Developer's Capital Contribution

Magda,

I agree this practice is unethical. Many assn's here in AZ require this; there is no state law here forbidding it -- don't know about FL. I would suggest thoroughly researching your gov. docs. to see if the requirement is for all purchasers -- not just those who originally bought from the developer. I know of many assn's who do this and it's not in the CCRs -- it's just a board adopted rule! These monies are deposited into the assn's reserve fund and used for long-term maint.

Mary
AZ

MagdaS - My Public Offering Statement (POS) states a non-refundable working capital contribution to the Association upon the purchase of a home from the Developer, which fee may be used for working capital; including but not limited to cash flow deficits of the Association or any other lawful purpose. Governing documents go on to state the Association assumes all the rights the Developer had so after homes are closed the Association can continue the practice of a one-time fee after every home is closed. This fee is for the benefit of the Association, only fair because everyone that originally purchased had to pay it and it was used to fund and basically build the community that the new owners are to enjoy. I fail to see how this is unethical, especially if your governing documents permit it and there's no state law that prohibits it.

SusanW1 - Yes, curious as well about what seems to, and can at this point, be characterized as a splinter group from the Association BOD. Especially one initiated 4 years after the start of the Development, and as they consider themselves the "true representatives of the residents" and so far have been able to "get certain things taken care of". Without trying to sound too skeptical, curious if the beverage of choice is Kool Aid? Don't get me wrong, all for the voice and necessity of the majority. However, seems to me that the members of this "Board" would be better served to run for office of the incorporated and truly established Association BOD. That is as the Developer seats open (transitioned) as the community is constructed.

MagdaS - Sure there are countless drama filled stories here, how the "Man", or Developer in this case, done, or is doing y'all wrong. But traditionally, as most of us here can probably attest, an Association has a Board that initially consists of Developer representatives until the owners are elected by the owners. The Developer often will low-ball the budgets, construct things in accordance with a set of pre-approved plans in conjunction with the local municipality, hopefully to the letter. Those interested in volunteering to assist their neighbors try to work with, not against the Board members, and Developer. The tricky part is how to accomplish progress before and after the Developer that is in the best interests of the owners investments without causing faction, rumor, and hostility.

I'm just curious why the developer was involved in a home resale thru a private Realtor at all? "Annual Dues" likely would have been paid up front and pro-rated at closing; seems the developer cut himself an extra slice of pie at closing.

Magda,
Those capital contributions are something that Developers had started to charge each home sale to recap some of their impact fees that the State and County have billed them for. It also may cover some of the infrastructure costs as well. Building in Florida is somewhat different that many other States. The environmental impact is very costly to Developers. Remember shutting down a new community for 6 months while they removed some endangered turtles? You know all of those extra premium lots on the lakes? (Drainage systems that are then governed by the County environmenal Departments) He has to care for Preserve areas which are County monitored. So what I am saying is that there is so much more than the general public is aware of.

It sounds like you have NOT had turnover from the Developer by the description of your Board being made up of Developer appointed members, etc. If you have not had a formal turnover, then these are things that you have to deal with until he so choses to relinquish control. Some of these guys are easy to work with and others are just plain boogers.