HOA and DEVELOPER RELATIONSHIP

I live in a 55+ community consisting of 115 single homes. The HOA has not been conveyed a clubhouse which has been under construction for 3 years. The developer has taken too much time on the project, but the completion should be around June, 2008. While we were waiting for the completion and eventual conveyance the developer now wants the HOA Board to agree to a lease for one year. It is a detailed lease agreement but the short of it is
that it would be managed and maintenanced by the HOA as if conveyed. The other main point is the developer wants 50% of the proceeds of any rentals
of the clubhouse, if the decision is made to rent the facility by the Association. Is there any rule, law, restriction, etc. that would
address the illegality of such a lease? This is in the State of louisiana.

Glen is right,
Just make double sure whatever you do doesn't have some clause you don't understand. You can bet the developer is always looking for leverage on someone, and I would be suspecious of this kind of a deal. It could be that he wants control over who rents the place for a year but who knows.

Also, you have the option of doing nothing, be sure to get the lawyers opinion on that.

Another thing you can try is to tell the developer you can't make any decision without full support of all owners, and you don't think you can ask them to foot a lawyers bill. Ask the developer to pay your lawyers fees to see that your interests are protected. Be careful.

"Notwithstanding any provision in the declaration, bylaws or other community documents to the contrary" is contained in a number of AZ state statutes. It means that it doesn't matter what your docs say what is written in this statute applies.

Donna,

Aren't all the confusing laws written by lawyers? :-)

I wish we could do this in the State of Washington "Small Claims Court Law-Suit for Violation of Florida Statutes" go to the link: http://www.ccfj.net/courtdecdocsFL.html

Wardell
http://www.cp2hoa-info.com/

Aren't all laws written by Lawyers? Weren't the first lawyers "money changers"? I wish I was a lawyer, I would straigthen this whole mess out.

We already have an existing and conveyed clubhouse facility. The one in question is a newly built clubhouse next to the existing facility.
The developer has not conveyed the new clubhouse to the HOA. The plan
according to the developer is to "convey the facilty in the future".
The developer is having so called financial problems and is the reasoning on his part to offer a lease agreement to the Association for one year. All responsibilities are on the HOA as if the facility was conveyed. There is no document or statement stating when, how, where, etc. this new clubhouse will be conveyed. Presently, the HOA
is negotiating with the developer because they desperately want to utilize the new clubhouse.
One of my questions is taking into consideration this is a 55+ community and falls under federal and state laws, is it legal to
rent a facility when that facility is part of the 55+ community for
the use of its members?

Hi Daniel,

This all sounds fishy to me. I think the devloper may not want to turn over ownership of the clubhouse to your HOA for some reason, perhaps he plans to use it as collateral to secure a loan due to his financial problems. If your HOA leases the clubhouse from him, then he obviously is the owner of the cluhbouse and you're his tenant.

Any idea how much revenue the clubhouse might generate in it's first year? Would it be rented out 15 times or 150 times, would the fee be $ 50 or $ 250? Most clubhouse rentals don't generate a lot of income for an HOA, so the developer wanting 50% of the first year's rental income probably isn't some financial windfall for him.

Something else is going on behind the scenes here, and you should keep investigating.

I side with Patrick, if we know the whole story from what has been posted, it will be a miracle. Paul and others have offer some sound well though out evaluations, but the picture seems to change all the time. I do know one thing for sure, this latest request to have someone declare if this or that is legal because of Federal involvement with an HOA entity is not going to get answered. This question has to be directed to authorities that you suspect have some control over your HOA, and not an answer in general. You seem to have a complicated situation that is being presented from a personal point of view. I think the original advice said something about being careful and check and double check what is really happening. It was made clear the developer has a personal agenda and it is foolhardy to believe he is going to act in your best interests. One of the last posting said the HO's were desparate to utilize this club house. If that is their desire, no one would advise anything other than you all are the ones desperate, so cut a deal with him. I say don't be desparate and certainly don't convey that to anyone, because first of all, unless you voted on it and asked the right question in the vote, you don't know what or how desparate you are. This is a business deal, do all the talking you want but don't sign anything you don't receive legal advise about. It always come back to: "It is not your money you are playing with", if you can't answer the questions, don't do the deal, Certainly the advise to know what you are doing is sound, we don't give legal advise, we give considered advise and offer guidance. We can not write a legal proposal or judge a legal proposal, but we can give an opinion, but in the end, we sort of expect for the poster to take our advise, not continue to tag bits and pieces on the end of a post that changings the consideration of our evaluation of the preceeding posts. I see no end to this rainbow.