Lack of fincancial information

We moved into a new subdivision in Georgia a year ago and the HOA (it's still under Declarant control) is not forthcoming with information on communications. We can't seem to get an accurate accounting of how our dues were spent last year OR how it's being spent this year. No invoices to substantiate the 1st quarter update. Income and amounts paid doesn't have any detailed back-up in the information being given to us. Any advice?

We were the first homeowners in here May 21st of last year. It's a 51 home SD and there are now 12 homes that have been purchased and are being lived in now. There are 4 that are complete or almost complete that will close in the next 30 days and 6 additional lots under contract with construction in various stages. According to our CC&R's, we have to have 75% occupancy before control is turned over to us homeowners.

So they can unilaterally withhold the financial disclosure?

Probably not. You are a member and likely have a right to see the financials but you may have to sue the developer to open the books and/or provide an accounting. Whether you do that will depend on how important the information is to you.

I'll add my own story for perspective. I was the 5th owner in a 65 lot development. The developer was not transparent, did not hold open meetings, did not provide a budget or any accounting (or much communication at all) to the members, did not enforce CCRs, etc. On the other hand, we knew what the dues were going in, they were kept constant until turnover, and the common elements were kept maintained at the same level. The owners weren't really happy about the situation, but after a couple of years our 90% threshold was reached, the developer turned over a bank account with about 2/3 of our annual dues worth of funds, and the homeowners took over and have been running things openly since then.

Things might have been different if the developer had significantly raised dues without a thorough accounting to back it up, but since we were paying what we expected to pay and getting what we expected to get it wasn't worth sinking a bunch of money into lawyers.

Jerry, do you have any specific concerns or just bothered by the lack of openness?

typically, this is because they have the voting power.
At some point, this will no longer be possible but in the early stages of the development, it is possible.

They need to follow procedures but, when it happens, there is typically not enough of an opposition to keep it from happening.

Sorry.....I'm new to the site and didn't realize how to reply to a specific comment......

Yes, we have several concerns. I'll try to be brief....... :-)

1. The day we closed on the house, they installed a mail box at end of our drive. Postal service notified me they had told the developers 6 months prior that kiosk was required. I had to drive to the city post office for 3 months to get my mail until they installed the kiosk - 30 mile roundtrip. Developer said they didn't know about having to have a kiosk, however, amenity plans submitted to county 1 year prior showed a kiosk.

2. We were told (not in writing though) that amenities would include a jr. sized Olympic pool and a cabana that would house bathrooms and have meeting room for meetings, events, etc. And we were told construction would begin in 2 weeks. One year later thay are finally building amenities. Pool is 20X40 and cabana has two restrooms and a closet.

3. They included landscaping fees from last year to cut retention ponds but yet NEITHER pond was cut until this year.

4. When you look at the income statement from the first quarter of this year, it shows about 1/3 of the amount that should be there. I've talked to my neighbors and know who's paid and who hasn't and the numbers don't add up.

5. Their CPA says she doesn't have time to send us copies of the paid invoices.

And on and on and on..............

What did your CC&R's say about amendments? Most specify a percentage of lot owners. The ten-votes-per-lot thing works only on voting on association business. Did anyone verify that the developer held deeds to any lots? Developers often enter into a trust agreement with a land owner; no deed is issued until the lot is sold.

The property appraiser site showed the developer buying a large parcel, subdividing and owning the lots, and selling them to the builder as the builder needed them.

Here are a couple of quotes from our CCRs:
"CLASS B. The Class B member shall be the declarant,
who shall be entitled to eight (8) votes for each lot owned.
The Class B membership shall cease and be converted to Class
A membership on the happening of either of the following
events, whichever occurs earlier:
A. When the total votes outstanding in the Class
A membership equal the total votes outstanding in the Class
B membership, or
B. On December 31, 20XX"

And

"3. AMENDMENTS. Except as otherwise provided in
Article VI, Section 3, so long as Developer, its successors or
assigns owns ten (10%) percent or more of the lots in XXX HOA,
it may change any provision of this Declaration in whole or in
part by executing a written instrument making said changes and
having the same duly recorded in the Public Records of Orange
County, Florida."

It goes on to say that after, 2/3 of the "voting interest" may
amend the CCRs. Note that Article VI, Section 3 essentially says
amendments need to comply with local county and water management
district rules and laws.

I was also wrong about 10 votes per lot, it was 8.