Releasing Developer from all liabilities

I live in a Florida HOA community. The Developer (***********) did not finish the last entrance in the last phase of our community. Our current B.O.D. has just given our Property Management company the authority to accept the $25k that ******** was offering with the condition of releasing them unconditionally on the WHOLE community from any further future action. We have issues with our drainage ponds. We are built on an orange grove. We have known houses in the community next to us that have had sink holes. Am I right to be concerned about this release of liabilities? Does the Board have the right to make a decision like this without a vote of our entire community?

PS - Please don't post company names on this site. We removed them from your original post.

Posting names of individuals or names of companies isn't a good idea. We only hear one side of the story here. There's no proof the mentioned person is doing anything wrong. It would be considered slanderous to post. That could put this website in danger of being sued or removed. Plus, posting such information is dangerous to both individual or company. You don't know who may see a name and contact this person or company without them knowing their information was available online.

I was on another HOA site that often posted names of individuals, lawyers, and companies. One day, I posted something that upset someone. They took my name from my post and proceeded to post my home address and phone number without my knowledge or permission. This could have put me in extreme danger. I could have had this person contact me that had threatened me online in person. Luckily, I never post my real name on the internet. They posted the wrong information. The website could have been held liable if anything had happened and the posters possible witnesses. I no longer visit that website as it has proven itself to be threatening and post misinformation.

As far as the developer being released. It sounds like instead of doing the job, they are willing to pay the association $25K to do the job themselves. This could be a good thing. As the job may be done for $10K instead with modifications. That means the HOA could bank the extra money. If your HOA has had a bad history with the developer/builder, you may not want them to do the work anyways. This way your HOA can hire whoever they want and have control on what they want put there instead.

MelissaP summed it up very well. Our website is not willing to take on the liability of posting company names here. Plus, in the case of complaints about companies it really adds no educational value to mention the name of the company since it's only one side of the story and the answers are meant to be generic anyway.

We also ask that people not post the full names of people as well and that's for liability and protection of our members, as Melissa also mentioned. Our posting rules lay all this out.

Best Regards,
HOATalk

Vanessa a few questions, and comments....

First is the board entirely owners, or does the builder still have seats?

What does your governing documents state with regard to board decisions, and does it speak to "special" requirements for situations like this (i.e. special assessments require 2/3's majority votes, elections, etc)?

Has your board sought out legal counsel on this decision?

Has your board sought out professional engineers/auditors regarding this decision? If you are releasing the responsibility of the common area, or element, how will this impact upon the community? How will it impact upon the local municipality, with regards to "who" is then responsible for updating (and getting approvals) for the new design?

For the "future" work that the $25k would provide, is "time of the essence" for the community? In other words, if the design item would cost the builder $25k, then why not just build it, have it inspected, and then request for release of bond? What is it about this transaction that benefits the community, the builder, etc?

No one here is uniquely qualified to answer a "on the ground" question such as yours in your community, with regard to the builder/developer's intent, veracity, or business practices. There are good, bad, and ugly builder/developers out there. If you have done research on this builder/developer, and it points to something that just isn't right - take that under consideration. Absent unbiased third-party advice from professionals (engineers, auditors, etc), you just have no way of knowing whether or not this is advantageous for the communithy, or even for the matter the builder - it could well be an even agreement.

If all else fails, get an attorney involved - as I am absolutely POSITIVE that if you sign anything from the builder/developer - it will have been drafted by their attorney. You want any agreement that the board/community enters into - to properly reflect balance between the parties - that does not mean that one may not get more than the other, just that what YOUR community needs/wants, is secured and granted.

Last but not least, call the planning/zoning office for your jurisdiction. Ask them what impacts this "change" would mean for the community/builder/developer. Ask if there are any easements which you are unaware, or a "ROW" (right of way) or any other issue which could potential create an issue for the community if you release. Remember, the builder/developer may not be doing anything " un-toward," but regards, they are the "pro's" in this relationship, and the community is still learning. Better to have another "pro" take a look at the situation so that your community has the best advice available when the time comes to make a decision.

** if your board is fully staffed with owners, make sure that you have "DOL" (directors and officers liability insurance). The board is allowed to make mistakes, but for something of this level (assigning of rights for payments), I think that any reasonable person would expect that they would seek out some form of professional counsel prior to making their decision. Sometimes a gently "reminder" that their decisions may or may not be covered under "DOL" insurance carriers, will work wonders to get the board to seek additional information/resources prior to making a decision. Remember, this is not a "weapon" against board decisions, just a healthy reminder that they have fiduciary duties to the community, of which "care" is one.

Vanessa:

Sometimes you have to make a business call on developer problems. To file a lawsuit against any developer for not doing A, B or C costs a lot of money also a lawsuit can take up to 2 1/2 years until it can go to court.

So the questions to ask are a) Will $25,000.00 cover all or most of the problems within our community. b) What amendities were filed on the recorded plat maps within the County? (Whatever he filed, he is obligated to install0. c) What items are enforceable through the County Engineer? e.g., drainage ditches.