RodneyK (Indiana)
Posts: 3
Posts: 3
Posted:
It states everyone has to pay dues on lots except the developer. It takes 75% to change the CCRs. When we have the votes can we change the CCRs to require the developer to pay dues on their unsold lots?
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Can CCRs be changed to make developer pay dues on unsold lots?
Started by RodneyK • 6 replies • 1624 views
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LarryB13 (Arizona)
Posts: 4,099
Posts: 4,099
Posted:
Rodney,
You probably can and you may already have the votes.
Developers often develop land they do not own. Title to the land is held in trust and a deed is issued by the trustee as each lot is sold. What many people do not realize is that there are no deeds for the unsold lots under this circumstance. If that is your situation, the developer may not have any clout (to prevent an amendment) as he does not actually own the unsold lots. The power to amend normally rests in the hands of the lot owners, so the developer is powerless to prevent amendment if none of the unsold lots are deeded to him.
You will need to do some research to see if this is the case and you would be wise to consult an attorney before amending your CC&R's.
You probably can and you may already have the votes.
Developers often develop land they do not own. Title to the land is held in trust and a deed is issued by the trustee as each lot is sold. What many people do not realize is that there are no deeds for the unsold lots under this circumstance. If that is your situation, the developer may not have any clout (to prevent an amendment) as he does not actually own the unsold lots. The power to amend normally rests in the hands of the lot owners, so the developer is powerless to prevent amendment if none of the unsold lots are deeded to him.
You will need to do some research to see if this is the case and you would be wise to consult an attorney before amending your CC&R's.
BruceF1 (Connecticut)
Posts: 2,535
Posts: 2,535
Posted:
Quote:
Posted By LarryB13 on 02/19/2014 5:33 PM
Rodney,
You probably can and you may already have the votes.
Developers often develop land they do not own. Title to the land is held in trust and a deed is issued by the trustee as each lot is sold. What many people do not realize is that there are no deeds for the unsold lots under this circumstance. If that is your situation, the developer may not have any clout (to prevent an amendment) as he does not actually own the unsold lots. The power to amend normally rests in the hands of the lot owners, so the developer is powerless to prevent amendment if none of the unsold lots are deeded to him.
You will need to do some research to see if this is the case and you would be wise to consult an attorney before amending your CC&R's.
Rodney,
You probably can and you may already have the votes.
Developers often develop land they do not own. Title to the land is held in trust and a deed is issued by the trustee as each lot is sold. What many people do not realize is that there are no deeds for the unsold lots under this circumstance. If that is your situation, the developer may not have any clout (to prevent an amendment) as he does not actually own the unsold lots. The power to amend normally rests in the hands of the lot owners, so the developer is powerless to prevent amendment if none of the unsold lots are deeded to him.
You will need to do some research to see if this is the case and you would be wise to consult an attorney before amending your CC&R's.
I'm going to have to differ with Larry on this one. Your CCRs may contain a clause the prohibits homeowners from interfering with declarant (developer) rights. You should read your documents carefully and you may need to consult an attorney.
RodneyK (Indiana)
Posts: 3
Posts: 3
Posted:
Looked up owner of record on a couple of the unsold lots. The name listed is the name of the LLC that is the developer. Unfortunately, it looks like this would not apply?
RichardP13 (California)
Posts: 1,767
Posts: 1,767
Posted:
Just something to think about and it may not matter in your case, but the developer/declarant will typically have three votes per unit versus a homeowner's one.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Rodney
As Richard said, quite often the developer has enough votes that they control the association and/or could prevent such a thing.
Quite common for the covenants to have language that says no dues are paid on the unit/home until it is sold.
There have been cases where the original developer sold some lots, and in some cases the whole development, where the buyers claimed they did not have to pay dues until the unit/home was completed. Typically the courts have ruled against these buyers. The court has said as you are not the originally developer, dues are owed.
In one HOA, our BOD wanted to take the developer to court over the issue. Our attorney advised us the developer would fight it and what it probably would cost us to do so. As there were not that many homes left to build/sell, he saw no advantage in us doing so and advised we did not. The idea was cost evaluated and dropped.
As Richard said, quite often the developer has enough votes that they control the association and/or could prevent such a thing.
Quite common for the covenants to have language that says no dues are paid on the unit/home until it is sold.
There have been cases where the original developer sold some lots, and in some cases the whole development, where the buyers claimed they did not have to pay dues until the unit/home was completed. Typically the courts have ruled against these buyers. The court has said as you are not the originally developer, dues are owed.
In one HOA, our BOD wanted to take the developer to court over the issue. Our attorney advised us the developer would fight it and what it probably would cost us to do so. As there were not that many homes left to build/sell, he saw no advantage in us doing so and advised we did not. The idea was cost evaluated and dropped.
RodneyK (Indiana)
Posts: 3
Posts: 3
Posted:
Thank you so much for the replies! Wow, this is an awesome resource.
The developer is down to one vote per lot. We have 86 they have 37.
Right now they control 3 board positions and we have 2. Not ideal. We could easily remove them from the board with just 51% of the votes but then they might start playing games when it comes to funding the maintenance shortfall. Plus, there would be legal fees just determining if we could change the CCRs. At this time, IMHO the risk is not worth the reward.
After reviewing everything and reading some of the horror stories on here we don't have it so bad! I think for now I am going to let it go. Thanks again!
The developer is down to one vote per lot. We have 86 they have 37.
Right now they control 3 board positions and we have 2. Not ideal. We could easily remove them from the board with just 51% of the votes but then they might start playing games when it comes to funding the maintenance shortfall. Plus, there would be legal fees just determining if we could change the CCRs. At this time, IMHO the risk is not worth the reward.
After reviewing everything and reading some of the horror stories on here we don't have it so bad! I think for now I am going to let it go. Thanks again!
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