Developer handing HOA over - neighborhood losing it

Started by ErinP • 7 replies • 323 views

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ErinP (Tennessee)
Posts: 2

Posted:

I am honestly just reaching out for advice.
We moved into our subdivision 2 years ago and we were told that when phase 1 was completed the HOA would be handed over to Class A (us). Well it took them 16 years to finish the last house and had notified us that within 30 days they would be handing the HOA over. During this time no dues have been collected and the developer covered all of the associated costs of maintenance ... etc. We only have an entrance and 2 common areas with zero amenities (24 acres).
Our neighborhood has hosted 2 meetings now and are dead set against an HOA. We have consulted 4 different lawyers, all tell us it's in our best interest to get a board together and register with the Secretary of State. We are down to 6 days and we are still at square one where the most vocal are fighting it every step of the way. Secret FB groups, lawyer consultations from lawyers not even in our county.
We consulted a management company and hosted an informative meeting - 6 people showed.
We had a lawyer offer us a free consultation and hosted a meeting where people didn't like the answer and walked out (about 80 people).

If the city gets involved, will they form one for us and decide the dues ?
Is it possible in a county where all developers are required to have an HOA established now that somehow ours wouldn't due to the time-frame ?
What happens if we don't file with the state in time, does the land then become taxable since we aren't a non-profit ?
What happens to all of us that were told when we bought our house the HOA would be formed and now the residents want to just "do nothing" and think the HOA issue will go away ?
Can the developer sue us since they are selling phase 5 with the HOA disclosure ?
Can 5 of us go pay the $100 and file with the state ?

Sorry for all the questions. We have a small group that want the HOA and were told that even with just 5 people that we can't go down and file with the state without a quorum.I do want to note that even during the meetings, the ones against the HOA have threatened physical violence against those that do and have not been shy about the bullying and intimidation.

SheliaH (Indiana)
Posts: 6,964

Posted:

Assuming this developer told everyone from the beginning that this is a HOA, people can't suddenly turn around and ignore that. (This is what happens when people don't read or ask questions before signing on the dotted line).

You didn't say what the common areas are - is this a grassy area, clubhouse, what? The responsibility for that won't go away if the homeowners simply say they don't wanna join an HOA, so someone will have to figure out what happens to that area if it's not established. Granted, I don't see any disaster caused by an entrance, but the rest of the common area may cause problems if someone gets injured. Without an HOA, ALL OF YOU would be personally liable for a lawsuit, and that can get really expensive. It would also come out of your personal pockets instead of an HOA that uses assessments for those.

And then there are the CCRs - those don't go away either. CCRs can be enforced by one homeowner against another, so one could argue you don't need an HOA for that. That would also mean you'd have to spend your own dime in going after someone who uses his/her front yard as a landfill or paints the house hot pink. ''

You have good questions, but you're really going to need an HOA attorney to sort this out. And perhaps the city or county, which usually require that developers create HOAs, so perhaps someone should ask them what happens if the homeowners say no. In the meantime, start with your small group, pass the hat for an attorney (the bar association may be able to refer you to one who specializes in HOA law).

PS - I don't think the developer can suddenly cut bait after 16 years and do nothing more than say goodbye and gppd luck. This is where you really need an attorney to send a strongly worded letter to ensure they've met their obligations before the 30 days is up - someone or several of you will need to come up with a punch list to ensure streets, sidewalks and whatnot have been installed. For this, I'd definitely get the city or county involved - if these folks are running out of money to finish up, it's important to see if there's some sort of performance bond available to pay for the work. Good luck to you.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ErinP (Tennessee)
Posts: 2

Posted:

Thank you !
The common areas are 2 entrances (not well kept), a dead end street that was supposed to be used but ended up being over a sink-hole and was never finished. Right now the residents are using it as their own personal storage lot for RV's, food trucks and a school bus.The city says it doesn't fall under city ordinances but under the HOA, which kinda doesn't exist except the developer. The last is along farmland with a lot of acreage but then who ends up owning that land and paying the taxes if we don't establish a non-profit?
Sadly, we have consulted 3 different attorneys. They have done everything they can to inform the residents but they have literally shouted 2 of them right out of the room and they picked up and left. The group that is against it hired a lawyer and 14 others pitched in for a consultation and were told we didn't need one and we could just walk away from all of it (which we know isn't the truth!). We spoke to one this morning who said if we don't do something that the city will end up doing it for us. In the end my husband and I, along with other families, want this HOA and to be protected. The louder ones who want to do whatever they want have literally rolled right over the rest of us. I even offered to be on the board, but we are running short on time to form one.

So, just one question and I will have to let it go ... if 5 of us want it, can we pay the $100 and go down to file the paperwork or do we have to get a quorum ?

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By ErinP on 04/24/2023 1:33 PM
Thank you !
The common areas are 2 entrances (not well kept), a dead end street that was supposed to be used but ended up being over a sink-hole and was never finished. Right now the residents are using it as their own personal storage lot for RV's, food trucks and a school bus.The city says it doesn't fall under city ordinances but under the HOA, which kinda doesn't exist except the developer. The last is along farmland with a lot of acreage but then who ends up owning that land and paying the taxes if we don't establish a non-profit?
Sadly, we have consulted 3 different attorneys. They have done everything they can to inform the residents but they have literally shouted 2 of them right out of the room and they picked up and left. The group that is against it hired a lawyer and 14 others pitched in for a consultation and were told we didn't need one and we could just walk away from all of it (which we know isn't the truth!). We spoke to one this morning who said if we don't do something that the city will end up doing it for us. In the end my husband and I, along with other families, want this HOA and to be protected. The louder ones who want to do whatever they want have literally rolled right over the rest of us. I even offered to be on the board, but we are running short on time to form one.

So, just one question and I will have to let it go ... if 5 of us want it, can we pay the $100 and go down to file the paperwork or do we have to get a quorum ?

what do the bylaws state for how the intial directors are appointed by the builder OR they are voted at during the first meeting? if they are voted on then you will deffinetely need quorum.

vis ta vie

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It should be noted your city will not be involved in your HOA. A HOA is a Homeowner's Association. It is made up of the owners. It's like a "club of owners". You are funded by the members for the members. This will now be your puppet show once the Developer walks away. The rules are your bond. Learn them.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Erin

Are there any Covenants and/or Bylaws recorded with the property. If yes, there is probably an HOA like it or not. If none filed there probably is not an HOA. If this is the case consider forming a dues paying group to maintain the common property only. This group would have control over nothing else.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JohnC46 on 04/25/2023 9:31 AM
Erin

Are there any Covenants and/or Bylaws recorded with the property. If yes, there is probably an HOA like it or not. If none filed there probably is not an HOA. If this is the case consider forming a dues paying group to maintain the common property only. This group would have control over nothing else.

ADD ON

There is a name for such a group but it eludes me right now.

MarkM19 (Texas)
Posts: 1,459

Posted:

Erin,
Some questions that may help us all understand.

1) How many homes or lots are we talking about?

2) Are you saying that the developer has been paying for all upkeep for 16 or 18 years?

3) Has the developer had a building or trailer onsite the entire time?

4) Does the developer have a local business or office that you could walk into and speak to someone?

We have a lot of helpful people on this site and I for one have been on this blog for around 15 years. This is the first time I can recall ever seeing anyone in your situation.

We need more details if we have any chance of helping you with this. None of us are lawyers and our advice is worth the price you are paying for it at times.

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