Builder Approval

Started by AP1 • 15 replies • 2353 views

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AP1 (North Carolina)
Posts: 2

Posted:

Lot owner has notified the board that they will begin building next week as they have a default approval since the ARC did not respond to their request after 30 days of submission. The builder they are using is not approved though the ARC also did not respond to the requests to approve the builder though there is no default approval attached to the 30 day rule for builders. Now as a board member, what is next? Do we have any recourse to prevent the lot owner from building without the builder approval or is the builder approval tied to the 30 day rule while not implicitly stated? Thank you.

SG3 (Pennsylvania)
Posts: 63

Posted:

Curious why the BOD did not respond to the request?

JohnB26 (South Carolina)
Posts: 1,569

Posted:

most CCRs have a 'default' clause in the arch appr rules

mine is:

no response in 15 days = approval

period done deal

LarryB13 (Arizona)
Posts: 4,099

Posted:

AP,

It would help if you could quote the passages regarding builder approval.

Without knowing more, my first thought would be that members of the ARC and the BOD should be putting their kids' college funds into a trust because there could be a lawsuit coming out of this one. If the builder has a contract with the owner to build you can expect to be sued for intentional interference in a contract. If the builder is any sort of member of a protected class, plan your vacations around appearances in federal court for the next twenty years.

In most places being a licensed contractor is sufficient. A demand for HOA builder approval gives the appearance that the association is looking for kickbacks. It does not matter whether you seek money or not, it just looks suspicious. Just what are your ARC's and BOD's qualifications for approving one contractor over another?

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By AP1 on 04/18/2014 8:19 AM

Do we have any recourse to prevent the lot owner from building without the builder approval or is the builder approval tied to the 30 day rule while not implicitly stated? Thank you.

Without reviewing the actual documents, it's difficult to say. You may need to spend some money for a legal opinion.
The attorney will need to see the actual request along with the governing documents.

RwT (Florida)
Posts: 154

Posted:

Are you saying there is no disputing the 30 day period has/had lapsed?

The approval form has been submitted so you know exactly what you are going to get.

Is their a problem with the submittal design, etc?

Why do you assume there will be problems or difficulties?

* Non-Lawyer spokesperson.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Welcome to the Forum, AP1.

Is there a reason why your board didn't step in when the ARC failed to act? Is there only one builder who may build on your HOA lots, i.e., who has a monopoly?

Are you by any chance still under developer control?

TimB4 (Tennessee)
Posts: 21,061

Posted:

SG3,

I suspect that, similar to our Association, the approval committee works independently of the Board. This way, the Board can offer a fair appeal process if a member disagrees with the committee's decision. The only way our Board knows what is going on with the committee is through their reports to Board at board meetings or by reviewing the minutes of the committee.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I am not nor do I play a lawyer.

There was a case within the last year or so here in Columbia SC where a person added a very expensive brick garage (in excess of $30K) and claimed that because the BOD/ARC did not say no to his request within a specific period of time, he was allowed to so.

The case got very expensive and in the end the homeowner The ruling was along the lines of just because something was no responded to, it is not the same as approval.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Is the 30 day timeline stated in your Bylaws/CCR's or state law?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JohnC46 on 04/18/2014 12:44 PM
I am not nor do I play a lawyer.

There was a case within the last year or so here in Columbia SC where a person added a very expensive brick garage (in excess of $30K) and claimed that because the BOD/ARC did not say no to his request within a specific period of time, he was allowed to so.

The case got very expensive and in the end the homeowner The ruling was along the lines of just because something was no responded to, it is not the same as approval.

OOPS

To clarify:

The homeowner lost and had to tear the garage down. If I recall, the court ruling it said no response is not approval.

SG3 (Pennsylvania)
Posts: 63

Posted:

"If I recall, the court ruling it said no response is not approval. "

That is how it works with basic business law.

Tim, I should reword to say why didn't the ARC/BOD respond to the request?

Our ARC is one (useless) board member appointment. They are not separate independent operations.

RayC4 (Virginia)
Posts: 173

Posted:

Of course, it depends on the exact wording. Our covenants say that properly submitted plans are "deemed approved" if there's no response within the xx day window. In the referenced court ruling, I'm guessing the covenants were silent on what happens with no response.

AP1 (North Carolina)
Posts: 2

Posted:

Thank you, everyone for your responses. Yes the CCRs do state all plans are approved after 30 days of no response. I am not sure why the ARC did not respond as the members are not on the board. We have a meeting on Monday with the ARC to discuss next steps. I know the ARC had some concerns over the roof pitch but it is my understanding the lot owners have since addressed their concerns.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Thanks for clarifying, AP1. Our ARC also is independent from the board. Although there's an automatic approval if no reply from the ARC within 30 days, it might make sense to instruct the ARC to reply to all requests so that there's no infusion in the future.

DaveD3 (Michigan)
Posts: 796

Posted:

As an aside, what exactly does the ARC do to approve a builder? or put another way, under what circumstances would they NOT approve a builder?

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