Should developer pay annual assessment?

I moved into a new development. There are 48 homes which are built now. 38 of which have been sold. 10 houses have occupancy permits and are still for sale. There will eventually be 144 homes when the area is built out. The Board of Directors was just elected. There will not be a developer/HOA turnover in 2009. The Covenants state: "No annual assessment or special assessment shall be levied against the Declarant(Developer), or any lot owned by the Declarant unless a residence has been constructed on the lot and occupancy permit granted". The developer wants to just pay the grounds care for the unsold homes and leave all the other expences to the HOA. The questions are #1- is he right? #2- should he pay the total assessment for his unsold houses including the administrative cost s that the Board incurs? #3- or should he pay the line items which he directly benefits from, i.e.- grounds care, electricity to burn all the streetlights which affords him the security and visibility, trash collection which his workers use,and insurance which includes director and liability? The main problem in my mind is that the Covenants don't define "the developer's assessments" in this case. Thanks for your input.

Charles,

Your covenants state: "No annual assessment or special assessment shall be levied against the Declarant(Developer), or any lot owned by the Declarant unless a residence has been constructed on the lot and occupancy permit granted".

I think it's quite clear that the declarant needs to start paying the full amount of the assessment on the lots for which occupancy permits have been granted. He's trying to make a deal with the assn, but the BOD is not obligated to agree to it. To be IAW the covenants he should pay the full amount of the assessment. There is no declarant assessment stated in the covenants.

There are permits of occupancy on file.

This is the first year. There is nothing in the Covenants about when the turnover should be. We have a newly elected Board but he said he would handle the finances one more year (09) but I contend he should still pay the entire assessment for the unsold homes.

The developer is collecting the fees and paying the bills. The Board is managing the community in terms of seeing that the residents are adhering to the Covenants, regulations and restrictions. The Board is also overseeing the grounds care, irrigation management and basically making sure that the community stays a desirable place to live. It seems to be a good working relationship between the developer and Board. The developer wants there to be a full turnover, but says if the Board desires, he will put it off one more year since the deveopment is only 26% built out.