Board is Developer & Family Members

Our development was transitioned early with only 13 home owners involved out of 49 properties because the Developer refused to pay any of his fees, maintain the well, septic, and roads, etc. You get the picture... We won that legal battle over three years and got the utilities turned over to the local Township and removed from his control.

Now however, he has sold his family members undeveloped property in the development at cut rate prices and used his votes and loaded the Board with himself as President and the other family members as Board members. None of them actually live in the development as all of their properties are undeveloped.

There is no way that this orchestrated Board can represent the residents who the Association is supposed to serve. They continue to disregard State Condo Act laws such as providing leases for the properties they sell, minutes to Board meetings, financial information, and they have just voted themselves as the Architectural Review Committee and are trying to make demands that way as well.

Any suggestions on actions we can take besides civil action again? Is there any resources out there to help Associations in this situation?

Thank You,

Dave

Thank you for your feedback. We are mostly Senior Citizens here living on fixed incomes so we are trying to avoid involving lawyers and high cost at this time, although it may come to that again.

Our Association is in Michigan and I know they will not enforce the Condo Act from our last episode with the Developer, but I will check out the assistance you described.

I would also appreciate any one else's advice about our situation.

Dave,

To name a few:
Not paying bills on time, not paying common element taxes on time, refusing to provide rental and lease agreements to the Association (because it's their business), not following Board meeting procedures and just being directed by the Developer (their father, step-father, grandpa) without provding any Board minutes if they meet, which often they don't, they just follow the Developer's directions. Naming them selves as the Architectural Review Committee and there-by reporting to themselves and not providing written documentation as required in the By-Laws, etc. There nothing but conflict of interest here and little representation for the residents who actually live here.

We are open for suggestions!

Dave,

LarryB,

Nothing is wrong with civil action and I agree with most of your comments. We have in fact already taken civil action previously to remove the developer's control of the water, septic, and road systems since he was being inactive on maintaining them, etc. We are not playing the victim role here, we are just seeking alternatives to taking more civil action by tapping in to the vast resources of hoatalk members. we are not asking someone to fight our battles for us, I think we are trying to learn from other home association's experiences to be selective in how we protect ourselves against these types of problems. You also have to keep in mind that we are not a large association with a large monetary backing, we are only 13 people in this fight.

Dave,

My question here is... Has the HOA been turned over to the homeowners at any point or is it Developer owned still? That's a glaring issue here one should address. If the developer never turned over the HOA to the owners, then they can do what they want.

As for not paying the bills on time... A HOA is ONLY funded by it's members for it's members. If you have people refusing to pay out of protest or late, then how are your bills ever going to be paid on time? Even if your owner controlled, everyone has to cough up their fair share for the bills to be paid regardless of who runs the place. Simple economics there.

Providing leases? To who? Unless your rules say someone renting out a place has to provide a lease for the record/approval, you don't have to. A lease is a THIRD party action of which the HOA has no business in being in. The lease is between the owner and the renter. It is NOT with the HOA. The HOA can't even evict a bad renter. They can hold the owner's feet to the ground for violations but they can't evict a tenant. So there really is no need to provide lease information. The best the HOA needs to do is make sure that owners have lease agreements with a clause about obeying the HOA rules. Otherwise, that is a private third party contract.

I am playing "Devil's advocate" here a bit. Sometimes when we are in a situation, we don't see the forrest for the trees. I see some trees in your statement that need to be pointed out. That is determining the level of ownership of the developer vs owners. Your financial situation of only funded by your membership and NOT the developer's "deep pockets". You all have to cough up the dough to make ends meet.

Finally, my advice is still "Suing your HOA is suing yourself and your neighbors". It is not just the developer if your HOA is owned by the membership. That is a CONSEQUENCE of filing a lawsuit. If it is developer run, then you all will still have to gather the money equally outside of the HOA funds to hire a lawyer. That too is a consequence. My recommendation is to read your existing rules and work within them. It is possible if you just take the time out to review what you have.

Melissa,

You've asked a lot of questions that require great detail, but I will try to answer them in the order you presented them.

Your first question questions developer vs co-owner control. In the Michigan State Condo Act and in our own Master Deed & By-Laws allows a "transition" of control of the Association from developer to co-owner when the co-owners can legally vote more property units than the developer after 54 months of the original creation of the development with the State. The co-owners were legally able to do this even though the developer "owned" more property he had to be paying full Association fees on it, which he wouldn't do and therefor could not vote it. This impacts the Association but, the developer is still and always the developer until the last piece of property sells.

Your second question I think is a misunderstanding of what I was describing. It is not the co-owners who are not paying money into the Association and therefor not having money to pay bills. The money is there and on time, the current family run Board is simply choosing not to pay bills on time with the Association's funds.

Concerning your statements/questions on lease/rental agreements, our By-Laws do state that when entered into by any property owner a copy of the lease/rental agreement must be on file with the Association Board. I believe the gist of this is to as you say, make sure the verbiage is correct to inform the lease/renter of his/her responsibilities regarding the common elements, etc. In our case we have also received complaints from some of the renters that the Developer has built in Association fees into their contracts that are more than the amount the budget calls for.

Finally, your statement concerning us co-owners fleecing the developer due to his "deep pockets" couldn't be further from reality. It has been the developer that has not been meeting his monetary and ethical obligations under our State Condo Act, Master Deed & By-Laws since he acquired the development. We never did sue our HOA. The legal HOA filed civil suit against our developer. The co-owners were all on board with our actions and in full agreement. We, the co-owners, have always paid our Association fees and never withheld them through all of our struggles.

Dave,

Dave, how did you all talk the Township into taking on this burden? I understand the Township is getting paid thru tax revenues, but still cannot fathom them being delighted to take this on.

This is an old post from 2013... No need to reply or address unless making a new thread.

Larry, thanks. Makes sense.