A little legalese interpretation, please...

David

Since the word "complete" is used, my interpretation is conveyance means after closing of the transaction which conveys title to the property, including the home, to the buyer.

The conveyance from the Declarant to the Builder does not involve a "complete" home, only an empty lot.

I believe I worded that poorly. When I put "complete" in quotes I was discussing the common parlance used amongst residents; which I recognize is not the true wording in the Declaration. It's our layman's description, as in "They tell me when the community is 75% complete we get control of the board."

The wording I put beneath it (which does not use the word "complete") is the actual verbiage from the Declarations, but I'm not sure what it actually means. Is a home "conveyed" when the builder acquires the Lot from the developer, when the home buyer closes, or at some point in between?

David, who did you buy your home from, the builder or the declarant? What does your paperwork say? Or perhaps the question should be: who are current buyers buying from?

If people are getting a deed from the declarant, then the builder is (probably) not a lot owner and the final conveyance is when the final owner closes. If people are buying (getting a deed) from the builder, then the final conveyance is earlier when the builder bought the lots from the declarant.

This may not be the total answer, but it could a be a good indication.

I would also check with the county recorder of deeds to see who is the recorded owner of the lots.

Not a big deal why I haven't asked the Declarant. He's the kind of guy who will "answer" a simple question with a long, convoluted reply that doesn't actually answer the question. We only talk - group conference call with the property manager - once or twice a month and there are so many more pressing issues I've let it slide.

Plus, when I do get a direct answer it's often wrong; not because he is lying, but because he honestly doesn't know what all is written in our Declarations. He basically has the same laymen's understanding as everyone else. I thought (hoped) perhaps this verbiage was cut-and-dry. I appreciate all of your insight.

In our case they are absolutely two different companies. One is a "paper" LLC created by a local construction company, and exists only for the purpose of this development. No doubt to protect the primary company from liability issues. The builder is a national company whose name anybody would instantly recognize. They are absolutely not connected in any way.

Hence my question, does "conveyance" occur when the Developer transfers ownership of a lot to the Builder, since that would seem to match the description in the Declarations as "someone other than the Declarant." Or for purposes of "Declarant Control Termination" does it only mean final conveyance to the home buyer (ie: closing date of the actual house to the purchaser.)

In my first post I whittled it down to the one key phrase that I'm hoping to interpret. I want to know when we take over because, well, it seems like a pretty basic piece of information we ought to know. If nothing else, I understand the turnover process is pretty complex and I'm hoping to convince the Developer to hire a more competent Property Manager who can guide us through that process, and I need to know what our lead time is. It could as early as this Fall. It could be a year later - depending upon what that phrase means. The entire paragraph is as follows:

The affairs of the Planned Community shall be governed by a Board of Directors known
as the Executive Board. Persons eligible to serve as members of the Executive Board are natural
persons who are designees of the Declarant, or Lot Owners. The Executive Board shall initially
consist of the three (3) persons named in the Declaration. The Declarant shall have the right, in
Declarant’s sole discretion, to replace all initial Executive Board members, and to select and
designate their successors and thereafter remove Executive Board members and designate their
successors from time to time, until not later than sixty (60) days after the conveyance of twenty
five percent (25%) of the Lots that may be created in the Planned Community to Lot Owners
other than Declarant(the “First Benchmark”). During the period from the First Benchmark until
no later than the earlier of (1) sixty (60) days after the conveyance of seventy five percent (75%)
of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,
(ii) two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of
the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of
business, (ili) two (2) years after any right to add new Lots for residential purposes was last
exercised, or (iv) the day the Declarant, after giving written notice to Lot Owners, records an
instrument voluntarily surrendering all rights to control activities in the Corporation (the
“Declarant Control Termination Date’), one (1) member of the Executive Board is to be elected
by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2)
members are to continue to be selected and designated by Declarant. Not later than Declarant
Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members,
who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant
shall have no power to designate any Executive Board member after the Declarant Control
Termination Date.

I'm actually quite positive that is incorrect. Reason being the "First Benchmark" was when 25% of the homes were conveyed, and that is when we were allowed to have one Board member, which is me. That continues from the 25% point until the 75% point.

It is as follows:

* From start until 25% of lots conveyed - Declarant has all three Board Members
* From 25% to 75% of lots conveyed - Declarant has two Board Members and Residents have one
* After 75% of lots conveyed (or if Declarant stops selling homes for two years) - Residents elect five members to the Board

My question is, what is "conveyed" in each case?

Hmmm... I read it again and I would agree that I did misread that section. From 25% to 75% you have one elected board member.

But that mistake aside, I don't see anything in that paragraph that says full transition happens after 75%, just after the Declarant Termination Date - which is not defined by the percentage of conveyed lots, but when "the day the Declarant, after giving written notice to Lot Owners, records aninstrument voluntarily surrendering all rights to control activities in the Corporation"

Still, none of us are lawyers and an attorney with HOA knowledge would certainly be better positioned to interpret this language than anyone here.

The legal definition of "conveyed" is transfer the title to property.

One thing that could arise is a definition of when does a declarant surrender his right to a lot? Is it when the lot is sold? Is it when a home is built on the lot? Is it when the built home is sold?

In one association I belonged to, the declarant retained some lots and we asked our lawyer, is should the owner (the original declarant) of those lots be paying dues? The layer replied a case could be made for that but the legal costs might, in the end be higher then the dues were. We dropped the idea.

Here's the paragraph DavidG45 quoted from his HOA's Bylaws/Declaration, with me adding one word ("either") and spacing where the commas occur, for readability:

=== Start Excerpt ==
During the period from the First Benchmark until no later than the earlier of [either]

(i)
sixty (60) days after the conveyance of seventy five percent (75%) of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,

(ii)
two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of business,

(iii)
two (2) years after any right to add new Lots for residential purposes was last exercised,

or

(iv)
the day the Declarant, after giving written notice to Lot Owners, records an instrument voluntarily surrendering all rights to control activities in the Corporation (the “Declarant Control Termination Date’),

one (1) member of the Executive Board is to be elected by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2) members are to continue to be selected and designated by Declarant.

Not later than Declarant Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members, who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant shall have no power to designate any Executive Board member after the Declarant Control Termination Date.

=== End Excerpt ===

Only in (iv) does transfer happen only when the Declarant says it does. But the phrase "no later than the earlier of" means that, if either (i), (ii) or (iii) happens before (iv), then transfer is supposed to happen.

Else respectfully, I am not sure what about "convey" DavidG45 does not understand.

Thank you for explaining (a second or third time or more). Pardon my not reading all your posts carefully.

From my reading of the case law, if the language is not ambiguous, then the courts are going to give the language its "plain meaning." The phrase 'conveyance of... the lots" means "conveyance of... the lots." Not conveyance of the houses built on the lot. To me, "conveyance of the houses" usually means conveyance of the lot and the house built on it. Conveyance of the houses (with the lots on which they sit) is something different from a mere conveyance of the lot (or land).

Are you resisting contacting the county clerk to see if the lots have been transferred to the builder? I think doing so is important for resolving the concerns you have.

From the Delaware Uniform Common Interest Ownership Act, throw this into the mix:

-- Start Excerpt from Delaware UCIO statute ===
81-303
(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.

(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 331/3 percent of the members of the executive board must be elected by unit owners other than the declarant.
=== End Excerpt ===
See http://delcode.delaware.gov/title25/c081/sc03/index.html

Note the sentence in the statute that starts with, "Regardless of the period provided in the declaration, ... " Notice that this section of the statute almost duplicates what is in DavidG45's Bylaws/Declaration, except for one thing: Instead of using the word "lots," the statute uses the word "units." A "unit" is defined here
http://delcode.delaware.gov/title25/c081/sc01/index.html as follows:

=== Start Delaware HOA statute definition of "Unit" ===
“Unit” means a physical portion of or 3-dimensional space in the common interest community designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 81-205(a)(5) of this title, and shall include all improvements contained within the space except those excluded in the declaration. A unit may include 2 or more noncontiguous spaces. If a unit in a cooperative is owned by a unit owner or is sold, conveyed, voluntarily or involuntarily encumbered, or otherwise transferred by a unit owner, the interest in that unit which is owned, sold, conveyed, encumbered, or otherwise transferred is the right to possession of that unit under a proprietary lease, coupled with the allocated interests of that unit, and the association’s interest in that unit is not thereby affected.
=== End Definition of "Unit" ===

The statute does seem to apply to both condos and subdivisions with stand-alone houses.

I still tend to think that conveyance of the lot to the builder is conveyance of the unit to someone other than the Declarant.

I was just looking at my community's property records, and every time a home changed owners, the transaction received a Conveyance Number (the 4-dgit-year with what looks like an incrementing number appended to it).

Lots can be "conveyed" to the builder, and that's usually the first recorded transaction for every lot. The builder is then a member of the association and will normally pay a reduced assessment for the undeveloped lot. The builder puts up a building and then "conveys" the whole shebang to a buyer/new owner, who then becomes a member of the association. This is normally the second recorded transaction for that lot. In my experience, the builder usually buys a few lots at a time from the Declarant, builds and sells to homebuyers, and then moves on to the next group of lots.

I recommend looking at your county recorder's website to see if the property records are online and searchable. You can look at the sales history associated with every lot/street address and see this stuff play out. Maybe that would make it clearer.

Argh, you're correct, I mentioned the wrong county department. Property records (with tax and other info) are on the treasurer's web site.

I am debating to post or not as I hate anyone, myself included, that tries to play lawyer. That said, I do not see a defined time/point where the Declarant has to turn over the association to the owners.
Time for David to get legal opinion form a real lawyer, not a play lawyer.