Devolper Refuses Turnover

Started by EvanM1 • 5 replies • 630 views

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EvanM1 (Florida)
Posts: 2

Posted:

I live in a community located near The Villages in central Florida. Our community has been fully built out for more than 10 yrs. The original devolper never tuned over to the HOA while he owned it. In 2007 the community was sold to a business man who operates it as a money making cash cow. In 2013 he dissolved the HOA with the state and ammended our deed restrictions to say we would not be a HOA community as define by Florida statute 720 and we would not follow the statute as define by the state. How can we force a turn over of property owned by a corporation?

TimB4 (Tennessee)
Posts: 21,062

Posted:

This is an issue you need to discuss with an attorney. The attorney will need all the governing documents to give you a good answer. There may be a statute of limitations on challenging changes to the covenants.

EvanM1 (Florida)
Posts: 2

Posted:

I have submitted all governing docs to 4 different HOA attourneys. They all say what the developer is doing I'd illegal. But none will day for sure they can wanna case that could cost the residents hundreds of thousands in legal fees.

CathyA3 (Ohio)
Posts: 6,299

Posted:

This sounds suspiciously like stories I was hearing during the last housing downturn. Investors would gradually buy up condo units until they owned enough to control the association, at which point they filed the legal paperwork to dissolve the COA and turn it into a rental property. The remaining homeowners were given the option to sell their units to the new owners at a ridiculously low price, or to remain in the home and pay rent. Doesn't sound like it could possibly be legal, does it? But apparently it was. It differs from your situation in that the investors acted legally at each step. (In your situation it appears that only your original developer acted illegally - the current owner bought the property from someone *he believed* was the owner. I'm saying this a bit facetiously, because developers know a great deal about each other's business, and I'd need a lot of persuading to believe that the current owner didn't have any clue as to what he was buying).

I'm confused about how the new owner could possibly be using your community as a cash cow, though, unless he owns and rents a large number of homes or he leases out the amenities. It would be interesting to see the disclosure statements from recent sales in the community. A moot point, though...

Since this apparently involves illegal activity, your only solution is a legal one. Unfortunately, the lawyers you consulted are probably right that it will take mucho bucks to fight this, and you'll be up against someone who no doubt has the deep pockets to fight you until you're all bankrupt. As an aside, I also believe that folks who are "ethically challenged" in one area of their lives are probably the same in other areas; in other words, it's likely that you ain't up against a boy scout.

Much as I enjoy seeing the bad guys get theirs, in your position I'd sell, keep what I can of my money, and be thankful that I didn't lose more. Probably not what you want to hear, but this is not a fair fight.

AugustinD
Posts: 5,144

Posted:

EvanM1,

1.
You say you gave the governing documents to four attorneys, and each said that what the developer/majority owner is doing is illegal. Where I am, the cost of an attorney just to review governing documents runs more than $2000. Did you pay these attorneys for these opinions? If you did not pay these attorneys, did they really scour the governing documents?

2.
Did you yourself study the Declaration to see what it says about turnover of the HOA to the HOA members and transfer of title (before turnover to the HOA members) to another developer? Can you quote what your governing documents say? (People here will ask you to redact actual names of developers and the HOA. It's a rule of the forum.)

3.
"De-conversion" (meaning from a condominium to an apartment complex) is fairly common, especially when rental rates in an area have gone sky high. See for example: https://www.bisnow.com/chicago/news/multifamily/chicagos-condo-deconversion-trend-is-adding-scores-of-one-bedroom-apartments-to-neighborhoods-inventory-84413 . Are you sure that this is not what is going on here?

4.
Suppose the illegality is pretty certain, but the cost of correcting this would be hundreds of thousands of dollars (translating to years in court; a decade would not surprise me). How many HOA members are there to split the costs of the legal fees?

5.
Reality may very well dictate that it is cheaper to sell and move then go through this lawsuit. "Justice" through the courts is something portrayed in the movies. In reality,the courts are frequently not a viable path to correct wrongs.

I am sorry this is happening to you. I am aware many professionals advise avoiding HOAs still under Declarant-developer control.

GenoS (Florida)
Posts: 4,276

Posted:

The Villages. According to one online source I saw last week, sinkholes in the Villages were the Top Story in 2018. Lots of finger pointing. No real fixes and no agreement on who should pay. A nightmare for some homeowners.

Surely there are some other villages that have faced similar problems? There are many, many, many villages, each with its own HOA and, from what I understand, the same developer built nearly all of them. 120,000 people living in 50,000 homes contained in a large number of 55+ communities. Someone up there must have some experience with this type of sleazery.

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