Desperate-Developer changed docs to remain in control after turnover!

Started by MaureenS4 • 22 replies • 1859 views

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MaureenS4 (Florida)
Posts: 8

Posted:

Our 148 home Florida HOA is meeting to turnover from Builder/Developer/Declarant TOMORROW. Our current Transition Committee (TC) will be appointed as Interim Board until we have our Special Meeting and vote in our first board. Builder rewrote our docs JUST LAST WEEK to include himself as a board member and remain with complete veto power over the future board decisions-- if he feels anything interferes with his ability to develop further in our community and so chooses--as long as he owns one (1) lot here, which he does. Verbiage says "lot" but he also has several model homes and is counting them too. Those of us on the TC planning to serve as the interim board have NO IDEA where to go next! We haven't funds yet to hire an attorney to challenge him and are not familiar enough with FL Statues regarding Builder SELF APPOINTED involvement after turnover. We're LOST. We will NEVER be able to find volunteers to help manage the community with the Builder still in charge -- because Builders BUILD. They don't manage the community in the best interest of residents, they only want to push all kinds of crap through (ok for no sidewalk in front of one house, ok for fence on one salt water lot, crazy paint colors --- all when the docs say completely the contrary) so we haven't clue if we have any leg to stand on!! In addition, he's still on our board so how can we seek counsel without him everywhere?
PLEASE, someone out there with experience tell me what to advise our oncoming Board!!!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Maureen

You are implying the developer/builder is not done building. If so, how many more lots do they have to build on? The turnover might be premature and even if an elected BOD, under the terms you stated it is in reality an "advisory" BOD.

MaureenS4 (Florida)
Posts: 8

Posted:

He has 2 vacant lots left and 3 or 4 model/feature homes in our total of 148 home sites. Can we "refuse" turnover or delay it?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Here is what I would suggest: Once the turnover happens the owner's own the HOA, so change the paperwork on file. Two can play at that game. If you own something, can you not change the rules? I'd make sure the paperwork the builder files is at the courthouse first and not hearsay.

When you file the paperwork you change the way votes are done. Which is 1 vote per lot. Previously the builder had a majority level of votes. Having 1 vote per lot and getting rid of the other class of voting will right that issue.

Ask the builder are they ready to turn over? They really aren't going to make a profit by staying in charge. The point of turning over to owners is to get out of the long term expenses. So don't see why they need to stay unless there are some financial issues you may want to find out about.

Former HOA President

MaureenS4 (Florida)
Posts: 8

Posted:

Thanks very much for taking the time to share your experience with me!!
Yes the Doc changes were filed by the Builder ("DECLARANT") at the county courthouse on 8/21/17. We (the Transition Committee, soon to be the Interim Board) talk about changing the Docs but the Builder wrote himself in to maintain a seat on the BOARD and also added text to our Docs with power to "veto". Docs now state: "Declarant shall have the right to veto any action taken by the BOARD if the DECLARANT determines that such action materially and adversely affects the DECLARANT'S interest in the community." This is quite ambiguous and they have the power to define what adversely affects them. The next paragraph defines some specifics regarding DECLARANT'S RIGHTS and lists that we may not block access at the front gate to anyone they wish to grant access to, we shall not increase any fees, we may not change any contracts in effect (landscaping, prop mgmt, security company, etc.) It is all terribly one sided and we are lost as to what our rights actually are. We can't even consult and spend money on an attorney with out DECLARANT'S approval to do so. Are we just SCREWED? CAN WE BLOCK OR REFUSE TURNOVER UNDER THESE TERMS?

KerryL1 (California)
Posts: 14,550

Posted:

With the developer's "new" declaration, is there any way the Owners can change the declaration? Often it's a %, say 67% or even higher. In other words, does this new doc say HOW the declaration can be "amended"? If it doesn't, I'm not so sure that's valid declaration.

I'm curious about the "fees" that may not be increased. Are they defined??

I do think that several of you Owners can chip in together to get an opinion from an HOA attorney. (I have no turnover or legal experience.)

I think you'll get some good advice from some of our savvy FL posters, but maybe not till after the holiday.

JanetB2 (Colorado)
Posts: 4,219

Posted:

720.307 Transition of association control in a community.—With respect to homeowners’ associations:

(3) The developer is entitled to elect at least one member of the board of directors of the homeowners’ association as long as the developer holds for sale in the ordinary course of business at least 5 percent of the parcels in all phases of the community. After the developer relinquishes control of the homeowners’ association, the developer may exercise the right to vote any developer-owned voting interests in the same manner as any other member, except for purposes of reacquiring control of the homeowners’ association or selecting the majority of the members of the board of directors.

So let's see 5% of 148 = 7.4 homes. You need to "double check" and see how many units (homes & lots) the developer owns. Potentially if he only has 4 houses still and two lots ... he would not be entitled to appoint himself as a Board member ... unless he is properly elected by all other owners. Remember also as an Owner, if he gets elected that would be fair and not violate this section.

Then you also have:

720.3075 Prohibited clauses in association documents.—
(1) It is declared that the public policy of this state prohibits the inclusion or enforcement of certain types of clauses in homeowners’ association documents, including declaration of covenants, articles of incorporation, bylaws, or any other document of the association which binds members of the association, which either have the effect of or provide that:
(a) A developer has the unilateral ability and right to make changes to the homeowners’ association documents after the transition of homeowners’ association control in a community from the developer to the nondeveloper members, as set forth in s. 720.307, has occurred.
(b) A homeowners’ association is prohibited or restricted from filing a lawsuit against the developer, or the homeowners’ association is otherwise effectively prohibited or restricted from bringing a lawsuit against the developer.
(c) After the transition of homeowners’ association control in a community from the developer to the nondeveloper members, as set forth in s. 720.307, has occurred, a developer is entitled to cast votes in an amount that exceeds one vote per residential lot.
Such clauses are declared null and void as against the public policy of this state.
(2) The public policy described in subsection (1) prohibits the inclusion or enforcement of such clauses created on or after the effective date of s. 3, chapter 98-261, Laws of Florida.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Maureen

It seems the developer is trying to protect his remaining interests and for this I cannot blame him. The problem I see is he is trying to hard to remain in control. It is time for a group of you to get together and hire an attorney concerning the developer having not only veto power but also an automatic seat on the BOD. Protecting his interest is one thing. Controlling the HOA is another.

KerryL1 (California)
Posts: 14,550

Posted:

Janet's citations look good. But are you under FL codes 718 or 720, Maureen?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By KerryL1 on 09/04/2017 1:49 PM
Janet's citations look good. But are you under FL codes 718 or 720, Maureen?

The above statutes are from 720. When Maureen mentioned lots and houses ... I figured was appropriate area, but Kerry is right you need to let us know if you are Single Family homes or Condos.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JanetB2 on 09/04/2017 1:57 PM

Posted By KerryL1 on 09/04/2017 1:49 PM
Janet's citations look good. But are you under FL codes 718 or 720, Maureen?

The above statutes are from 720. When Maureen mentioned lots and houses ... I figured was appropriate area, but Kerry is right you need to let us know if you are Single Family homes or Condos.

Either way, can we agree it is a task best taken on by an attorney?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JohnC46 on 09/04/2017 2:02 PM

Posted By JanetB2 on 09/04/2017 1:57 PM

Posted By KerryL1 on 09/04/2017 1:49 PM
Janet's citations look good. But are you under FL codes 718 or 720, Maureen?

The above statutes are from 720. When Maureen mentioned lots and houses ... I figured was appropriate area, but Kerry is right you need to let us know if you are Single Family homes or Condos.

Either way, can we agree it is a task best taken on by an attorney?

They will need one, but may be difficult to find a good one before tomorrow meeting. Would be nice if they could have one attend and not let developer initially try his BS. Then will need one to roll back latest Amendment to the documents.

KerryL1 (California)
Posts: 14,550

Posted:

Janet's citations look good. But are you under FL codes 718 or 720, Maureen?

MaureenS4 (Florida)
Posts: 8

Posted:

We are a 148 home community of single family homes and fall under Chapter 720 of the FL Statutes.
DELCARANT (Builder) modified the Docs prior to turnover meeting (which is TONIGHT at 5:30pm EST).
We understand it's his right to change them. They are changed and registered with our county. His secretary emailed them to us a week ago. We understand as long as he owns lots or homes in here he has as many votes as he has properties. We understand he is looking out for his best interest. He wants more power than his votes allow him.

Many of the FL Statutes are difficult for me to understand the bottom line. Please help me answer the following:

1) Can a DECLARANT (Builder) re-write an HOA Doc in THIS WAY that gives him all this leverage for after the turnover? Is there anything in the FL Statutes that protects the HOA from the DECLARANT from this strong hold at any point?

2) Can an HOA REFUSE TURNOVER and push it out longer until the builder is finished building in the community or does FL law REQUIRE us to take turnover at the 90% mark?

3) Is the HOA REQUIRED to allow the DECLARANT a seat on the new board?

DaveD3 (Michigan)
Posts: 796

Posted:

What has an attorney said regarding the developer's actions and the state law?

There's no way I would accept a turnover at this point until that's been answered.

MaureenS4 (Florida)
Posts: 8

Posted:

Janet,
How would I find out if our community is part of a larger "phase"?
Now I'm wondering if he is including other surrounding neighborhoods he has developed and identifying them all as separate communities but part of the same "phase".
Maureen

MaureenS4 (Florida)
Posts: 8

Posted:

The DECLARANT (Builder) is still in control and we have no authority to spend funds on an attorney. Turnover meeting is tonight.

Can we "refuse" turnover anywhere legally per FL Statutes?

The DECLARANT (builder's company) is owned by a guy who made a bid for Marco Rubio's senate seat last fall. His political connections and legal power are STRONG.

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By MaureenS4 on 09/05/2017 10:31 AM
The DECLARANT (Builder) is still in control and we have no authority to spend funds on an attorney. Turnover meeting is tonight.

Can we "refuse" turnover anywhere legally per FL Statutes?

The DECLARANT (builder's company) is owned by a guy who made a bid for Marco Rubio's senate seat last fall. His political connections and legal power are STRONG.

Sure you have the authority to spend money.
At this point, you're individual homeowners who have the capability to jointly or individually retain an attorney and pay for any such consultation yourself.

If you spend money out of your own pocket, it's YOUR money
If you spend money out of the HOA budget, it's still YOUR money

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By MaureenS4 on 09/05/2017 10:28 AM
Janet,
How would I find out if our community is part of a larger "phase"?
Now I'm wondering if he is including other surrounding neighborhoods he has developed and identifying them all as separate communities but part of the same "phase".
Maureen

Your local government Planning Department could answer that question.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Generally different "Phases" happen within the same Subdivision.

One example would be a subdivision started but the developer only wanted to build on part of the land. He would subdivide and build on that part and "reserve" the right to add more lots to the subdivision from the adjoining property. The Final Plat would also possibly note the information. It also for many states is required to be noted in your CCR's.

Another example would be a developer who starts with a large land area and divides out for building Condos in one area, Townhomes in another, and Single Farmily in yet another, etc. In this scenario the developer usually sets up a Master Association and then separate other Associations under the Master for the various areas because in some states condo law varies from other homes. Each smaller area has their own BOD and then has one of their BOD members represent them under the Master Association Board. Phase 1 might be the Condos, Phase 2 the Single Family, etc.

Do your CCR's somewhere toward the beginning describe your HOA and how many total units it will contain??? If it happens to state 148, then phases would not apply.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By MaureenS4 on 09/05/2017 10:20 AM
We are a 148 home community of single family homes and fall under Chapter 720 of the FL Statutes.
DELCARANT (Builder) modified the Docs prior to turnover meeting (which is TONIGHT at 5:30pm EST).
We understand it's his right to change them. They are changed and registered with our county. His secretary emailed them to us a week ago. We understand as long as he owns lots or homes in here he has as many votes as he has properties. We understand he is looking out for his best interest. He wants more power than his votes allow him.

Many of the FL Statutes are difficult for me to understand the bottom line. Please help me answer the following:

1) Can a DECLARANT (Builder) re-write an HOA Doc in THIS WAY that gives him all this leverage for after the turnover? A Declarant can re-write HOA docs until turnover and put anything they want in the document. However, they CANNOT violate State or Federal Laws. Anything they put in the document which violates the Law becomes VOID and the Law is to be followed. Is there anything in the FL Statutes that protects the HOA from the DECLARANT from this strong hold at any point? Yes ... there are items in your State Law and some have been noted above. You need to learn to understand them or you need to hire an attorney. The statutes are public information and yes can be difficult to understand. As you read lots they will become easier to understand. Refer to the section definitions will also help understand ... the definitions will be your friend.

2) Can an HOA REFUSE TURNOVER and push it out longer until the builder is finished building in the community or does FL law REQUIRE us to take turnover at the 90% mark? In order for turnover to take place any meeting would need to meet your guidelines such as properly noticed and called, quorum obtained, and then the owners voting to fill the Board positions. Unless you have some costly HOA structural issues which the developer has not yet taken care of as his financial responsibility ... my opinion would be to go ahead and take over the HOA. Keep in mind all other Board Members can out vote the One Developer, even if he claims he gets one seat on the Board. This will give you better access to information and funds to fight, if needed in future. But things could go smoothly and all work out well from the start. You will not know until you jump in ...

3) Is the HOA REQUIRED to allow the DECLARANT a seat on the new board? If he has 7.4 or more units in the HOA then yes, until such time as he has less than 7.4 units which would be 5% of your 148 total. If he has less than 7.4 units then No as long as your 148 number is correct.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Would be nice if we had a couple minutes to make corrections ....

Quote:

DouglasM6 (Arizona)
Posts: 724

Posted:

Quote:

Posted By MaureenS4 on 09/04/2017 7:40 AM
Our 148 home Florida HOA is meeting to turnover from Builder/Developer/Declarant TOMORROW. Our current Transition Committee (TC) will be appointed as Interim Board until we have our Special Meeting and vote in our first board. Builder rewrote our docs JUST LAST WEEK to include himself as a board member and remain with complete veto power over the future board decisions-- if he feels anything interferes with his ability to develop further in our community and so chooses--as long as he owns one (1) lot here, which he does. Verbiage says "lot" but he also has several model homes and is counting them too. Those of us on the TC planning to serve as the interim board have NO IDEA where to go next! We haven't funds yet to hire an attorney to challenge him and are not familiar enough with FL Statues regarding Builder SELF APPOINTED involvement after turnover. We're LOST. We will NEVER be able to find volunteers to help manage the community with the Builder still in charge -- because Builders BUILD. They don't manage the community in the best interest of residents, they only want to push all kinds of crap through (ok for no sidewalk in front of one house, ok for fence on one salt water lot, crazy paint colors --- all when the docs say completely the contrary) so we haven't clue if we have any leg to stand on!! In addition, he's still on our board so how can we seek counsel without him everywhere?
PLEASE, someone out there with experience tell me what to advise our oncoming Board!!!

What exactly are your fears?
The builders normally want to stay "in charge" as long as it takes to make sure no changes are made that would violate the CC&R's the rest of the community agreed to when they purchased.
I really don't see your builder doing anything except preventing changes that would effect the sale of the last lots/homes.

My other question is What changes are you (the BOD) planning to make that you think the builder will oppose? Changes for the better would probably pass, no?

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