Developers Rights and Abilities Post Turnover

Dan

Typically all developer/declarant rights end at turnover.

We're a high rise condo and the only "right" or "ability" the developer retained after turnover was to have a voice in architectural change approvals for 10 years from first occupancy. I believe he wanted this because he owns our commercial spaces--about 4% of the entire project. I was on the board during the last few years of that right and he never exercised it.

I'm not sure how warranties or guarantees are rights or abilities, but, rather, they seem like obligations.

Agree with your 2nd paragraph. It sounds like in your case the developer retained ability was deemed with standing or did you discover that it was really without force and thus became a historical note?

The owners at the time knew what they were signing up for. At least that's the impression one gets from reading the documents that survive from that time (a few sets of minutes from those years along with a copy of the actual 3-way agreement that all parties signed off on). Any claims against the original developer were disclaimed and since the new builder wasn't the successor of "the developer" any claims against him were between him and the home buyer only. The association was left holding the bag when he decided to ignore the grading plan that had been approved by the county and the Water Management District 6 years earlier. Before turnover, the original developer got an engineer to sign off on a statement that the as-built grading was in conformance to the original plan. That was only true for the original 50 lots. The new builder never graded according to that plan, the homeowner-controlled board never held them accountable for that oversight and we have had severe drainage problems on those lots ever since.

We are aware of 720.3075. However in our case the amenities, swimming pool, night clubs, tennis courts, etc. are owned by the developer in a separate corporation known as the club. Every unit owner is required by the governing documents to be a member of the club. The governing documents give the club owner(s) the right to cancel the membership of anyone for any reason that is not in violation of state and federal law. Having used this cancellation ability in the past, board members will not not challenge the club on anything for fear of cancelled membership. Note: Club dues are still due the club by unit owners even when membership is cancelled. Unlike Condominiums in Fla, there is no where to go to get quick cheap relief except through the courts. It could take years and a lot of $ to get relief, assuming you don't get a bad judge.

Although this is a tough long dangerous haul the first step is to see if developer rights and abilities survive after turnover, in the first place.

Another feature is to rule by developer covenant, thus being outside, perhaps, of 720 and 718 requirements. This is also the case here.

To make matters worse the statute of limitations, 5 years, may also make legal challenges against the governing docs null and void.

A smart attorney once told me that if you want to put in a provision in the condominium docs that is a violation of CH 718 but not a violation in CH 720 then put that provision in the Ch 720, Master Association. If the provision would be illegal in both then have the developer create a separate external covenant and put the desired provision there and just make sure that it is mentioned in both the Condominium and HOA docs requiring adherence to the external covenant and that the external covenant is the most superior. Make sure the external document cannot be amended by those you do want to have doing so. Thus the person or persons can change the exterior document at will and without the joinder of membership and such changes are immediately effective upon the memberships after proper recording. This was referred to as a "Rule by Covenant', after turnover. In this way a developer can turnover over an association and still retain control over it legally, at least so far.

Thanks for your comments.

I think good advice given. Developers that retain community amenities via a for profit corporation and bind all owners and renters to pay for the amenities plus a profit to the developer, via governing Docs, can easily be abused monetarily and otherwise. I have seen one instance where the governing Docs indicate the failure to pay the amenity dues will result in the foreclosure of the unit after lien.

No citizens in Florida are able to put together a bag of cash big enough to compete with the developer lobby. Florida made its bones on shady land deals almost 100 years ago and although it has gotten better since then it's pretty amazing that they don't really even try to hide the corruption here.

It does not always take money. It takes perseverance!!! It takes people willing to stand up and fight.

One of our past Developers was a USDA Federal Grantee. When original owners talked to some Attorneys their attitude was the developer will have deep pockets and lots of money trying to talk us out of pursuing. Well ... that developer is now on their 3rd or 4th attorney and out of pocket a lot of money. Their attorneys would try to tell them they could get away with items which they could not. Last I heard they might have had their Federal Funding pulled, which would make my day.

When their "clients" started having issues with their homes and were told ... "it is what it is ... too bad .. so sad, if you do not like it you will have to sue us" knowing darn good and well they did not have money for lawsuits. My response to the owners ... get their response in writing and when they send you such a stupid and ignorant response ... here is USDA Secretary Vilsack's direct email address. When you respond be sure to copy Secretary Vilsack. Yep ... developer ended up being told where they could stuff their "too bad ... so sad" attitude.