Water Treatment Facility

Started by ElizabethP6 • 3 replies • 978 views

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ElizabethP6 (New Mexico)
Posts: 4

Posted:

There is an expensive "state of the art" water treatment facility in my subdivision. It's in need of maintenance and repairs. First, one of the pipes was originally placed on "open space"and needs to be moved on to the subdivision's property. There are also 3 wells that are used to test the water. Two of them are dry, so improvements have been scheduled with an engineer to improve the structure so that the wells are not needed. Approximately $75K is needed for these repairs. The developer has been giving the HOA treasurer $1K monthly, and the treasurer has then paid the engineer. This has been going on for 3 years. The HOA is a developer-controlled HOA. When I came on the Board, I changed the HOA insurance and discovered that the HOA does not own the property nor the water treatment facility. The developer had his lawyer send the HOA a letter stating basically, based on the evidence provided, the HOA owns the parcel even though the property is deeded to Peggy so-and-so (who knows?)

1. Is the HOA responsible for the costs?
2. Why would the developer pay the HOA then have the HOA pay the engineer?
3. Is the developer responsible for paying HOA insurance until the HOA transitions to homeowner control?

SheliaH (Indiana)
Posts: 6,964

Posted:

Usually the developer runs the show until the entire community (water treatment and all) is turned over to the homeowners. I'm not sure why the developer doesn't seem to know exactly what it owns vs. the homeowner - what kind of evidence did the attorney give you? And why is the developer running things, but seems to want to pass on responsibility of this water treatment to the homeowners? Y'all need a lawyer to sort this out.

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

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By ElizabethP6 on 08/10/2017 6:47 PM
There is an expensive "state of the art" water treatment facility in my subdivision. It's in need of maintenance and repairs. First, one of the pipes was originally placed on "open space"and needs to be moved on to the subdivision's property. There are also 3 wells that are used to test the water. Two of them are dry, so improvements have been scheduled with an engineer to improve the structure so that the wells are not needed. Approximately $75K is needed for these repairs. The developer has been giving the HOA treasurer $1K monthly, and the treasurer has then paid the engineer. This has been going on for 3 years. The HOA is a developer-controlled HOA. When I came on the Board, I changed the HOA insurance and discovered that the HOA does not own the property nor the water treatment facility. The developer had his lawyer send the HOA a letter stating basically, based on the evidence provided, the HOA owns the parcel even though the property is deeded to Peggy so-and-so (who knows?)

1. Is the HOA responsible for the costs? If you can prove "beyond reasonable doubt" the HOA does not own the property OR that the HOA via the developer does not have a "contract" for the HOA to help maintain ... then potentially NO.
2. Why would the developer pay the HOA then have the HOA pay the engineer? That is a question only potentially the developer can provide. You covered a couple of issues so which one is the engineer providing a service? However, because I have been in a past lawsuit with a developer I would question whether the developer is trying to insure the HOA has legal liability on the issue vs the developer.
3. Is the developer responsible for paying HOA insurance until the HOA transitions to homeowner control? Depends on your governing documents and State Laws.

On your other thread I provided a link to your HOA State Laws ... I strongly suggest you read them.

ElizabethP6 (New Mexico)
Posts: 4

Posted:

Thanks. I read them and posted them on our website that I developed for the HOA. I could not find anywhere in there anything that would answer my questions. I'm holding an open meeting on Monday which includes our lawyer as he is a homeowner and a member of our HOA.

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