ISO enlightenment- In over our heads re: "Community Outparcel" sold by developer.

Started by TammyL2 • 16 replies • 268 views

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TammyL2 (New Mexico)
Posts: 26

Posted:

Good morning, it's been a while! I received a great deal of information and support from this forum during my past term on our BoD. I'm hoping you can help us again with our New Mexico subdivision. 144 lots, and 2 “Community Outparcels”, A & B.

I'm searching for answers to questions that came up during the Annual Meeting regarding the (rumored) sale of "Community Outparcel B". The Secretary advised she had not received any requests for Disclosure Documents (for outparcel &/or lot 126) for this sale. A follow up call to the County Assessor confirms there was a recent transfer of ownership. Biggest question: Should the Board care? Why?

See attached - plat map: Outparcel B & relationship to Lot 126. 2+ acres Outparcel B has a water well, electric and septic that served a former ‘Sales Office’. Septic was recently replaced.

County Assessor reports:
Outparcel B showed past transfer from Developer/Subdivider to an Arizona Real Estate Company also owned by the developer/subdivider. Outparcel B and Lot 126 sold on same day to same owners - transferred from developer's Real Estate Company to new buyer. Assessor cited/confirmed: 'no lot size shall be enlarged or reduced'. (An online search of records shows that Outparcel A has never been transferred.)

Developer Disclosure Statement #6. "Size of smallest parcel offered for sale, lease or conveyance within the subdivision": 5.01 acres.
These outparcels are not charged annual assessment. They are not addressed in our docs. Outparcels are only referenced on the Plat Map.

Questions:
Is Outparcel B part of the subdivision and subject to subdivision docs? Should the HOA care? Why? What damage to assn. is there, or could result?
What is the purpose of these outparcels? Would the purpose and intent of these 'outparcels' be stated anywhere in developer's initial application to subdivide?
Water lines crossed boundary lines from Outparcel B’s water well to Lot 126 a decade ago. Lot 126 does not have a well.

I appreciate any light you can shed!

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TerriS6 (California)
Posts: 3,284

Posted:

A community parcel sounds like a common area owned by the membership. Usually these can't be sold without a vote of the membership.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TammyL2 on 10/21/2023 8:39 AM
Questions:
Is Outparcel B part of the subdivision and subject to subdivision docs? Should the HOA care? Why? What damage to assn. is there, or could result?
What is the purpose of these outparcels? Would the purpose and intent of these 'outparcels' be stated anywhere in developer's initial application to subdivide?
Water lines crossed boundary lines from Outparcel B’s water well to Lot 126 a decade ago. Lot 126 does not have a well.

TammyL2, did you look up the definition of "outparcel"? I think this where one should start here. When I read some of the definitions on the net, it changed my thinking some.

I would be scouring the Declaration and plats for more information on this "outparcel." While the definitions of outparcel suggest it is a part of lot 26, the "community" qualifier (as in "community outparcel") only makes me ask more questions.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Have you run this past the association attorney? It may be premature if you're not sure that a sale is in the offing. But if the outparcel is smaller in size than the stated minimum for sale, that could be an issue, although apparently it changed hands at some point in the past.

Speculation here, but does "Size of smallest parcel offered for sale, lease or conveyance within the subdivision" apply to the time when the developer was in control? Is their any language stating that lots may not be subdivided? Or any other relevant provisions in your CC&Rs?

If your CC&Rs are not consistent with the community's history, it may make sense to amend them to conform with reality rather than fight over a sale. I also wonder about the legality of limiting an owner's ability to dispose of his parcel if it's "too small". I'd think that courts may view that as an unreasonable restraint on a property owner's rights. (I have this vision of Good Ol' Joe who owns a lot that he can't get rid of unless he dies and dumps the problem on his least favorite nephew...)

TimB4 (Tennessee)
Posts: 21,059

Posted:

One of the legal definitions of Outparcel is:

land within the boundaries of a parcel which is not owned or under the control of the parent tract owner or is intended to be excluded from the project by the parent tract owner.

The plat you provided looks like it was land set up for a future purpose (clubhouse, etc.).

The Association should care who owns the parcel as there may be restrictions on the land the Association has to enforce or assessments that need to be collected.

TammyL2 (New Mexico)
Posts: 26

Posted:

The membership has never had control of the outparcels. I'm not sure if some step was missed at turnover.
People who bought lots in the very beginning, were told that particular outparcel would be turned over to the community at some point, but I can't find anything in writing, and I can't find a 'legal' definition of 'outparcel' in NM statutes.

TammyL2 (New Mexico)
Posts: 26

Posted:

The only references to 'outparcel' that I have found online is a reference to a portion of a shopping mall's parking lot/area being leased (or purchased?) by a fast-food restaurant or similar. Any info you can provide would be appreciated.

I have the Plat Map on pdf, "Sheet 1 of 1" and I can't find a single reference to the outparcels.

TammyL2 (New Mexico)
Posts: 26

Posted:

shm .... the last time the association used an attorney (fighting developer abuse), it cost $2500 for a letter to be written and was ultimately used for a 'you were warned' message. Statute requires association records to be held in the state of NM, but they were in AZ. They were returned with police in tow ... accusing the Board of 'theft'!!
We got the records; the Sheriff got a good chuckle, but the lunacy remained.
Our annual budget is $6000.00! Money is spent on grading the roads twice a year. We need to figure this out on our own ... just like we did with those records.

CCR's: Section 8: "None of the lots in the subdivision shall be re-subdivided into smaller lots." Per assessor: "Lots may not be enlarged or reduced in size."

Developer Disclosure - Proposed range of prices for sales, leases or other conveyances: "Prices will range from &8995.00 (5 acres) to $39,995.00 (30.6 acres)."

Disclosure states "144 Parcels" - 144 (sold and unsold) pay annual assessments. The outparcels are not included in the 144 that pay annual assessments.

It's interesting that the developer moved the ONE outparcel to their real estate company prior to sale. The association was never advised of the transfer, so the new owners never received docs from us.

Good Ol' Joe may not have a single clue.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TammyL2 on 10/22/2023 1:35 PM
The only references to 'outparcel' that I have found online is a reference to a portion of a shopping mall's parking lot/area being leased (or purchased?) by a fast-food restaurant or similar. Any info you can provide would be appreciated.

Did you put the following verbatim into the google search window

"outparcel" "definition"

?

Or just click on this link:

https://www.google.com/search?q=%22outparcel%22+%22definition%22&rlz=1CAEXLB_enUS913&oq=%22outparcel%22+%22definition%22&aqs=chrome..69i57j0i22i30l2j0i15i22i30l5j0i390i650l2.6036j1j7&sourceid=chrome&ie=UTF-8

This question is intensely legal. I recommend the board hire an attorney.

TammyL2 (New Mexico)
Posts: 26

Posted:

If I'm understanding definitions correctly, the 'parent tract owner' can also be the 'Parent (corporation) tract owner', a.k.a. the developer. Please correct if I am misunderstanding.

I agree that the Association should care who owns the parcel. I'm conflicted on the application of restrictions and assessments.
The Outparcels have never paid an assessment. I wonder if something was missed during the turnover process.
The Plat shows 144 lots. Docs state 144 lots/parcels/members. Unsure how to justify an increase in the parcel count or accepting a 2-acre lot as a member.
I could use some suggestions to put before the board.

The outparcel well water line crosses a shared boundary to supply water to lot 126. Years ago, a letter was written to the developer (owns both properties) regarding the violation. To avoid this exact situation. I could suggest this is why the Secretary wasn't contacted by the developer when they sold these properties together.

A clubhouse was 'promised', according to those who purchased through the developer. A 'community well' too! But that isn't written down anywhere in our Documents. Buyer beware.

Thank you,
tammy

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

My impression is the outparcel is part of lot 126.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TammyL2 on 10/23/2023 7:33 AM
If I'm understanding definitions correctly, the 'parent tract owner' can also be the 'Parent (corporation) tract owner', a.k.a. the developer. Please correct if I am misunderstanding.

I agree that the Association should care who owns the parcel. I'm conflicted on the application of restrictions and assessments.
The Outparcels have never paid an assessment. I wonder if something was missed during the turnover process.
The Plat shows 144 lots. Docs state 144 lots/parcels/members. Unsure how to justify an increase in the parcel count or accepting a 2-acre lot as a member.
I could use some suggestions to put before the board.

The outparcel well water line crosses a shared boundary to supply water to lot 126. Years ago, a letter was written to the developer (owns both properties) regarding the violation. To avoid this exact situation. I could suggest this is why the Secretary wasn't contacted by the developer when they sold these properties together.

A clubhouse was 'promised', according to those who purchased through the developer. A 'community well' too! But that isn't written down anywhere in our Documents. Buyer beware.

Thank you,
tammy

Excuse me if this has been said already but Parcels that are owned in common by the membership wouldn't be charged an assessment. If the parcels are common areas, an assessment wouldn't have been paid for them.

TammyL2 (New Mexico)
Posts: 26

Posted:

These are the things that puzzle me!
The outparcels have never been owned by the membership. Those parcels have always been in the developer's possession.
Members never 'owned' outparcel, never paid the associated property taxes, never have been in the building, never been responsible for upkeep.
I am not sure what the developer's intent was for the outparcels when they were planning the subdivision. Surely it has to be written down somewhere.
Meanwhile, the new 'owners' arrived last night. And they are moving into the sales office building on the outparcel!

Q: When are outparcels generally turned over to the members?

I could sure use some ideas on how to get to the bottom of this. I can't imagine that the State of NM would leave this door wide open. Somewhere is a statement by the Developer stating their intent for 2 'outparcels' labeled 'Community'. Right?

I appreciate your response and welcome any light you can shed.

TammyL2 (New Mexico)
Posts: 26

Posted:

It should have been!!

I consider that Lot 126 & the outparcel have defined boundaries and are defined independently by name/number and by their acreage size.
Per statute 'parcels cannot be enlarged or reduced in size'.
Lot #126 has flipped at least one time in the past and the outparcel was not included in the sale (per County records).

Meanwhile .... the family has arrived and they're moving in. To the office building. On the Community Outparcel!

I'm beyond words. Your advice and guidance are needed and appreciated.

TerriS6 (California)
Posts: 3,284

Posted:

In California a home has to be issued a certificate of occupancy before it can be lived in. Maybe you have something similar?

JoeN6 (Virginia)
Posts: 94

Posted:

A clubhouse was 'promised', according to those who purchased through the developer. A 'community well' too! But that isn't written down anywhere in our Documents. Buyer beware.

Theres still another outparcel for a clubhouse , correct ? So there’s something . A community well( s) ? For 144 lots ? Where on the subdivision plat is this to be located . Did anyone ask ? That is considerable size a call to your local health dept most likely will classify that as a public h20 supply , it will need to be monitored ( cha ching$) , ,.

Re : the family has moved in . I would call zoning and inform them of the possible violation , perhaps a building permit application is in to change the structures use from office to one family ?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Tammy

It is common for a development sales office to be in a home that is later sold. Could this have been your case? Also, it seem the two lot were never part of the HOA.

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