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DougA2 (Iowa)
Posts: 2
Posted:
WE are looking to procure a house in a 55+ community in florida that has around 6000 homes and is about 75% sold out. In doing some research I found out that some of the home owners have filed a law suit against the builder because he wants to sell the common assets back to the HOA. (The finance would be done through a CDD to cover the sale over 30 years). The builder also wants to sell the assets at what an HOA hired appraiser says is 3x the current appraised value. The real estate person we talked to thinks the lawsuit will get dismissed and the HOA will have to buy the assets at whatever price the builder has decided. However with the reading I have done on this web site it seems like there is no way that the builder would or should win this case. I guess my question comes down to: 1)are builders required to give the common assets to the HOA 2)could a builders write a contract such that the assets are really his and he can do what ever he wants to do with them. 3) I thought that the HOA monies paid to the developer had to be used for the running of the common areas and escrowing. (the real estate person we have been talking to made it sound like the running of the common areas has been a great "cash cow" for the builder, and that is why he wants so much money for the assets)
MelissaP1 (Alabama)
Posts: 13,836
Posted:
My biggest worry isn't the details of the lawsuit itself. That could/would come later if you become a member. You will then become a participant in the lawsuit. The lawsuit details is word of mouth at this point.

The worry I have is when any HOA is involved in a lawsuit. No matter if small or large. The lenders will take this into consideration when offering loan packages. That could mean not offering FHA type loans, higher rates, or re-finance rate increase. Your also could be walking into a special assessment or raised dues situation. HOA dues can make the difference between buying a 100K house with HOA or a 125K house in a non-HOA. Think of that HOA dues as part of your mortgage payment.

Make sure to get a copy of the CC&R's, By-laws, and Articles of Incorporation prior to buying. You want to know those details to know what the HOA has a right to do.

Former HOA President
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Doug

I would be scared as Mel said, who knows what will happen and when. If this suit aside, if the place meets your desires, consider a rent/lease with option to buy and wait the decision out.
JanetB2 (Colorado)
Posts: 4,219
Posted:
It would be a cold day down below before I ever purchased a home in FL with any developer control. FL gives too much power to developers which in other states could be considered real estate fraud. Also, if potential lawsuit I would run ... far and fast. As Melissa noted ... if you purchase you could be on hook for future legal bills incurred after purchase.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JanetB2 on 10/21/2017 9:05 PM
It would be a cold day down below before I ever purchased a home in FL with any developer control. FL gives too much power to developers which in other states could be considered real estate fraud. Also, if potential lawsuit I would run ... far and fast. As Melissa noted ... if you purchase you could be on hook for future legal bills incurred after purchase.

I agree with Janet. I would be leery of buying in a development still under developer control. That said, some of the largest developments in FL, such as The Villages, will always be under developer control (as they keep building) yet people are flocking there. Those that I know living there (4 couples) love it.

ElaineP3 (South Carolina)
Posts: 47
Posted:
An HPR/POA with no common area property after 11 years
(Exculpatory clauses in favor of developer are a challenge)
Many developers will have exculpatory clauses drafted into the documents. If those clauses were drafted by the developer or developer’s attorney, they should probably be void as against public policy.
According to the Map and Zoning department our entire community is just a null parcel.
An HPR/POA with no boundaries or legal common areas other than a right of use permits for another community’s pool.
Oddly, all the phase lines on the plat map stated to disappear after the recording of each phase so ownership claim to the property is in question because the lines disappeared. Technically, we do not own the buildings, mailbox, dumpster, other improvements or the entrance and exit areas because the county records state they still belong to the developer.
While the buildings and surrounding property are a null parcel, encroached upon by the developer in the front and rear of this development and all initial statements in the Master deed appear void by the exculpatory clauses in favor of developer inserted into the middle of the document.
In a Horizontal Property Regime, the co-owners of an HPR/POA association should own the land under the footprint of the structures like a townhome. The buildings, land surrounding and the supporting structures and improvements, should be shared common area, co-owned by tenants in common and managed by the Property Owners Association but to this very day not owned, just maintained.
In a Horizontal Property Regime, all of the homeowners collectively own a percentage of the common area property. In our case it would be 1.78% per condo unit. The entire exterior of the structures and all the associated land should be owned and maintained by the HPR/POA other than areas specifically designated as the owners responsibility like the inside of their condominium and limited common area like their porches.
Realtors are still offering condos on this property, sold in 2006 as an HPR/POA as an HOA associated with a nice Golf Club when it is actually just an eleven-year-old null parcel with no visible amenities.
This community not associated at all with the original golf course amenity that coincidently will not allow any owner from our property even pay to be a member is now our retirement investment.
What would you do first? Run?
GwenG (Florida)
Posts: 669
Posted:
@ Elaine: There are a lot of hypotheticals in your post so it is hard to pin down the complaint. And what the heck is an HPR and a null parcel? Read up on exculpatory clauses in contracts; in general they are disfavored by courts and non-enforceable. Since you own none of the common facilities and properties, you should have a very low assessment fee. That might be attractive to a buyer. Why run?

@Doug: I echo Janet-never buy a developer-owned property and Run Fast if looking in Florida! The HOA you are considering has many Caution Flags--not the least of which is a lawsuit. However, if you are in love, at least get a recorded copy of the documents and talk to an attorney. This scenario does not sound kosher! Generally, builders FREELY convey common properties after a certain time or sales formula is reached. SELL common properties at 3X appraised value? Who would sign up for such a thing? Read your documents and get the truth.
ElaineP3 (South Carolina)
Posts: 47
Posted:
Horizontal property regimes usually require the creation of a property owner’s association POA, because the residents of the respective structures will all become co-owners of the same property. The property owner’s association will define the legal obligations and rights of each party. POA Officers and Board members are fiduciaries.

A Null parcel is a property term that the county uses for something that is not currently taxed because it was never transfered or annexed into the regime.

We paid cash for the property when it was just built in 2006 and it has still not recovered close to what we paid for it since the crash of 2008. The developer has the entire local real estate attorney market on retainer or have used them before so conflict of interest has got the upper hand.

The people around here, attorneys and management companies appear to be attracted to the shine of Gold versus integrity. The last two attorneys I paid told me they couldn't make this big a player/developer do anything. So we got stuck with half a property. A condo with no common area and nothing we can do about it per last attorney. We thought we were buying an HOA with shared golf course amenities but none of that was true on anything but the closing paperwork. Paying more money for a paid for property that is still underwater seems just as mindless as buying it in the first place. (are builders always required to transfer common areas to HOA's) No....and they can keep them until the statute of limitations runs out.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Quote:
Posted By DougA2 on 10/21/2017 8:00 AM
WE are looking to procure a house in a 55+ community in florida that has around 6000 homes and is about 75% sold out. In doing some research I found out that some of the home owners have filed a law suit against the builder because he wants to sell the common assets back to the HOA. What do you mean by "sell back" to the HOA? Did the HOA in past sell them to the Developer? This needs further clarification. (The finance would be done through a CDD to cover the sale over 30 years). The builder also wants to sell the assets at what an HOA hired appraiser says is 3x the current appraised value. The real estate person we talked to thinks the lawsuit will get dismissed and the HOA will have to buy the assets at whatever price the builder has decided. However with the reading I have done on this web site it seems like there is no way that the builder would or should win this case. I guess my question comes down to: 1)are builders required to give the common assets to the HOA Depends on what the CCR's state and your State Laws. In my state of CO the developer is supposed to place all HOA property under the HOA before selling any property to consumers. This varies in different states. 2)could a builders write a contract such that the assets are really his and he can do what ever he wants to do with them I have seen this in FL where the Developer will control items such as golf course, club house, pools, etc. and have a Contract with the HOA requiring X amount of money for the HOA to be members of the "Club" property ran by the developer. 3) I thought that the HOA monies paid to the developer had to be used for the running of the common areas and escrowing. (the real estate person we have been talking to made it sound like the running of the common areas has been a great "cash cow" for the builder, and that is why he wants so much money for the assets). This is one reason why I would not buy any property in FL under Developer control. In some of these the Developer has been known to set themself up as the Property Management company and will retain perpetual control lining their pockets with a salary.


Now ... if the CCR's note the area as "common area" and supposed to be deeded to the HOA. That could be good, but you need to have a good attorney do some digging and research. Also, if the developer has advertised stating that the amenities are included in the HOA that could help. FL 720 for single family homes states:

720.402 Publication of false and misleading information.—
(1) Any person who, in reasonable reliance upon any material statement or information that is false or misleading and published by or under authority from the developer in advertising and promotional materials, including, but not limited to, a contract of purchase, the declaration of covenants, exhibits to a declaration of covenants, brochures, and newspaper advertising, pays anything of value toward the purchase of a parcel in a community located in this state has a cause of action to rescind the contract or collect damages from the developer for his or her loss before the closing of the transaction. After the closing of the transaction, the purchaser has a cause of action against the developer for damages under this section from the time of closing until 1 year after the date upon which the last of the events described in paragraphs (a) through (d) occurs:
(a) The closing of the transaction;
(b) The issuance by the applicable governmental authority of a certificate of occupancy or other evidence of sufficient completion of construction of the purchaser’s residence to allow lawful occupancy of the residence by the purchaser. In counties or municipalities in which certificates of occupancy or other evidences of completion sufficient to allow lawful occupancy are not customarily issued, for the purpose of this section, evidence of lawful occupancy shall be deemed to be given or issued upon the date that such lawful occupancy of the residence may be allowed under prevailing applicable laws, ordinances, or statutes;
(c) The completion by the developer of the common areas and such recreational facilities, whether or not the same are common areas, which the developer is obligated to complete or provide under the terms of the written contract, governing documents, or written agreement for purchase or lease of the parcel; or
(d) In the event there is not a written contract or agreement for sale or lease of the parcel, then the completion by the developer of the common areas and such recreational facilities, whether or not they are common areas, which the developer would be obligated to complete under any rule of law applicable to the developer’s obligation.
Under no circumstances may a cause of action created or recognized under this section survive for a period of more than 5 years after the closing of the transaction.
(2) In any action for relief under this section, the prevailing party may recover reasonable attorney’s fees. A developer may not expend association funds in the defense of any suit under this section.

But ... as we all have stated ... it could be a very costly lawsuit which you could end up paying a portion of if you purchase. If you absolutely love the place and have bottomless pockets ... be sure to hire a good attorney to represent yourself and check out the situation before purchasing.
ElaineP3 (South Carolina)
Posts: 47
Posted:
Also, the median HOA, POA fees in our area are $298 and our fee with no amenities is currently $337 and the board president wants to raise it to $350 Time to buy a 100'X 16'Sumerset Houseboat!
ElaineP3 (South Carolina)
Posts: 47
Posted:
For those not familiar with HPR/POA...they are simular to HOAs but you are an owner of a percentage of of the entire common area, a tenant in common with the other co-owners.

South Carolina Code of Laws
Unannotated
Title 27 - Property and Conveyances
CHAPTER 31
Horizontal Property Act
ARTICLE 1
General Provisions
SECTION 27-31-10. Short title.
This chapter shall be known as the "Horizontal Property Act."
HISTORY: 1962 Code Section 57-494; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-20. Definitions.

Unless it is plainly evident from the context that a different meaning is intended, as used herein:

(a) "Apartment" means a part of the property intended for any type of independent use (whether it be for residential, recreational, storage, or business) including one or more rooms or enclosed spaces located on one or more floors (or parts thereof) in a building or if not in a building in a separately delineated place whether open or enclosed and whether for the storage of an automobile, moorage of a boat, or other lawful use, and with a direct exit to a public street or highway, or to a common area leading to such street or highway;

(b) "Building" means an existing or proposed structure or structures, containing in the aggregate two or more apartments, comprising a part of the property;

(c) "Condominium ownership" means the individual ownership of a particular apartment in a building and the common right to a share, with other co-owners, in the general and limited common elements of the property;

(d) "Co-owner" means a person, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof, who owns an apartment within the building;

(e) "Council of co-owners" means all the co-owners as defined in subsection (d) of this section; but a majority, as defined in subsection (h) of this section, shall, except as otherwise provided in this chapter, constitute a quorum for the adoption of decisions;

(f) "General common elements" means and includes:

(1) The land whether leased or in fee simple and whether or not submerged on which the apartment or building stands; provided, however, that submerged land developed or used under this chapter is subject to any law enacted relating to the leasing of submerged lands by the State for the benefit of the public;

(2) The foundations, main walls, roofs, halls, lobbies, stairways, moorages, walkway docks, and entrance and exit or communication ways in existence or to be constructed or installed;

(3) The basements, flat roofs, yards, and gardens, in existence or to be constructed or installed, except as otherwise provided or stipulated;

(4) The premises for the lodging of janitors or persons in charge of the property, in existence or to be constructed or installed, except as otherwise provided or stipulated;

(5) The compartments or installations of central services such as power, light, gas, cold and hot water, refrigeration, reservoirs, water tanks and pumps, and the like, in existence or to be constructed or installed;

(6) The elevators, garbage incinerators, and, in general, all devices or installations existing or to be constructed or installed for common use;

(7) All other elements of the property, in existence or to be constructed or installed, rationally of common use or necessary to its existence, upkeep, and safety;

(g) "Limited common elements" means and includes those common elements which are agreed upon by all the co-owners to be reserved for the use of a certain number of apartments to the exclusion of the other apartments, such as special corridors, stairways, elevators, finger piers, sanitary services common to the apartments of a particular floor, and the like;

(h) "Majority of co-owners" means fifty-one percent or more of the basic value of the property as a whole, in accordance with the percentages computed in accordance with the provisions of Section 27-31-60.

(i) "Master deed" or "master lease" means the deed or lease establishing and recording the property of the horizontal property regime;

(j) "Person" means an individual, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof;

(k) "Property" means and includes (1) the land whether leasehold or in fee simple and whether or not submerged, (2) the building, all improvements, and structures on the land, in existence or to be constructed, and (3) all easements, rights, and appurtenances belonging thereto;

(l) "To record" means to record in accordance with the provisions of Sections 30-5-30 through 30-5-200, 30-7-10 through 30-7-90 and 30-9-10 through 30-9-80, or other applicable recording statutes.

HISTORY: 1962 Code Section 57-495; 1962 (52) 1866; 1966 (54) 2314; 1967 (55) 449; 1970 (56) 2572; 1973 (58) 783; 1984 Act No. 463, Section 1; 1999 Act No. 86, Section 1.

SECTION 27-31-30. Establishment of horizontal property regime.

Whenever a lessee, sole owner, or the co-owners of property expressly declare, through the recordation of a master deed or lease, which shall set forth the particulars enumerated in Section 27-31-100, their desire to submit their property to the regime established by this chapter, there shall thereby be established a horizontal property regime. Property may be submitted to a horizontal property regime prior to construction or the completion of any building or apartment, improvements, or structures on the property if all proceeds from its sale are deposited into an escrow account with an independent escrow agent until construction or completion of the proposed property as evidenced by issuance of a certificate of occupancy from the appropriate municipal or county authority. In lieu of any escrow required by this section, the escrow agent may accept a surety bond issued by a company licensed to do business in this State as surety in an amount equal to or in excess of the funds that would otherwise be placed in the escrow account with the South Carolina Real Estate Commission designated as beneficiary of any such surety bond.

HISTORY: 1962 Code Section 57-496; 1962 (52) 1866; 1967 (55) 449; 1970 (56) 2572; 1999 Act No. 86, Section 2.

SECTION 27-31-40. Apartments may be purchased, owned, and the like.

Once the property is submitted to the horizontal property regime, an apartment in the property may be individually conveyed and encumbered and may be the subject of ownership, possession or sale and of all types of juridic acts inter vivos or mortis causa, as if it were sole and entirely independent of the other apartments in the property of which it forms a part, and the corresponding individual titles and interests shall be recordable.

HISTORY: 1962 Code Section 57-497; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-50. More than one person may own apartment.

Any apartment may be held and owned by more than one person as tenants in common or in any other real estate tenancy relationship recognized under the laws of this State.

HISTORY: 1962 Code Section 57-498; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-60. Property rights of apartment owner.

(a) An apartment owner shall have the exclusive ownership of his apartment and shall have a common right to a share, with the other co-owners, in the common elements of the property, equivalent to the percentage representing the value of the individual apartment, with relation to the value of the whole property. This percentage shall be computed by taking as a basis the value of the individual apartment in relation to the value of the property as a whole.

The percentage shall be expressed at the time the horizontal property regime is constituted, shall have a permanent character, and shall not be altered without the acquiescence of the co-owners representing all the apartments of the property.

The basic value, which shall be fixed for the sole purpose of this chapter and irrespectively of the actual value, shall not prevent each co-owner from fixing a different circumstantial value to his apartment in all types of acts and contracts.

(b) The owner of any apartment embraced in the master deed and building plan shall have the right to require specific performance of any proposed common elements for recreational purposes set out in the master deed which are included in the next stage of the development that applies to recreational facilities in the event the additional stages of erection do not develop.

HISTORY: 1962 Code Section 57-499; 1962 (52) 1866; 1967 (55) 449; 1973 (58) 783.

SECTION 27-31-70. Common elements shall not be divided.

The common elements, both general and limited, shall remain undivided and shall not be the object of an action for partition or division of the co-ownership. Any covenant to the contrary shall be void.

HISTORY: 1962 Code Section 57-500; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-80. Use of common elements.

Each co-owner may use the elements held in common in accordance with the purpose for which they are intended, without hindering or encroaching upon the lawful rights of the other co-owners.

HISTORY: 1962 Code Section 57-501; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-90. Incorporation of co-owners.

Nothing herein contained shall prohibit any council of co-owners from incorporating pursuant to the laws of South Carolina for the purpose of the administration of the property constituted into a horizontal property regime. In the event of such incorporation, the percentage of stock ownership of each co-owner in the corporation shall be equal to the percentage of his right to share in the common elements as computed in accordance with the provisions of this chapter.

HISTORY: 1962 Code Section 57-502; 1967 (55) 449.

SECTION 27-31-100. Master deed or lease; contents.

The master deed or lease creating and establishing the horizontal property regime shall be executed by the owner or owners of the real property making up the regime and shall be recorded with the register of mesne conveyance or clerk of court of the county where such property is located. The master deed or lease shall express the following particulars:

(a) The description of the land whether leased or in fee simple, and the building or buildings in existence or to be constructed, if applicable, expressing their respective areas;

(b) The general description and number of each apartment, expressing its area, location and any other data necessary for its identification;

(c) The description of the general common elements of the property, and, in proper cases, of the limited common elements restricted to a given number of apartments, expressing which are those apartments;

(d) The value of the property and of each apartment, and, according to these basic values, the percentage appertaining to the co-owners in the expenses of, and rights in, the elements held in common; and

(e) The name by which the horizontal property regime is to be known followed by the words "HORIZONTAL PROPERTY REGIME."

(f) A description of the full legal rights and obligations, both currently existing and which may occur, of the apartment owner, the co-owners, and the person establishing the regime. The master deed of any horizontal property regime developed under the provisions of this chapter that contains any submerged land shall contain a notice of restriction stating that all activities on or over and all uses of the submerged land or other critical areas are subject to the jurisdiction of the South Carolina Department of Health and Environmental Control, including, but not limited to, the requirement that any activity or use must be authorized by the South Carolina Department of Health and Environmental Control. The notice shall further state that any owner is liable to the extent of his ownership for any damages to, any inappropriate or unpermitted uses of, and any duties or responsibilities concerning any submerged land, coastal waters, or any other critical area.

(g) In the event the owner of property submitting it for establishment of a horizontal property regime proposes to develop the property as a single regime but in two or more stages or proposes to annex additional property to the property described in the master deed, the master deed shall also contain a general description of the plan of development, including:

(1) The maximum number of units in each proposed stage of development;

(2) The dates by which the owner submitting such property to condominium ownership will elect whether or not he will proceed with each stage of development;

(3) A general description of the nature and proposed use of any additional common elements which the owner submitting property to condominium ownership proposes to annex to the property described in the master deed, if such common elements might substantially increase the proportionate amount of the common expenses payable by existing unit owners;

(4) A chart showing the percentage interest in the common elements of each original unit owner at each stage of development if the owner submitting property to condominium ownership elected to proceed with all stages of development.

(h) Any restrictions or limitations on the lease of a unit including, but not limited to, the amount and term of the lease.

HISTORY: 1962 Code Section 57-503; 1962 (52) 1866; 1967 (55) 449; 1970 (56) 2572; 1973 (58) 783; 1984 Act No. 463, Sections 2, 6; 1987 Act No. 143, Section 1; 1993 Act No. 181, Section 488; 1999 Act No. 86, Section 3.

SECTION 27-31-110. Plot plan and building plan.

There must be attached to the master deed or lease, at the time it is filed for record, a map or plat showing the horizontal and vertical location of any building which is proposed or in existence and other improvements within the property boundary, which shall have the seal and signature of a registered land surveyor licensed to practice in this State. There must also be attached a plot plan of the completed or proposed construction showing the location of the building which is proposed or in existence and other improvements, and a set of floor plans of the building which must show graphically the dimensions, area, and location of each apartment therein and the dimension, area, and location of common elements affording access to each apartment. Other common elements, both limited and general, must be shown graphically insofar as possible and must be described in detail in words and figures. The building plans must be certified to by an engineer or architect authorized and licensed to practice his profession in this State.

HISTORY: 1962 Code Section 57-504; 1962 (52) 1866; 1967 (55) 449; 1970 (56) 2572; 1984 Act No. 463, Section 3; 1999 Act No. 86, Section 4.

SECTION 27-31-120. Designation of apartments on plans; conveyance or lease of apartment.

Each apartment must be designated, on the plans referred to in Section 27-31-110, by letter or number or other appropriate designation and any conveyance, lease, or other instrument affecting title to the apartment, which describes the apartment by using the letter or number followed by the words "in Horizontal Property Regime," is deemed to contain a good and sufficient description for all purposes. Any conveyance or lease of an individual apartment is deemed to also convey or lease the undivided interest of the owner in the common elements, both general and limited, appertaining to the apartment without specifically or particularly referring to same.

HISTORY: 1962 Code Section 57-505; 1962 (52) 1866; 1967 (55) 449; 1973 (58) 783; 1984 Act No. 463, Section 4.

SECTION 27-31-130. Waiver of regime and merger of apartment records with principal property.

(A) All the co-owners or the sole owner of the property constituted into a horizontal property regime may waive the regime and regroup or merge the records of the individual apartments with the principal property, if the individual apartments are unencumbered, or if encumbered, if the creditors in whose behalf the encumbrances are recorded agree to accept as security the undivided portions of the property owned by the debtors.

(B) Notwithstanding subsection (A), in the case of nonprofit long-term care retirement or life care facilities where there are co-owners, a two-thirds vote of the co-owners suffices to waive the regime and regroup or merge the records of the individual apartments with the principal property if the individual apartments are unencumbered, or if encumbered, if the creditors in whose behalf the encumbrances are recorded agree to accept as security the undivided portions of the property owned by the debtors.

HISTORY: 1962 Code Section 57-506; 1962 (52) 1866; 1967 (55) 449; 1999 Act No. 25, Section 1.

SECTION 27-31-140. Merger as bar to subsequent horizontal property regime.

The merger provided for in Section 27-31-130 shall in no way bar the subsequent constitution of the property into another horizontal property regime whenever so desired and upon observance of the provisions of this chapter.

HISTORY: 1962 Code Section 57-507; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-150. Administration of property; bylaws.

The administration of the property constituted into horizontal property, whether incorporated or unincorporated, shall be governed by bylaws which shall be inserted in or appended to and recorded with the master deed or lease.

HISTORY: 1962 Code Section 57-508; 1962 (52) 1866; 1967 (55) 449; 1970 (56) 2572.

SECTION 27-31-160. Provisions required in bylaws; modification of system of administration.

The bylaws must necessarily provide for at least the following:

(a) Form of administration, indicating whether this shall be in charge of an administrator or of a board of administration, or otherwise, and specifying the powers, manner of removal and, where proper, the compensation thereof;

(b) Method of calling or summoning the co-owners to assemble; that a majority of at least fifty-one percent is required to adopt decisions; who is to preside over the meeting and who will keep the minutes book wherein the resolutions shall be recorded;

(c) Care, upkeep and surveillance of the property and its general or limited common elements and services;

(d) Manner of collecting from the co-owners for the payment of the common expenses;

(e) Designation and dismissal of the personnel necessary for the works and the general or limited common services of the property.

The sole owner of the property or, if there be more than one, the co-owners representing two thirds of the total value of the property, may at any time modify the system of administration, but each one of the particulars set forth in this section shall always be embodied in the bylaws. No such modification may be operative until it is embodied in a recorded instrument which shall be recorded in the same office and in the same manner as was the master deed or lease and original bylaws of the horizontal property regime involved.

HISTORY: 1962 Code Section 57-509; 1962 (52) 1866; 1967 (55) 449; 1970 (56) 2572.

SECTION 27-31-170. Compliance with bylaws, rules, and regulations; remedy for noncompliance.

Each co-owner shall comply strictly with the bylaws and with the administrative rules and regulations adopted pursuant thereto, as either of the same may be lawfully amended from time to time, and with the covenants, conditions and restrictions set forth in the master deed or lease or in the deed or lease to his apartment. Failure to comply with any of the same shall be grounds for a civil action to recover sums due for damages or injunctive relief, or both, maintainable by the administrator or the board of administration, or other form of administration specified in the bylaws, on behalf of the council of co-owners, or in a proper case, by an aggrieved co-owner.

HISTORY: 1962 Code Section 57-510; 1967 (55) 449; 1973 (58) 783.

SECTION 27-31-180. Records of receipts and expenditures.

The administrator or the board of administration, or other form of administration specified in the bylaws, shall keep a book with a detailed account, in chronological order, of the receipts and expenditures affecting the property and its administration, and specifying the maintenance and repair expenses of the common elements and any other expenses incurred. Both the book and the vouchers accrediting the entries made thereupon shall be available for examination by all the co-owners at convenient hours on working days that shall be set and announced for general knowledge.

HISTORY: 1962 Code Section 57-511; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-190. Expenses shall be shared.

The co-owners of the apartments are bound to contribute pro rata in the percentages computed according to Section 27-31-60 toward the expenses of administration and of maintenance and repair of the general common elements and, in the proper case, of the limited common elements of the property and toward any other expense lawfully agreed upon.

No co-owner may exempt himself from contributing toward such expenses by waiver of the use or enjoyment of the common elements or by abandonment of the apartment belonging to him.

HISTORY: 1962 Code Section 57-512; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-200. Unpaid assessments; payment upon sale.

Upon the sale or conveyance of an apartment, all unpaid assessments against a co-owner for his pro rata share in the expenses to which Section 27-31-190 refers shall first be paid out of the sales price or by the acquirer in preference over any other assessments or charges of whatever nature except the following:

(a) Assessments, liens and charges for taxes past due and unpaid on the apartment; and

(b) Payments due under mortgage instruments or encumbrances duly recorded.

HISTORY: 1962 Code Section 57-513; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-210. Lien for unpaid assessments; right of mortgagee or purchaser acquiring title at foreclosure sale.

(a) All sums assessed by the administrator, or the board of administration, or other form of administration specified in the bylaws, but unpaid, for the share of common expenses chargeable to any apartment shall constitute a lien on such apartment prior to all other liens except only (i) tax liens on the apartment in favor of any assessing unit, and (ii) mortgage and other liens, duly recorded, encumbering the apartment. Such lien may be foreclosed by suit by the administrator, or the board of administration, or other form of administration specified in the bylaws, acting on behalf of the council of co-owners, in like manner as a mortgage of real property. In any such foreclosure the apartment owner shall be required to pay a reasonable rental for the apartment after the commencement of the foreclosure action and the plaintiff in such foreclosure shall be entitled to the appointment of a receiver to collect such rents. The administrator, or the board of administration, or other form of administration specified in the bylaws, acting on behalf of the council of co-owners, shall have the power to bid in the apartment at foreclosure sale and to acquire and hold, lease, mortgage and convey the same. Suit to recover a money judgment for unpaid common expenses may be maintainable without instituting foreclosure proceedings.

(b) Where the mortgagee of any mortgage of record or other purchaser of an apartment obtains title at the foreclosure sale of such a mortgage, such acquirer of title, his successors and assigns, shall not be liable for the share of the common expenses or assessments by the co-owners chargeable to such apartment accruing after the date of recording such mortgage but prior to the acquisition of title to such apartment by such acquirer. Such unpaid share of common expenses or assessments shall be deemed to be common expenses collectible from all of the apartment owners, including such acquirer, his successors and assigns.

HISTORY: 1962 Code Section 57-514; 1967 (55) 449.

SECTION 27-31-220. Liability of purchaser of apartment.

The purchaser of an apartment (other than a purchaser at a foreclosure sale as described above in Section 27-31-210(b)) shall be jointly and severally liable with the seller for the amounts owing by the latter under Section 27-31-190 up to the time of the conveyance, without prejudice to the purchaser's right to recover from the other party the amounts paid by him as such joint debtor. The council of co-owners shall provide for the issuance and shall issue to any purchaser, upon his request, a statement of such amounts due by the seller and the purchaser's liability under this section shall be limited to the amount as set forth in the statement.

HISTORY: 1962 Code Section 57-515; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-230. Liens arising subsequent to recording of master deed or lease.

(a) No lien arising subsequent to recording the master deed or lease as provided in this chapter, and while the property remains subject to this chapter, shall be effective against the property. During such period liens or encumbrances shall arise or be created only against each apartment and the percentage of undivided interest in the common elements appurtenant to such apartment, in the same manner and under the same conditions in every respect as liens or encumbrances may arise or be created upon or against any other separate parcel of real property subject to individual ownership; provided, that no labor performed or materials furnished with the consent or at the request of a co-owner or his agent or his contractor or subcontractor, shall be the basis for the filing of a mechanic's or materialman's lien against the apartment or any other property of any other co-owner not expressly consenting to or requesting the same, except that such express consent shall be deemed to be given by the owner of any apartment in the case of emergency repairs thereto. Labor performed or materials furnished for the common elements, if duly authorized by the council of co-owners, the administrator or board of administration or other administration specified by the bylaws, in accordance with this chapter, the master deed, lease or bylaws, shall be deemed to be performed or furnished with the express consent of each co-owner and shall be the basis for the filing of a mechanic's or materialman's lien against each of the apartments and shall be subject to the provisions of subparagraph (b) hereunder.

(b) In the event a lien against two or more apartments becomes effective, the owners of the separate apartments may remove their apartment and the percentage of undivided interest in the common areas and facilities appurtenant to such apartment from the lien by payment of the fractional or proportional amounts attributable to each of the apartments affected. Such individual payment shall be computed by reference to the percentages appearing in the master deed or lease. Subsequent to any such payment, discharge or other satisfaction, the apartment and the percentage of undivided interest in the common elements appurtenant thereto shall thereafter be free and clear of the lien so paid, satisfied or discharged. Such partial payment, satisfaction or discharge shall not prevent the lienor from proceeding to enforce his rights against any apartment and the percentage of undivided interest in the common elements appurtenant thereto not so paid, satisfied or discharged.

HISTORY: 1962 Code Section 57-516; 1967 (55) 449; 1970 (56) 2572.

SECTION 27-31-240. Insurance.

The council of co-owners shall insure the property against risks, without prejudice to the right of each co-owner to insure his apartment on his own account and for his own benefit.

HISTORY: 1962 Code Section 57-517; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-250. Repair or reconstruction; vote of co-owners; application of insurance proceeds.

(A) A portion of the property for which insurance is required pursuant to Section 27-31-240 and which is damaged or destroyed must be repaired or replaced promptly by the council of co-owners unless:

(1) repair or replacement is illegal under a state statute or local health ordinance; or

(2) eighty percent of the co-owners, including the owner of an apartment which is not to be rebuilt, vote not to rebuild; except that the property bylaws may expressly require a percentage greater, but not less than, eighty percent of the co-owners.

(B) The cost of repair or replacement in excess of insurance proceeds and reserve must be considered a common expense.

(C) If the entire property is not repaired or replaced, the insurance proceeds:

(1) attributable to the damaged common elements must be used to restore the damaged area to a condition compatible with the remainder of the property;

(2) attributable to apartments and limited common elements that are not rebuilt must be distributed to the owners of those apartments and to the owners of those apartments to which limited common elements were allocated, or to the lienholders, as their interests may appear;

(3) remaining must be distributed to all of the co-owners or lienholders, as their interests may appear, in proportion to the percentage as described in Section 27-31-60.

(D) If the co-owners vote not to rebuild an apartment, that apartment's allocated interest must be reallocated automatically upon the vote and the council of co-owners promptly shall prepare, execute, and record an amendment to the master deed reflecting the reallocations.

HISTORY: 1962 Code Section 57-518; 1962 (52) 1866; 1967 (55) 449; 1984 Act No. 463, Section 5; 2006 Act No. 250, Section 1, eff March 24, 2006.

Editor's Note

2006 Act No. 250, Section 2, provides as follows:

"This act takes effect upon approval by the Governor and applies to all horizontal properties governed by the Horizontal Property Act, notwithstanding a provision in the master deed or bylaws to the contrary."

Effect of Amendment

The 2006 amendment rewrote this section.

SECTION 27-31-260. Sharing expenses in case of fire or other disaster.

Where the property is not insured or where the insurance indemnity is insufficient to cover the cost of reconstruction, the rebuilding costs shall be paid by all the co-owners directly affected by the damage, in proportion to the value of their respective apartments, or as may be provided in the bylaws; and if any one or more of those composing the minority shall refuse to make such payments, the majority may proceed with the reconstruction at the expense of all the co-owners benefited thereby, upon proper resolution setting forth the circumstances of the case and the cost of the works, with the intervention of the council of co-owners.

The provisions of this section may be changed by unanimous resolution of the parties concerned, adopted subsequent to the date on which the fire or other disaster occurred.

HISTORY: 1962 Code Section 57-519; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-270. Assessment and collection of taxes.

Taxes, assessments and other charges of this State, or of any political subdivision, or of any special improvement district, or of any other taxing or assessing authority shall be assessed against and collected on each individual apartment, each of which shall be carried on the tax books as a separate and distinct entity for that purpose, and not on the building or property as a whole. No forfeiture or sale of the building or property as a whole for delinquent taxes, assessments or charges shall ever divest or in anywise affect the title to an individual apartment so long as taxes, assessments and charges on the individual apartment are currently paid.

HISTORY: 1962 Code Section 57-520; 1962 (52) 1866; 1967 (55) 449.

SECTION 27-31-280. Council of co-owner's right of access.

The council of co-owners shall have the irrevocable right, to be exercised by the administrator or the board of administration, or other form of administration specified in the bylaws, to have access to each apartment from time to time during reasonable hours as may be necessary for the maintenance, repair or replacement of any of the common elements therein or accessible therefrom, or for making emergency repairs therein necessary to prevent damage to the common elements or to another apartment or apartments.

HISTORY: 1962 Code Section 57-521; 1967 (55) 449.

SECTION 27-31-290. Limitation on liability of co-owners for common expenses.

The liability of each co-owner for common expenses shall be limited to the amounts for which he is assessed from time to time in accordance with this chapter, the master deed or lease and the bylaws.

HISTORY: 1962 Code Section 57-522; 1967 (55) 449; 1970 (56) 2572.

SECTION 27-31-300. Effect on contracts entered into before June 6, 1967.

The provisions of this chapter shall in no way impair, alter or revise any contract entered into with regard to horizontal properties or condominiums prior to June 6, 1967.

HISTORY: 1962 Code Section 57-523; 1967 (55) 449.
GwenG (Florida)
Posts: 669
Posted:
Thanks for detail! Sounds like a condo.
GwenG (Florida)
Posts: 669
Posted:
Thanks for detail! Sounds like a condo.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
The SC Horizontal Property Act applies to multi story condo type buildings. It does not apply to HOA's that consist of single family, townhouses, multiplexes, etc. One way to look at it if there is no unit above nor below your unit, it does not apply.

Thus it does not apply to our HOA of single and duplex (side by side) homes.
ElaineP3 (South Carolina)
Posts: 47
Posted:
As a 70+ year old I don't need the aggravation. Life is too short so my last 70 years need to be fun.

The legal system has difficulty not thinking HOA when dealing with an HPR/POA and are quick to give advice for an HOA when an HPR/POA is the actual topic. It can be a little bit frustrating at $3000 plus $350 an hour when dealing with cash properties in the $200K to $400K range.

I will never buy a new property from a developer ever again. It is just not worth the costs involved to make sure you are not being ripped off. The amount you need to spend would by a new AC unit, roof, or almost any minor renovations in a preowned home and no court costs

The big developers are getting to big for it to be cost effective trying to protect yourself from their Games. ("400 million dollars for defects and legal issues as a normal cost of business?") Not for me.
ElaineP3 (South Carolina)
Posts: 47
Posted:
John is correct about an HPR but an HPR/POA:

POAs Are More About the Property

To start an HOA within a neighborhood, you need to actually have homes or condos (or other dwelling units). The homeowners become members of the association and work together to make the neighborhood better. On the other hand, POAs are more about the property. You can have a POA that is nothing but empty lots. In this instance, it’s the property owners who become members of the association. HOAs can be found in just about any neighborhood from urban to suburban, but POAs are often started around a landmark, such as a lake or golf course, in hopes that people will buy the land for its location.

https://associationvoice.wordpress.com/2016/01/21/hoa-vs-poa-whats-the-difference/

JanetB2 (Colorado)
Posts: 4,219
Posted:
FYI ... This thread is about Florida issues .... not South Carolina. The statute Elaine posted WILL NOT apply to the OP's situation or question as it does not pertain to Florida Law.
GwenG (Florida)
Posts: 669
Posted:
Good reminder. I hope that participants are careful in their reading of the posts made here. There should be no confusion in anyone's mind that issues of an actionable nature must be framed within not only governing documents but state law which governs their property.

The SC poster's concern was "buying Developer-controlled property" and the extra (unforseen) risks inherent in that and was tangentially related to the OP's concern. The Iowa OP's question concerned the transfer of Florida common properties by a Developer and, of course, SC law is not applicable.
ElaineP3 (South Carolina)
Posts: 47
Posted:
Thanks Gwen...I'm really not trying to give the wrong info.
(Everybody is always happy until their attorney reads them the fine print)
I own a property on the Gulf Coast of Florida and wouldn’t buy a property until the developer is long gone and I also would recommend renting in the neighborhood before buying.

Florida HOA law is just in favor of the written contract, governing documents, or written agreement.

(c) The completion by the developer of the common areas and such recreational facilities, whether or not the same are common areas, which the developer is obligated to complete or provide under the terms of the written contract, governing documents, or written agreement for purchase or lease of the parcel; or

(d) In the event there is not a written contract or agreement for sale or lease of the parcel, then the completion by the developer of the common areas and such recreational facilities, whether or not they are common areas, which the developer would be obligated to complete under any rule of law applicable to the developer’s obligation.

Under no circumstances may a cause of action created or recognized under this section survive for a period of more than 5 years after the closing of the transaction.

(2) In any action for relief under this section, the prevailing party may recover reasonable attorney’s fees. A developer may not expend association funds in the defense of any suit under this section.
History.—s. 28, ch. 2004-345; s. 24, ch. 2004-353; s. 136, ch. 2005-2.

DISCLOSURE SUMMARY?
FOR
(NAME OF COMMUNITY)

1. AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS’ ASSOCIATION.
2. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.
3. YOU WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER . YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .
4. YOU MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE.
5. YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS’ ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.
6. THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS’ ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .
7. THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS. (Forever?)
8. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.
9. THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

I would find an older home in an established 55+ completed community or buy a piece of property next to an older established 55+ community and just build. (Make sure it is not in a flood zone.)
JanetB2 (Colorado)
Posts: 4,219
Posted:
Elaine ... If you have an issue regarding property in your State you should start your own thread. You are potentially hijacking another individuals thread with their questions regarding the State Laws for the State they are questioning. Again ... If you have an issue you would like our community to address, please start your own thread.
ElaineP3 (South Carolina)
Posts: 47
Posted:
Thanks for the advice Janet,
My last post that you responded to is Florida Law and my opinion of buying a developer owned property. I will just start a new thread for the question. My Grandparents and one Parent are from Iowa. I would end any type of change in a community after it is mostly owned by people other than the developer without a vote by the entire association.

Having to pay an attorney to get your promised common area after the sale is an additional waste of time and money. All anyone wants to do is simply buy a property and get what they pay for, without having to go to court over a house transaction.

The bottom line is the same in every state when it comes to buying property, while I do believe the Florida Law is in favor of the developer so the attorneys, that choose to live there can make a living. All these documents are drafted by attorneys and keep attorneys working

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