only private roads, sidewalks, common areas, drainage system/pond, street lights). We now plan Small Claims Court action. Any advice or similar case outcomes would be welcome. Our dues are $460/yr; everybody else is paying. jens

I agree with Kevin.

The intent of the rule would be to exempt the developer and his agents from dues during the initial construction.

Is this person the original owner of the lot or was it purchased from the developer?
Is the name on the deed the name of the corporation that claims to be a partner to the developer?

If it was purchased from the developer and if it's in the name of an individual and not the corporation, I see no way to slice it other than that he owes dues.

This website has been of so much help to me as this is my first term as a HOA board member. MANY thanks! Your replies above confirm what I have also thought and will use in our upcoming Small Claims Court action. If this fails (we are up against a very wealthy person who can afford big law firms)I plan to raise two additional legal points (I am not a lawyer): "Vague clauses" are often not enforced by the Courts, I read. Also: the original Covenants written by the developers and given to the buyers of homes in a new development on a 'take it or leave it' basis seem to be the perfect example of a "Contract of Adhesion" - that is where the weaker party has absolute no negotiation power. Many 'Contracts of Adhesion' are often found to be "unconscionable" and so unfair to the weaker party that a court will refuse to enforce them - (from a legal dictionary). Has any HOATalk member used or encountered such arguments?
The title of this lot is in one of the now closed developer's LLC's partners own personal name and he has never listed this lot for sale. Jens

John, really appreciate your advice - will try to follow it. What I ran into when volunteering for the HOA Board was that other homeowners said "why should we pay or may have to pay more to make up for this rich lot owner's non-payment when we paid our HOA dues in the past even though we had our water shut off because we were unable to pay our utility bills due to job loss." All I am trying to do a good job as a treasurer. Never wanted to be a lawyer - are a retired engineer. Again, many thanks. Will try to let you know the final outcome. Jens

Nice to see such a fine outcome, Jens! It's wonderful that HOATalk participants helped!

Great news! We love a success story in here. I just wanted to add that a "judgment" does NOT equal money in your pocket. Make sure to know what steps your HOA has to take to have that judgment realized. Each state varies so I can't tell you specifically on how yours will work. Typically there are 2 main options:

1. Garnish their wages. This requires knowing their social security number and where they work to pursue. The problem is that a social security number is NOT required nor typically given to a HOA. You can't always trust a bank account information from old checks either. They can cancel that account before you get paid. Garnishing of wages may not always work.

2. Repossess something they own. You can find out an asset like a car, motorcycle, or work equipment they may own at the courthouse. The HOA would have a right to possess this item in return for the judgment payment. However, here is the catch: Let's say they have a car registered. The car is worth $10K and owned straight out. The judgment is for $5K. That means the HOA sales the car at $10K can ONLY keep the $5K. The other $5K has to go back to the person your repossessed it from. You can only make yourself "Whole" to the courts. Can't keep the profit.

You also have to be aware that judgments also have time periods they are good for. They have to be renewed about every 7 years if not paid. The problem is that your HOA board may change every year to 2 years. Who's going to remember the outstanding judgment???

A lien is also a type of judgement. It's a slightly different process. It's got more teeth to it as the person can not sale their home until paid. A bit different than the judgement you get from a small court claim. Which in your case needed a small claims process. However, typically for HOA's it's better to lien to pursue a debt than to sue.

Good luck. I just wanted to add this information so people know half the battle has been won here.