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ElizabethF (Pennsylvania)
Posts: 1
Posted:
In Pennsylvania, can a Developer/Builder turnover "common ground" property to the HOA and the community without a sign off of the HOA or its residents? Once the local governng body (township) reviews that the plans have met specs and they "sign off", is it a done deal? We have wetlands and a path that the residents feel are a liability to us and we do not wish to accept this ground without proper treatments, railings, etc.? Do the residents have any say?
DJ1 (Ontario)
Posts: 798
Posted:
Talk to the township about the concerns and if they still say these areas are in full compliance then residents at least have something to fall back on if the township later comes in and says xyz need to be done to bring it up to different standards.
RogerB (Colorado)
Posts: 5,067
Posted:
Elizabeth, read your Declaration of CC&Rs. If it requires your HOA to maintain this "common ground" then you have agreed to do so. Often planning commissions require Developers to place such requirement on their development. If this is the case you can try to get out from under this responsibility by contacting government agencies which might be willing to legally accept that responsibility.
MicheleD (Kentucky)
Posts: 4,491
Posted:
In our area, developers cannot turn over common area until the local Code Enforcement people, including our Metropolitan Sewer District, sign off that the property is in compliance with all codes, etc.

If there is even the littlest thing wrong, like, for example, a curb is not at code, then the common area cannot be turned over.
Jadedone4 (Virginia)
Posts: 495
Posted:
Elizabeth, also along with what was suggested above, if your local/municipality/state, has required a monetary "bond" to be submitted by the Developer (basically an insurance policy that the Developer will perform the services/building, as was accepted and approved by that local body), you have that option available to you. While the builder might ONLY be held to exactly what the plans stated, you often have some "leverage" with influencing the process, if you have a verifiable third party entity (auditor, professional engineer) report which outlines any issues/defects in your community's common areas. It may fall to the HOA to correct instead of the builder, but all in all, at least you KNOW what to expect.
DavidW5 (North Carolina)
Posts: 565
Posted:
Just curious - for those in a community where the developer has not yet "turned over" the common property to the association, who is paying for the operation and maintenance of the common property? In our HOA the title to the clubhouse remains with the builder due to mechanics liens filed by subcontractors who were not paid when the prime contractor went bankrupt. The clubhouse is finished and in full use by the HOA members. The association has been paying all operations and maintenance costs including very high repair costs on the HVAC system which probably was defective to begin with. Does this seem right?

DAve
RogerB (Colorado)
Posts: 5,067
Posted:
Yes, Dave it does seem right. Read your CC&Rs; I'd bet the HOA is responsible for the operation and maintenance not the Developer. Just as they will be responsible after turnover. The CC&Rs don't change at turnover.
GloriaM (North Carolina)
Posts: 829
Posted:
Elizabeth:

Unfortunately many states do not have a "transition law" and many Developers don't even let the HOA know he turned the common areas over. Although I now reside in NC, NJ did have a law that developers had to walk the property with the board and City offical in order to turn over common area to the HOA. It was great because the HOA never adopted a mess from the Developers in the state of NJ.

NC has not been so fortunate, the City or Town is really just looking for streets, gutters and sidewalk turn over to meet their requirements and most times the HOA is stuck with a pond, play area or other common areas that are not up to par.

I try to develop a good rapour with not only the developer but the Town officials. I encourgae the board to perform a walk-through the community documenting a list of items that need the Town and developers attention and from there negoiate terms with them to fix/repair.

Sometimes contacting City Counsel Members or even the press to bring attention to the really big problems might occur, or at the last ditch effort a lawsuit against the devloper.
MicheleD (Kentucky)
Posts: 4,491
Posted:
Gloria, this is off-topic and not at all meant to be nit picky or critical, more constructive than anything, but I noticed that a few people on the board have used the word "rapport" recently and may have had some difficulty in figuring out the spelling, since it's really not a common "written" word. I mean, we SAY it all the time, but few of us ever write it down.

I just thought I would mention that it is spelled Rapport (where the T is silent).

Hope I didn't offend. Just trying to be helpful.

Back on topic, we have 6 separate parcels that are common area. Only 4 have been turned over to us. One is being help up because the drainage is an issue and our Sewer District won't sign off on it till it's fixed. The other is in the name of a developer of that particular section who fled our state mid-development and we have not been able to locate any representative to get the thing done.

Good luck to you.
PaulM (Pennsylvania)
Posts: 1,347
Posted:
David: you are stating that the clubhouse is finished and in full use by the HOA members, however, the HVAC system is generating very high repair costs which the assn. is paying.

Is your community new? If the title to the clubhouse remains with the builder due to liens filed, why is the association paying high repair costs on the HVAC system. Wouldn't the builder still be responsible if the HVAC was not done properly? Is there a warranty on the HVAC system which would cover the repairs?

Any capital expense item (HVAC for clubhouse may be included) which the developer has not turned over is still under the municipality until all is done according to code and approved, at which time the developer has his escrow money/bond returned to him. This is why the developer must 'do things right' and over and over again, if needed, otherwise the municipal authorities hold on to the escrow money.
DavidW5 (North Carolina)
Posts: 565
Posted:
Quote:
Posted By PaulM on 06/13/2007 3:04 PM
David: you are stating that the clubhouse is finished and in full use by the HOA members, however, the HVAC system is generating very high repair costs which the assn. is paying.

Is your community new? If the title to the clubhouse remains with the builder due to liens filed, why is the association paying high repair costs on the HVAC system. Wouldn't the builder still be responsible if the HVAC was not done properly? Is there a warranty on the HVAC system which would cover the repairs?

Any capital expense item (HVAC for clubhouse may be included) which the developer has not turned over is still under the municipality until all is done according to code and approved, at which time the developer has his escrow money/bond returned to him. This is why the developer must 'do things right' and over and over again, if needed, otherwise the municipal authorities hold on to the escrow money.

Paul,

I've been told that the county only holds a bond on the clubhouse structure, not on the internal systems such as HVAC. Since the developer is in control of the HOA Board, the association has been paying these huge repair bills (over $70K in the last two years). I submitted a request to the management agent to pursue reimbursement from the supplier of the HVAC equipment and/or the developer. Their reply was that the system was out of warranty and the Board chose not to seek reimbursement. I suppose the association will have to file a lawsuit against the developer once homeowners are in control of the HOA.

Dave
Jadedone4 (Virginia)
Posts: 495
Posted:
David, I think that was what Paul and others are stating with the mentioning of the bonds with the local municipality. In my situation the clubhouse could not be "turned over" prior to the inspection - which INCLUDED that the HVAC, electric, plumbing, fire codes, etc - were properly inspected and passed by the local municipality. If you are stating that (possibly) that those above mentioned inspection occured, and then the system went bad during the period up to the bond (or pending) bond inspection - I do not understand how a warranty could have expired during that period (not to say that it did not occur, but that it would be odd). Part of the "turn-over" requirements is that a common structure be able to function as the plans called for it. Now you might not have the most energy-efficient unit in the clubhouse, as the developer/builder is not responsible to be "green," but the unit MUST function as specified by the manufacture, and per the site plans for transition to occur.

I would also seek legal counsel's opinion on whether or not a common element can be "turned-over" NOT free and clear with regards to the lien filed against the structure, due to lack of performance by the developer/builder. You might need to head down to the local Courthouse for exact and on file records of what has transpired, but that is only better information for your community.

.. here I thought that the Baltimore Colt's move out in the middle of the night to Indianapolis was cruel, and shady....
TomK2 (Ohio)
Posts: 39
Posted:
Elizabeth: We had the same happen to us here in OHIO. We found that in Ohio you can deed property to any one with or without their knowledge even if it has Taxes due etc. The builder (declarent) deeded the green area to us without telling us and it had taxes due etc. We had to get a lawyer. It was finaly settled out of court because the builder didn't want the bad press! Tell the builder you are going to the newspaper or the local TV reporter and see what he does. You may get a nice surprise!
DavidW5 (North Carolina)
Posts: 565
Posted:
Quote:
Posted By Jadedone4 on 06/14/2007 7:42 AM
David, I think that was what Paul and others are stating with the mentioning of the bonds with the local municipality. In my situation the clubhouse could not be "turned over" prior to the inspection - which INCLUDED that the HVAC, electric, plumbing, fire codes, etc - were properly inspected and passed by the local municipality. If you are stating that (possibly) that those above mentioned inspection occured, and then the system went bad during the period up to the bond (or pending) bond inspection - I do not understand how a warranty could have expired during that period (not to say that it did not occur, but that it would be odd). Part of the "turn-over" requirements is that a common structure be able to function as the plans called for it. Now you might not have the most energy-efficient unit in the clubhouse, as the developer/builder is not responsible to be "green," but the unit MUST function as specified by the manufacture, and per the site plans for transition to occur.

I would also seek legal counsel's opinion on whether or not a common element can be "turned-over" NOT free and clear with regards to the lien filed against the structure, due to lack of performance by the developer/builder. You might need to head down to the local Courthouse for exact and on file records of what has transpired, but that is only better information for your community.

.. here I thought that the Baltimore Colt's move out in the middle of the night to Indianapolis was cruel, and shady....

Jadedone,

Recently, two and a half years after it opened, the liens on the clubhouse were released. We do not have access to the settlement agreements with the subcontractors. A check of the county property records shows the developer still holds title. As to whether the HVAC system was inspected by the county and up to code, we have no way of knowing. We requested to have a homeowner who is certified as a Professional Engineer, and an associate of his who is an HVAC specialist inspect the system. The board turned down the request citing insurance and liability concerns since access to the HVAC equipment is via a ladder-like stairs to the attic of the clubhouse.

In addition to the high repair bills, the system clearly does not function "per the site plans". Here is why. The system not only heats and cools the clubhouse but also heats, cools and dehumidifies the indoor pool. The indoor pool enclosure is nearly all glass with multiple sliding doors (with screens) along both side walls and motorized roof panels that can be opened (with screens for the openings). There are no controls for the system accessible to the pool staff other than the button to open and close the roof. However, the pool staff has been forbidden to open any of the sliding doors or the roof because, when they do, the system continues to run and attempts to dehumidify the outside air causing the compressors to freeze up. It should have been installed with an automatic switch that cuts off the pool HVAC functions whenever the doors or roof are opened.

All of this has been documented in writing along with a spreadsheet summarizing all repair costs and submitted to the board and management agent. These documents included a request that the management agent pursue obtaining reimbursement from both the equipment manufacturer and the subcontractor who installed it. The management agent has replied that the board declines to pursue reimbursement.

It should be noted that we discovered that a similar community developed by the same builder in another state has has a lawsuit against the developer underway for defects in their clubhouse HVAC system. We would like to avoid the expense and delays of a lawsuit once the community transitions to homeowner control but it looks like that may be our only option. We have our doubts that the developer appointed Transition Committee will pass along all of the information that we gathered to the engineer hired (by the developer controlled board) to do the transition engineering study.

Dave
Jadedone4 (Virginia)
Posts: 495
Posted:
David,

Horrible situation that you and your community is in. Here's what I was able to do, in similar situation (allow me to give you the facts first).

Developer did not pay all sub's on Gameroom/Clubhouse structure. One sub (out of 5-7) had a worker claim injury due to developer's personnel (not the actions of another sub). Structure was over seven month late on "delivery" to community. Structure was then "turned over" by Developer and Developer board (their staff, basically) after developer board signed indemnity agreement "on behalf" of the community - which was not reviewed by attorney.

First thing that I would do, and what was available in our state, was to review online records of inspections of the property/building. My local municipality allows you to view this via internet if you have the property address. This will give you a "calendar" of when whatever inspections were committed, and the resulting actions (pass, fail, conditions, etc).

If the title is STILL held by the builder/developer, then the HOA is not the owner, and should NOT be paying those costs. We had similar "argument" presented by MC and Developer board. However, I successfully argued that since we did not have use of structure we could NOT be responsible. Three months of wrangling, and a re-imbursement check from developer is presented. If your community is not named on title, as in "XYZ HOA/Condo" etc - then you do not own the parcel, and should not be paying the bills (yet).

If liens have been filed, depending on local court records/rules, you should have access to those via court records. Might not be easy to get them, and may be time-consuming, but if they are a public record, you do have access.

Also this is a VERY important point... NO MATTER WHAT THE BUILDER'S APPOINTED BOARD DOES IN THE WAY OF A "TRANSITION STUDY" INSPECTION... HIRE YOUR OWN PROFESSIONAL ENGINEER. YOU DO NOT HAVE TO ACCEPT THE BUILDER'S INSPECTION AS THE FINAL COMMENT ON STATUS OF THE COMMUNITY PROPERTY BEING TURNED OVER. Also on this issue, find out from your local municipality what the criteria is for the county bond release specifics. Make yourself KNOWN to that agency/department, so that when this does occur, you have a contact there. You and your community do have rights (might be limited) but you need to know the rules of the game.

Next you mentioned that the "pool staff was not allowed to open..." - what I read in this is that the structure is open to the community. So maybe I am confusing some points and should step back with this... is your "board" fully the developer/builder's agents, or have you transitioned to owners on the board...? If the developer has staff on the board, the responses here will be different. If the board is strictly owners, who are not "hearing" your community's concerns, that is another situation (that is something that I am not sure about here, because you mention "once we go to transition..." However it is, if you and the community have access to the structure, I believe that no matter who has title, that the costs of operating the structure should be shared. But more information/clarity is needed for anyone here to address that concern properly.

Find out what PA law/statute speaks to "transition" and what the developer/builder is required to transition. Take a look at www.cai.com (there is a drop down for each state to another site for specific info PA = http://www.caionline.org/about/chapterdetail.cfm?ChapterCode=PDVL). Start there with the available checklists of what developer/builder's SHOULD be providing to owners at transition. Also on here (HOATalk) I believe that Roger and a few others have excellent checklist guides for transition events. Do a search online for "Developer Transition" (in quotes) and you will find many of the articles that assisted me when we underwent transition (well actually are still undergoing) from developer to owner control and ALL of the resulting issues, concerns and "land-mines" that you and your community should look for.

I will not make this assumption and apply to you - but when I was in this position, the MC was not helpful to the community at all. There are some on here who will urge you to fire the MC outright after transition. I do NOT believe that is the appropriate action in EVERY situation. You must gauge your situation for what is best for your community. Now having said that I would fully recommend that you start a resource library of information on what the actual rules/regulations/procedures that SHOULD be in place during transition. One of the most "damning" things that I did was take actual articles written by my MC's principles and show where they did not even follow their own internal rules of transition. The more information you have available you, the less you are relying on them - and this is the way it should be, as this is YOUR community.

Good luck, and remember to post, post, and post again on here - I cannot tell you the amount of personal assistance that Roger has provided me, and the amounts of information and wisdom other folks here have provided.

PaulM (Pennsylvania)
Posts: 1,347
Posted:
Jadedone: I always appreciate the volume of good advice you consistently give posters here, and especially now to David.

I just wanted to ask David again, why is the title still in the developer's name (OK since with the ongoing problems it is good he is considered the 'owner') but the association members are using the structure and paying for the repairs.

I'm wondering if this might be a way for the builder to nicely state that since the members 'can' use the clubhouse/pool and the members pay for repairs. Something doesn't sound right to me. Maybe I'm being overcautious here.

.
DavidW5 (North Carolina)
Posts: 565
Posted:
Jadedone,

Thanks for the extensive reply and suggestions. By way of clarification:

The association board is still controlled by the developer. The board currently consists of three employees of the developer and three homeowners APPOINTED by the developer. These three have never opposed any position of the developer. The developer will retain veto power over all board actions until elections are held.

The Transition Committee consists of 5 homeowners appointed by the developer controlled board. None of them have previous experience living in an HOA and none had even read the governing documents when they were appointed. They are in the process of interviewing engineering firms to conduct the transition survey. They will make a recommendation of a firm to the board. The board is not obliged to follow their recommendation. Several months ago they interviewed, recommended and the board hired a law firm as the association attorney replacing the attorney selected by the developer.

The clubhouse is in full use by the homeowners. I have no official standing in the association. I volunteered for several committees but was not appoinnted by the board. I have a background in financial management and have submitted written questions on each months financial reports. Most of these questions were ignored. The board has not opposed a number of charges to the association's funds which were arguably the responsibility of the developer. I have pointed out to members of the board and the management agent the feduciary duty they owe to the association but they deny doing anything wrong. I have become a thorn in their side and they have tried various ways to discredit me to the rest of the community.

Dave
Jadedone4 (Virginia)
Posts: 495
Posted:
Paul thanks for the kind words. I believe that you have a responsibility to help out others, as OTHERs have done for you. God knows that had I not found this site months ago, and with the information/advise I have been given here, on and off-line, I would not be in a position to serve my community as I have. Trust that Brad, Paul, Melissa, Robert, Harold, Roger, Gloria and that "mysterious Oracle" called "hoaTalk" lower caps, and many others have "challenged" me in many ways to better educate myself about HOA's and their "mechanics."

David, your recent post presents some issues that I am at a loss to explain. From what I have read you have actual OWNERS on your board, even if they were appointed by developer/builder, they are STILL community members; and for them to make the decisions that you have stated, is odd. I still believe that the original advise that I gave is valid, and worthwhile for you to research the items suggested (court records, independent research to counter mis-information, etc.) - as they will only assist you later down the road.

I will however defer to some of the "oldheads" here who have been dealing with HOA's longer than I, to offer advice based on your last post. I must say that you are in a difficult situation, a very difficult and surely frustrating situation. Good luck !!!

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