New Subdivision - Builder serving as Board Members

Started by PenelopeM • 8 replies • 1117 views

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PenelopeM (Idaho)
Posts: 3

Posted:

I live in a new home subdivision in Idaho. The builder's corporate employees currently constitute the HOA board (president, vice president, secretary) until the required percentage of homes sold is reached. Does this board owe a fiduciary duty to the homeowners just as elected board members would?

JanetB2 (Colorado)
Posts: 4,219

Posted:

We are not attorneys and state laws vary. However, I would contend your answer is yes. Your best course if you are new subdivision is to learn your governing documents and your State Statutes for your Association. This will help you to keep an eye on the developer and their actions while the subdivision is being constructed. I also would recommend about once per month to look up your subdivision via your County Records to see if the developer has filed any potential amendments to your CCR's. In my last HOA we caught the developer filing documents in violation of the state law. If we had not caught them ... in my state after one year we could not have pursued and would have been stuck with what the developer filed. They did it behind our backs hoping we would not find out until the one year statute of limitations had expired. Are you a Condo or Single Family homes?

PenelopeM (Idaho)
Posts: 3

Posted:

Thank you for your response - we are single family homes. We are just now seeing how much is being done without our knowledge. Today I discovered the board members have hired a property manager who is a registered sex offender. He routinely cruises the neighborhood for violations and on occasion leaves notes on homeowners' doors.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By PenelopeM on 08/26/2017 8:05 PM
Thank you for your response - we are single family homes. We are just now seeing how much is being done without our knowledge. Today I discovered the board members have hired a property manager who is a registered sex offender. He routinely cruises the neighborhood for violations and on occasion leaves notes on homeowners' doors.

Send a letter via "Certified Return Receipt" to your Board with your evidence. If they keep the property manager and something happens down the road (hope to god nothing happens) you will have proof via them signing for the letter where you have voiced your concern. However, also keep in mind that some individuals can end up on a sex offender list who sometimes when young had a fling with "consent" (they might have been 18 and girlfriend 16), and maybe the girlfriend was pressured by her family to file charges even though she consented and participated. Does it make it right ... no. However, does that really make that other person per se a really bad person when they maybe were in love?

Also, keep in mind in our Country after you serve your sentence ... you are supposed to maybe have a fresh start. While I understand your concern you might want to research the case and see what the circumstances are before condemning anyone.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Idaho has a Condominium Property Act but it appears your other laws are spread out for Single Family subdivision. Here is a link and at the bottom is other links for your various statutes:

https://www.hoa-usa.com/statelaws/id.aspx

What I did for my associations is I have a large binder with tabs. I put an extra copy of all my documents in the binder along with a copy of my appropriate State Statutes (however, keep in mind the statutes can change periodically ... not often but you need to check periodically). I then sat down and read all the documents with a highlighter (used orange for Developer) and every time I saw the word Developer or Declarant I highlighted that word. This helped me to quickly see what developer rights were vs the owner rights. Did the same thing with various colors highlighting pertinent info such as Board responsibilities, Owner rights, etc. Then if I ever had a Developer question I could quickly review any issue.

PenelopeM (Idaho)
Posts: 3

Posted:

Well said, Janet. I totally agree with you on all points and appreciate your advice. This man served time eleven years ago at age 52. He was convicted of 3rd degree sodomy and indecent liberties. What bothers me is that our neighborhood is full of children from tiny to teen. That doesn't mean that something will happen, but if I were a parent, I'd admittedly be totally upset under these circumstances. Certified letter sounds like the next step. Plus, I need to find out whether a pre-transition board of directors owes a fiduciary duty to homeowners.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Here you go:

http://www.ag.idaho.gov/publications/consumer/ServiceOnNonprofit.pdf

This is from Attorney General and discusses duty and care.

KerryL1 (California)
Posts: 14,550

Posted:

Janet gave you some resources where'll you'll see the extent to which the developer's board has a fiduciary obligation to Owners. first, there should be verbiage in your convents or declaration (aka CC&Rs) about the board's obligations.

2nd, assuming your HOA is incorporated, ID's corporations code should address this.

My guess (not in legal field) is no matter who's on the Board they have a fiduciary relationship with Owners and must practice their duty of care and of loyalty.

HomE (Washington)
Posts: 29

Posted:

Check the governing documents. It should outline the duty. It's very standard for things to be setup like this. Why would you need an HOA in a neighborhood though?

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