POA Developer - Who Pays for what?

JoeB18 (Georgia)
Posts: 31

Posted:

Hello,

I live in a decent sized community currently 256 houses with a total of 500 planned. The neighborhood is currently set up as a POA which is governed by the Board of Directors and they have selected a management company to manage the day to day activites. The Developer has selected a builder for the community. I would like to gain some perspective on a couple of items in regards to Developer and Homeowners responsible funding.

1) We currently pay yearly dues and from the yearly Financials the Homeowners are paying for legal fees, landscaping improvements (plant buying), irrigation system, pool repair etc. Is this normal?

2) Since this is a POA should the homeowners be funding every enhancement to the neighborhood i.e. planting in common areas and light poles etc.?

3)We currently only have 1 pool with a bathing capacity of 90 people and no clubhouse. Do Communities of around 500 houses usually only have 1 pool and no clubhouse? How can I find out if what we currently have is acceptable or outside the norm?

4) Do the Homeowners have the right to approach the management company executing for the POA for financial records i.e. invoices etc? How often should the POA be releasing financials?

5) If questions arise from reading the covenants dictated by the POA, the management Company should be responsible for answering the question in a reasonable time frame, correct?

6) Who pays to complete PUD related items?

7) Is it safe to treat the management company as a Supplier and the Homeowners are the Customer?

8)What are typical expectations of Management company communicating to the Homeowners and helping them?

9) Are Developers usually behind the scenes people and rarely call open forums or make themselves available?

10) What is a PUD rider?

Appreciate your time and help.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sounds like your Developer controlled. If that is the case, let them be in control. The homeowner's will get to be next in line to take over. Once that happens then the owners will be responsible for all the expenses. They can decide to hire a management company.

Basically right now, your Developer owns and runs the POA. You have some rights but it's the Developer's show till turn over to put it simply.

Former HOA President

JoeB18 (Georgia)
Posts: 31

Posted:

Thank you for replying. My only problem is that the Developer is using Homeowners funds to complete improvement and infrastructure activities. Is this the norm and the right way to do things? In regards to Homeowners funds, The Homeowners have the rights to see invoices when Homeowners funds are being used right? That would be full transparency.
Appreciate your help.

DouglasM6 (Arizona)
Posts: 724

Posted:

Quote:

Posted By JoeB18 on 08/17/2017 8:28 PM
Hello,

I live in a decent sized community currently 256 houses with a total of 500 planned. The neighborhood is currently set up as a POA which is governed by the Board of Directors and they have selected a management company to manage the day to day activites. The Developer has selected a builder for the community. I would like to gain some perspective on a couple of items in regards to Developer and Homeowners responsible funding.

1) We currently pay yearly dues and from the yearly Financials the Homeowners are paying for legal fees, landscaping improvements (plant buying), irrigation system, pool repair etc. Is this normal?

2) Since this is a POA should the homeowners be funding every enhancement to the neighborhood i.e. planting in common areas and light poles etc.?

3)We currently only have 1 pool with a bathing capacity of 90 people and no clubhouse. Do Communities of around 500 houses usually only have 1 pool and no clubhouse? How can I find out if what we currently have is acceptable or outside the norm?

4) Do the Homeowners have the right to approach the management company executing for the POA for financial records i.e. invoices etc? How often should the POA be releasing financials?

5) If questions arise from reading the covenants dictated by the POA, the management Company should be responsible for answering the question in a reasonable time frame, correct?

6) Who pays to complete PUD related items?

7) Is it safe to treat the management company as a Supplier and the Homeowners are the Customer?

8)What are typical expectations of Management company communicating to the Homeowners and helping them?

9) Are Developers usually behind the scenes people and rarely call open forums or make themselves available?

10) What is a PUD rider?

Appreciate your time and help.

Quote:

Posted By JoeB18 on 08/18/2017 5:30 AM
Thank you for replying. My only problem is that the Developer is using Homeowners funds to complete improvement and infrastructure activities. Is this the norm and the right way to do things? In regards to Homeowners funds, The Homeowners have the rights to see invoices when Homeowners funds are being used right? That would be full transparency.
Appreciate your help.

I hope you are on the Board of Directors once your association get's turned over to the owners. From everything I've learned you are pretty much a passenger till that happens.

JoeB18 (Georgia)
Posts: 31

Posted:

i know that is the reality of the situation. The developer is also a council man. Is that sometime common? I can wrap my mind around why that is not a conflict of interest.

What about getting the PUD audited by the county? How long does the Developer have to satisfy the items on the PUD in regards to landscaping and infrastructure?

JeffT2 (Iowa)
Posts: 880

Posted:

You should contact the county (and other local government if any) about all of the plans and submissions of the developer, and ask to see all of the plans that were submitted. They can tell you about schedules, inspections and completions. See what your developer has promised to the government.

In general, the developer should pay for all of that, not the POA.

Look up your POA here to verify that it is non-profit corporation:

https://ecorp.sos.ga.gov/BusinessSearch

The Georgia Nonprofit Corporation Code is here:

http://law.justia.com/codes/georgia/2015/title-14/chapter-3/

click on Article 16 and read about access to records. You have the right to inspect the POA's financial records (as long as you follow the procedures).

GA may have additional laws for POA. I did not look into that.

JoeB18 (Georgia)
Posts: 31

Posted:

This is Awesome information. Thank you so much for the direction. I looked and the Group that is on the Covenant document is in the non-profit Corporation but the registered agent name is someone else who sits on the POA board. From what i found from the POA minutes the elected one person from the POA Board to be the President of the Board and to service as association CEO.

If i go thru the process and find out that the landscaping and possibly other items were paid out of POA funds that were gathered from Homeowner dues what recourse do we have as homeowners? Is there a process? The day to day maintenance like cutting the grass in the common areas and pool maintenance are handled thru POA funds from Homeowner dues right, that is typical?

Thanks

JoeB18 (Georgia)
Posts: 31

Posted:

One last thing. I read the code document you referenced. Would i be deemed a member even though it is an POA and not an HOA?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JoeB18 on 08/17/2017 8:28 PM
Hello,

I live in a decent sized community currently 256 houses with a total of 500 planned. The neighborhood is currently set up as a POA which is governed by the Board of Directors and they have selected a management company to manage the day to day activites. The Developer has selected a builder for the community. I would like to gain some perspective on a couple of items in regards to Developer and Homeowners responsible funding.

1) We currently pay yearly dues and from the yearly Financials the Homeowners are paying for legal fees, landscaping improvements (plant buying), irrigation system, pool repair etc. Is this normal? Depends on your governing documents and State Laws. In my state while the developer controls the developer is responsible for maintaining any property the developer has "reserved" the right to utilize. In my last HOA which was developer controlled the developer reserved the right to store materials on common area property. Because of that the developer was responsible for maintaining any common area property.

2) Since this is a POA should the homeowners be funding every enhancement to the neighborhood i.e. planting in common areas and light poles etc.? Look at your governing documents and also your local government's contract with the developer ... this document can be found at your local planning department office. In my area it is noted as an SIA (Site Improvement Agreement). If your local government required the developer to install light poles as part of their SIA agreement then potentially that would be the developers responsibility and not the HOA.

3)We currently only have 1 pool with a bathing capacity of 90 people and no clubhouse. Do Communities of around 500 houses usually only have 1 pool and no clubhouse? How can I find out if what we currently have is acceptable or outside the norm? Potentially when the development was initially approved with the number of homes by your local government it was noted that your pool would handle the capacity.

4) Do the Homeowners have the right to approach the management company executing for the POA for financial records i.e. invoices etc? How often should the POA be releasing financials? Homeowners have rights to any records noted in your governing documents and State Laws. Potentially as noted in most states financial information is to be provided at least at minimum each year at the annual meeting.

5) If questions arise from reading the covenants dictated by the POA, the management Company should be responsible for answering the question in a reasonable time frame, correct? Potentially depends on the question. The management company is not an attorney ... for some questions potentially the Owner is responsible for seeking their own answers.

6) Who pays to complete PUD related items? As noted in your Question 2 above ... you need to look at your governing documents and your developer's contract with the local government.

7) Is it safe to treat the management company as a Supplier and the Homeowners are the Customer? The Management Company is an "employee" of the HOA. The Board of Directors have the ultimate responsibility to oversee the Management Company. Keep in mind the overall "buck" starts and stops with the Board not the Management Company.

8)What are typical expectations of Management company communicating to the Homeowners and helping them? As per their contract.

9) Are Developers usually behind the scenes people and rarely call open forums or make themselves available? Depends on your developer. A smart developer will have the neighborhood involved with meetings. However, that is rare.

10) What is a PUD rider? Not sure as have not familiar with the term "PUD rider". I did find this link document from HUD referencing the "rider" issue: https://portal.hud.gov/hudportal/documents/huddoc?id=Model_PUD_Rider_9-2014.pdf

Appreciate your time and help.

JoeB18 (Georgia)
Posts: 31

Posted:

I am reviving an old conversation.

I emailed the Developer's attorney of my intentions to view financial/invoices associated with my Community based upon (Georgia Code Title 14 - CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS Chapter 3 - NONPROFIT CORPORATIONS Article 16 - RECORDS AND REPORTS Part 1 – RECORDS § 14-3-1602 - Members' right to copy and inspect records.)

Did I do this correctly?

If I did this correctly and they refuse to show me invoices associated with expenses incurred, what is the next step?

If I am able to view invoices associated with the expenses and find discrepancies what is the next step? Legal or non legal?