Developer turning over subdivision to home owners

Started by PatriciaB22 • 8 replies • 356 views

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PatriciaB22 (Louisiana)
Posts: 2

Posted:

In Louisiana, is there a law which dictates when a developer must turn over the HOA to the homeowners. My subdivision has been completed for over a year, but developer will not relinquish control.

All lots are built and sold. He seems to want to keep control.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Be careful what you wish for... Plus it would be in your documents about the turn over. Your choice when the developer turns things over is to be self managed or hire a Property management. Which is not cheap. Don't think your going to save any money by being owner owned. You and your neighbors are now on the hook for EVERY expense. Even those you wanted the developer to "fix".

Best to get a group together now to review what you all want and need when it does transition. There will be the need to change your documents as part of the process. That alone will take time and several thousand dollars to just remove the developer references.

Former HOA President

MichaelS56 (Minnesota)
Posts: 859

Posted:

There is material available for a group of interested owners to use as a guide as to how to transition from developer controlled to owner-controlled HOA. CIC is one source. If you can find an HOA that just went through that process that would be helpful.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By MichaelS56 on 12/28/2023 4:45 AM
There is material available for a group of interested owners to use as a guide as to how to transition from developer controlled to owner-controlled HOA. CIC is one source. If you can find an HOA that just went through that process that would be helpful.

Here is some information on transitions:

Transition from the Community for Association Research

Developertransition.com This website is intended to specifically address the issues facing townhome, condominium, and homeowner associations in North Carolina. [still has good general information as well]

Checklist for Transition from Developer Control similar but few other things added also from a law firm

Developer/Homeowner Transition: A Guide To Success

Developer Transition in a Community Association

DouglasK1 (Florida)
Posts: 2,046

Posted:

As Melissa mentioned, usually your governing documents (CCRs, etc.) would specify when control passes to the members. Have you read those to see what they say?

Some states also have laws regarding this but I don't think we have any regular posters from Louisiana so you might want to try searching for state HOA laws and reading to see what you find. Maybe one of the other posters here who has more time on their hands than I do will do some research for you.

Escaped former treasurer and director of a self managed association.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By PatriciaB22 on 12/27/2023 9:00 PM
In Louisiana, is there a law which dictates when a developer must turn over the HOA to the homeowners. My subdivision has been completed for over a year, but developer will not relinquish control.

Please locate the document that you should have received when you bought your home titled "Declaration", or "Covenants, Conditions and Restrictions," or similar. Look for the sections that talk about turnover from the developer (a.k.a. "Declarant"). If you quote here exactly what these sections say, this forum might be able to offer more help.

It is entirely possible the Declarant is lawfully still in control. For example, from one online Louisiana HOA's Declaration:

Declarant shall have the right to appoint or remove any member or members of the Board of Directors or any officer or officers of the Association until such time as the first of the following events shall occur: (i) the expiration of ten (10) years after the date of the recording of this Declaration; or (ii) the surrender by Declarant of the authority to appoint and remove directors and officers of the Association by an express amendment to this Declaration executed and recorded by Declarant...

Be aware: Covenants are contractual terms. If the covenants say the developer was supposed to turn over control because of ___, then this is enforceable in court.

PatriciaB22 (Louisiana)
Posts: 2

Posted:

Thank you for the information. Most of the homeowners want the turnover. I am just concerned that it gets done correctly.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our turnover was based on amount of votes with the Declarant having 6 votes per lot and an owner having one vote per lot. With 112 lots it boiled down to turnover when 97 of the 112 were owner owned. There was also a date that the transition must take place on or before with the actual transition being 3 years before the date. The Declarant's lawyer also said the Declarant remained in control until the end of the calendar year which was not an issue. We had a good Declarant and the turnover went very smoothly.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Prior to turnover is a good time to review and have the Declarant change things. We had a good relationship with our Declarant. Our advisory BOD (appointed by the Declarant), and at my request, met and reviewed the Covenants and Bylaws. I admit, I instigated this as there were some Covenants/Bylaws I did not like and I knew the Declarant could change them. Not to go into depth, but main ones were cumulative voting was allowed, proxies were not allowed, and quorum was set at 50%. The Declarant willing changed them. Cumulative voting was removed, proxies are now allowed, and quorum is set at 20%. The Declarant willing changed them.

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