Developer Control In Tennessee

Started by RickB7 • 4 replies • 2149 views

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RickB7 (Tennessee)
Posts: 3

Posted:

In our HOA, incorporated and located in Tennessee, the Charter allocates votes between two classes, A (lot owners) and B (Developer). It also states that the Developer as the Class B voting entity gets two votes for each lot whether owned by it or by others. These votes remain in effect until ALL lots have been sold. Thus the Developer has absolute control since it has twice the votes as the residential owner base until it has sold every lot.
Does anybody know of any statutory provisions in Tennessee that would override or preclude such a provision??

SheliaH (Indiana)
Posts: 6,964

Posted:

I don't live in Tennessee, but if the developer set the documents up that way, it's unlikely there was anything in the law that prohibits them. Meaning until the community's turned over to the homeowners, the developer can pretty much do whatever he/she likes.

At this point, the best you can do is to keep an eye on what the developer is doing and ask lots of questions. Hopefully, there will be a transition period where a new board of homeowners will be set up - that's when you may want to volunteer to be on that initial board so you can get more information and determine what the association will need to do after the transition is complete. There are a lot of people on this board who've gone through such a transition so you may want to search previous conversations to see the ups and downs of that process so you'll have an idea of what to expect. Good luck!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

RickB7 (Tennessee)
Posts: 3

Posted:

I appreciate the response and agree that one would hope that when the association was formed, this two votes per lot was legit. I am going to pursue one other avenue and that is whether or not the law or the HOA Charter preclude two entities voting for the same lot/home. I bought my lot a few years back and have one voting right attached to that lot. However, the Developer still has his two votes also attached to that lot. It is worth checking.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This voting system is typical and almost boilerplate of any CC&R's that is under developer control. Our HOA documents had the same references. However, once we were under the membership control, we changed all the developer references including the 2 vote system. It does cost money to refile and modify the documents. Not to mention a membership vote to do so. Your just putting the cart before the horse at this point.

As long as the Developer is in control and NOT member, they out vote you.

Former HOA President

BobD4 (up north)
Posts: 1,002

Posted:

Isn't it sort of late for this surprise? Is there a sunset expiry in your state ?

How long might it take ? We owned a cottage country lot from year 20 to year 29 awaiting road transfer obligations to be legally completed ( developer personally covenanted to complete transfer to county ) without a sunset ( ie is still open ended approval ). Road is great but 35 years later ( ! ) the elderly developer is still personally doing the roadwork with neither final lot sold nor transfer to county completed. How long will this continue ? ( is starting to roll his tractor . . will he live to 150 ? )

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