Can developer delay turnover?

We all believed our docs called for the Declarant to turn over (113 standalone patio homes) at 90% (102). The Declarant once told me he thought this was the way it was also.

I have a good relationship with our Declarant and he told me he was a bit nervous saying he did not trust some of the owners (we all know who he is referring to) and believed they might try and make thinks hard on him once they had control of the BOD. He felt they could screw up the remaining sales. He said his lawyer claimed the docs were written as such that 90% was the earliest time of turnover, not the latest. Overall I did not disagree/argue with the Declarant. When asked, I said the inmates will soon enough run the asylum.

Well 110 are built and owner occupied. 2 are under contract and being built. The last home will be built on spec. The difference in the 90% and when he plans on doing the turnover (end of the year) would have been about one year so not a big deal to me.

The usual biatchers are biatching.......LOL

One note. I was once told the 90% (or whatever) meant sold and closed. Maybe this is why the OP's Declarant is not specifying an exact date.

Very interesting stuff...have wondered about this in the past. And am looking forward to hearing what others say about this too.

oljim, in texas

Can you supply the exact language from your CC&Rs and the exact language from your Statute?

From a practical standpoint the developer can get away with a lot as long as they have control. Whether it's legal or not is another matter. As long as the developer is in control, they have the votes to change the declaration if they want to. Assuming the declaration isn't changed, you would have to sue to get the court to enforce the contract. If state law requires turnover at 80%, there may or may not be a government agency that enforces the law. Maybe some GA member can weigh in.

NP, not an attorney but I believe there are a few states that have limited the Declarant's power to change the Covenants and if there are Government backed mortgages in the development particularly VA mortgages, it is difficult. Other than that it's the Declarant's ball and game and pretty much subject to their whims, unless you are willing to spend the time and money to take them to court.

Thanks for all the replies:
1)Our Declaration of Condominium, and the Georgia Condominium Statute, both list 3 cases, earliest applies, and the 80% which we will reach end September, is the earliest unless the declarant voluntarily releases control prior to end of September-(the other one is 7 yrs after recording of declaration, which will be June 2015)

2) There have been no changes to Declaration, and can not be with owners voting for such.

Looks like the majority of opinion is that we will have to take it to court, and there is a provision for that in the governing documents if the declarant does not follow the rules. I just wanted to see if I had missed anything in my interpretation of all the relevant docs. Thanks for the replies.

Just to add to this, any legal action could easily take longer than 9 months.

I'm with Jeff. Follow your docs & state law to proceed properly to elect a board of homeowners.

Our governing docs say declarant has to call meeting to elect new board, if not go to court. But till board elected would need declarant (as legal HOA) to approve funds to pay attorney. Working on this

Here is how I understand it, based on reading Georgia's Condominium Act § 44-3-101. The right to control the association automatically and immediately passes to the unit owners when 4/5 of the units are sold. This does not mean that you have control, only that you have the right to control. The declarant and his/her cronies will still be directors and officers, so they will still be in control as the board, but the declarant loses his/her power as declarant. IMO, the period of declarant control is over at this time, meaning that none of the declarant stuff in your documents applies (including the declarant being the one to call a meeting).

So, I still think that the owners can call a meeting after 80% of your units are sold. Recall the board, have new elections, etc.

On the other hand, I don't have access to your documents, but I think the law controls in this case, not the documents. There are several conditions in the law. Good to check with an attorney in Georgia.

Robert

My question was:

Hope all goes well for you but if the turnover deadline is on or before 06/2015 (9 months away) why the urgency to take legal action now?

Please answer.

Thanks.

Unfortunately the owners cannot elect a board. that is what this question is all about. The Declarant has to take the first step by calling an election meeting for the election of the new owners board. If they do not, it looks like we have then to take it to the county judge who would order it to happen if their reason is not acceptable to him/her. If they then fail they will be in contempt of court, and subject to the judge's penalty. Back to the question - does anybody know of a case where an acceptable reason was "owners not ready"?

No, but if it does go to court, i bet he'll have a better answer by then.

It depends on what you mean by relinquish. The law, section § 44-3-101-(a) clearly states that the declarant loses the ability to appoint/remove board members. This doesn't affect the current board, which remains in place controlling the association.

Then in section § 44-3-101-b, it goes on to state:
"(b) Upon the expiration of the period of the declarant's right to control the association pursuant to subsection (a) of this Code section, the right to control shall automatically pass to the unit owners, including the declarant if the declarant then owns one or more condominium units."

Again, this gives you the right to control, but it is up to the owners to make sure the current board calls a new meeting to elect directors. A separate procedure, without the need to call a meeting, is for the owners to recall all the directors by following your docs and state law. It would be great if the law said the declarant must call a meeting within say 30 days, but it doesn't specifically say that. There is probably a court case or legal opinion on the topic. You can try showing the law to the declarant.

These are specific legal questions, so you need to ask a lawyer, or get the declarant to ask a lawyer. A lawyer can write a strong letter for you to the declarant, which should not cost too much money.

The declarant retains some rights after the period of declarant control, such as the right to access the unfinished units for construction, post signs, and other rights contained in your governing documents. I doubt the declarant retains any right to be the only one to call meetings. The language in the law quoted above passes this kind of control to the owners.

Can you quote the wording from your docs that says that only the declarant can call a meeting? This right goes on forever? Under what circumstances? The owners can never call a meeting?

Perhaps the best advice is for you to search for and read up on declarant transition and try to work with the declarant before and during the transition, which will make it smoothest for everyone including the declarant. Ask to see the financials now, which you have a right to see anyway. If the declarant refuses, then quote the law, let the delcarant know you intend to pursue it, recall the board, and get a lawyer.