When a Turnover is going to happen

Dottie:

Why is an attorney needed for the turnover? When the Developer is 75% sold an election should take place to elect 3, 5 or 7 board members according to your Bylaws.

The Developer should have or the MC collecting dues from all Owners, working off of a budget and there should be an operating account already established in the name of the HOA.

I find it is very useful for an attorney to sit down with the newly elected board and review their responsibilities, liabilities and legal requirements. All too often the first board has to learn by screwing up. A couple hours of an attorney's time up front can save a bundle down the road and help set the right kind of precedents.

Joe

Joe - Unless an attorney has read the governing documents of the association and is fully aware of any discrepancy contained therein with local, state, or federal law, IMHO sitting down is money misspent. It does not take an attorney for the BOD to review the responsibilities, liabilities and legal requirements. All it takes is someone who can read and not interpret to their or their client's advantage. Something attorneys have a penchant for. Not a fan of using attorneys when common sense and a little candlelight reading can accomplish the same task.

Dottie, since you are in MA read this article from one of the better law firms in MA:

Smooth Transition from the Developer to Owners Puts New Communities on the Path toward Successful Self-governance
http://www.meeb.com/current_alert.htm

Hiring an attorney comes out of the common fund and yes, the developer, if he still owns units, has to pay just like everyone else.

How do you raise the money? The board establishes an annual budget and assesses the owners as indicated in the documents. Part of that budget should be for a reserve fund to cover future repairs (use the search above to look up reserves). For more item that should be considered in the budget, read some of the articles under Finance at the Community Associations Network to the left.

Joe, given the questions asked and the issues raised, wouldn't you suggest it's time they found a good lawyer? I know you don't like them, but sometimes they are needed.

Joe

Joe thank you so much for the article and believe it or not that is what we did , we met with the developer and had a punch list, which took 1 year and he still has not met his obligations that he listed he would do.

Also the budget was a big mess, things he said, he would do, he charged us for, expenses he does not know what they are and thinks they are his home electic bills ect...

The reserve which was started and he is taking out money for each month, started with a balance and now it is gone, his explanation for that is he used it...and did not have a separate account.

The roofs had leaks, He says, he is not putting on roofs, they are as is. It is a conversion, I do not know if that makes a difference.

So here we are, and I se co-mingling of funds and our reserve is gone, He has accessed us thousands for a Septic which let go, but come to find out the septic man who did the repair says they were never glued, thus our trip to the town after posting on this board, finding out there was a violation in 2000 and never reconciled with the town, we have another meeting next week.
Maybe they will say, it is fixed and it has passed inspections.

We would like to negotiate for new roofs on 4 buildings, We need the fence done, we need the gates to the pool fixed so they lock properly, a punch list and a budget that will reflect the Reserve that was suppose to be in there. Also an accountant to fix the books and make them right.

Our hope is to get this place in our hands so we can run it ourselves, He hires people in here that are Jack of all trades , master of none.

Paul Thanks and I will check that information out also.

I just do not know where to turn. Also I want it done right and have a smooth turnover, if he would co-operate.

There is more, but I feel I am dumping a lot on all of you . It seems that everything that is happening here we are going through at some level.

I do appreciate your help, ideas and support.

Dottie,

I would not use an attorney for most turnovers, but you have extenuating circumstances. You will need the funds in your reserves for turnover. The HOA or Condo will have to replace these monies at some point with either an assessment or an increase in dues. If the developer used these funds he should replace them before turnover and the HOA should not forgive them not being there.

Being a conversion there are a lot of special needs that have to be taken care of. Is your board aware of everything? and if your takeover does not protect the HOA for the future (bonds etc) you may run into situations that may cost the homeowners if you have no repercussions against the developer. Make sure your board covers the HOA tush.

DottieS:

It sounds like your community and developer may not be ready for turnover, and you don't want it to happen with the developer until he comes through with his responsibilities to you. Maybe you could check out some other communities he has developed to learn of their status.

You may, at this point, want to befriend someone in your local municipality who had to sign off and approve all that the developer 'agreed' to complete.
The municipality can be your ally here with your 'punch list' and all must be done according to their codes and standards. He had to post a bond with them which showed his good intention to complete all he said he would do and it has to be done correctly to secure their approval.

Its fine to want to get your community 'in your hands to run it yourselves' but not so good if the units/projects are not finished correctly and according to standards, whether its for roofs, walls, heat/air cond., etc. or the municipal projects of storm water drainage, common areas w/proper grading, curbs, streets, amenity areas: clubhouse/tennis court, pool, etc. Yes, you want it done right.

Get others in your community on the bandwagon to coordinate with your local officials--land development/code enforcer. Create a Task Force to speak with them, show them your punch list. They have a punch list as well of things which must be done or 'redone', but it would be good to compare. It will be well for you to know that they are in your corner to have all projects done properly. Good Luck!