Developer exempt from HOA dues

We are a new association of one year. In our restrictions received when we purchased our property the developer exempt himself from paying Hoa dues. That was clear on the restrictions. My question is does he have the legal right to vote since he is not paying dues?

Doris

It sounds like your association is still under developer/Declarant control and as such they can pretty well do as they wish. Many will not buy into an association while still under Declarant control for this very reason.

What they are doing is quite common.

You developer will pay dues eventually per se. It is called funding your reserves. Every HOA has or should have a reserve account that covers your
operating expenses and or emergency spending.

check your by-laws

Whether they pay into reserves or not, they are probably making up any shortfall between what is taken in from homeowners and what it costs to maintain the association. This will be higher early on when few homes are sold and will taper off as more are.

The association is not under the developer. We have filed all the paperwork for the home owners to run the association. It is clear to us that he does not have to pay association fees according to the deed restrictions. The question is since he is not paying like the rest of the homeowners is there something legal under homeowner association that give him the right to vote. We have 41 lots of which 32 are homeowners and one lot is owned by someone who has not built on it as of this writing and the developer has 5 empty lots and three houses built that have not been sold.

What do your bylaws say that defines "voting Member"?

LOL ... Your State enacted the 2008 UCIOA (Uniform Common Interest Ownership Act)

You might want to consult with an attorney. Because the UCIOA pretty much gives equal rights to Developers, Mortgage Lenders, and Owners. LOL ... your Developer can put anything he wants in your CCR's; however, if anything he puts in them violates your State Law ... it potentially becomes "NULL and VOID".

Per: http://delcode.delaware.gov/title25/c081/index.shtml

§ 81-307 Upkeep of common interest community.

(a) Except to the extent provided by the declaration, subsection (b) of this section, or § 81-313(h) of this title, the association, through its executive board, is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of the unit owner's unit. Each unit owner shall afford to the association and the other unit owners, and to their agents or employees, as designated by the executive board, access through the unit owner's unit reasonably necessary for those purposes. If damage is inflicted on the common elements or on any unit through which access is taken, the unit owner responsible for the damage, or the association if it is responsible, is liable for the prompt repair thereof. Each unit owner is likewise responsible for the costs, as determined by the association, associated with the maintenance, repair and replacement of limited common elements appurtenant to the unit owner's unit or for the prorated expense if the limited common element is associated with more than one unit. The executive board shall determine when and to what extent such maintenance, repair and replacement shall be required.

(b) In addition to the liability that a declarant as a unit owner has under this chapter, the declarant alone is liable for all expenses in connection with real estate subject to development rights. No other unit owner and no other portion of the common interest community is subject to a claim for payment of those expenses. Unless the declaration provides otherwise, any income or proceeds from real estate subject to development rights inures to the declarant.

LOL ... I have been in royal battle (lawsuit) in past with developer. My state is also based on UCIOA and has similar above statute. YEP ... when at one point our developer wanted to impose association fees ... I asked what the fees were to pay for. When developer noted was for the "common area property" I informed the developer that as noted in our CCR's under Section X that they had "reserved" the right to use said property as part of their "development rights". Therefore, the Developer was responsible for the upkeep and cost of said "common area" until such time as they no longer had any such "reserved development rights" to the common area. I also added that per the State Statute the developer was supposed to have transferred the common area property to the HOA "prior" to selling homes and which was not yet done ... therefore, potentially our HOA did not yet "own" the supposed common area property which they were wanting to assess association fees. LOL .... YEP the developer did not like me much after engaged in law violations. And in answer to your question ... the developer is a UNIT owner for any lots or units they own ... and potentially cannot exempt themselves from paying for those units if legally charging others. YEP ... this is why many in my area do not charge owners until they are ready for turnover ... because they know they will pay the same as others for their own units.

What you have to next keep an eye on is when HOA transfers to the owners. You are a new association of one year per your comment so take note of the following under your State Statutes which was noted in our Court case:

§ 81-303 Executive board members and officers.

(c) Subject to subsection (d) of this section, the declaration may provide for a period of declarant control of the association, during which a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the executive board. Regardless of the period provided in the declaration, and except as provided in § 81-223(g) of this title, a period of declarant control terminates no later than the earlier of: (i) except as to a nonresidential common interest community, 60 days after conveyance of 75 percent of the units that may be created to unit owners other than a declarant; (ii) as to units for residential purposes, 2 years after all declarants have ceased to offer units for residential purposes for sale in the ordinary course of business; (iii) as to units for residential purposes, 2 years after any right to add new units for residential purposes was last exercised; (iv) as to a common interest community other than a condominium or cooperative, at such time as may be required by other applicable laws; or (v) as to nonresidential units in a common interest community that is subject to this chapter, 7 years after all declarants have ceased to offer nonresidential units for sale in the ordinary course of business; (vi) as to nonresidential units in a common interest community that is subject to this chapter, 7 years after any right to add new nonresidential units was last exercised; or (vii) the day the declarant, after giving written notice to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.

YEP ... If your CCR's and FINAL PLAT note a total of X Numbers of Lots to be built AND if your developer DID NOT "reserve" the right to add more lots to the subdivision ... potentially their "developer control" of the HOA ends TWO (2) YEARS after the developer filed their "final plat" with your County Records. Under UCIOA and some State Laws the Developer is not meant to have perpetual control (never ending) of the HOA.

(d) Not later than 60 days after conveyance of 25 percent of the units that may be created to unit owners other than a declarant, at least one member and not less than 25 percent of the members of the executive board must be elected by unit owners other than the declarant. Not later than 60 days after conveyance of 50 percent of the units that may be created to unit owners other than a declarant, not less than 33 1/3 percent of the members of the executive board must be elected by unit owners other than the declarant.

The above Statutes are for single family homes ... but will be similar for Condo. Let me know if you are not Single Family home.