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Can the builder change or “amend” the governing documents easier than the association could?

Started by CharlesW111 replies • 1976 views

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CharlesW1 (Georgia)
Posts: 826
Posted:
Good day all. It has been some time since I’ve posted. Although, I continue to receive and frequently still review many of the new threads that are being posted and discussed.

To make a long story really short, my wife and I would like to reside in Pa in a couple of years. I have asked for and have received the governing documents for the community. I’ve read them through and there are several covenants NOT written or are silent (that won’t necessary affect me directly, but as far as enforcing the covenants, most definitely, they would.

Is it “easier” for the builder to change the covenants prior to turning the association over to the members?

Since, I have been on the board, here in Georgia; there have been several covenants I felt either needed to be amended or added, but getting the covenants amended as you all know is extremely difficult and very time consuming, to say the least.

I would most like to hear from as many of you as possible.
Thanks in advance.
Chuck W.

Charles E. Wafer Jr.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Hey Charles,
Welcome back. Yes, the Developer has the right to change anything in the documents as he pleases. It will say so under most sections reading like -" the developer shall have the right to amend, recind or alter these restrictive covenants until as such time that a percent of lots are sold" or a similar language. Until the association recieves the formal turnover, it is pretty much his game and he does as he sees fit. In these financially tough times, some developers are trying to lessen amenities of the developement and that is where they end up with very unhappy buyers, many who bought expecting a certain amount of perks. This usually ends up with legal intervention but one has to understand both sides.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Charles,

Even if wording Donna has suggested is not contained in the CCRs (nothing to this effect in my CCRs) , the builder (declarant) still has the upper hand while he is in control. Generally speaking, the declarant IS the board. I say this because the declarant usually appoints members of his staff to board positions, thus maintaining control of the actions of the board (who in their right mind is going to vote against the boss?). Any action that would require a vote of the members (such as amending the CCRs) also gives the declarant the upper hand. Generally the declarant (Class B member) is alloted more than 1 vote per unsold lot giving him the majority of votes while still in control of the assn.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Charles,
I expect you will on occasion find a developer that would take the time and effort to amend the covenants, however, I think he still has to change the documents as filed in court house. This means to a developer; time and money. Plus, the fact at turn over time the developer just want to be shed of thje whole mess.

I would suggest, if you could get enough current owners to understand your concerns, the developer might just take your advise to heart, especially if this action could prove to be a a bargining chip to help him. Nothing wrong with this and it might just be fruitful to have a discusion with developer. The big problem there is you can't see the future and five years down the line find out you have given away too much to get what you want done. Another suggestion may be to ask the developer to name you to his Board and see if you can work from inside, so to speak.
MicheleD (Kentucky)
Posts: 4,491
Posted:
I'm trying to remember our handover, but it seems to me that prior to turning the association over to the homeowners, the developer DID make SOME changes to the by-laws, but not the Deed Conditions, Covenants, and Restrictions.

I think that early on, LONG before the subdivision was entirely built out, that the developer had made SOME changes to the CC&Rs. . .for one thing, I distinctly remember seeing a restriction that stated that vegetable gardens were NOT allowed.

That was about a year before my husband and I finally decided to buy here.

We had a couple meetings with the developer and even kept a copy of the governing documents while we searched around other subdivisions.

We did get another set after we bought the lot and it turns out that restriction disappeared into thin air.

I thought I was going crazy until I was talking to one of the "pioneer" residents and he got his set out. Sure enough, there it was. But everyone else ended up with a set that didn't include that restriction.

How and when did it change? I have no idea.

So, to bring this ramble around to some kind of point, it's possible that developers are able to amend governing documents prior to turn over.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Michele,
I think your post about the owners having differences in individual copies also points out the lack of any kind of document scrutiny to insure the integrity of the documents HOA's and condos give out. Where is the oversight and who approves the changes as we move along in time. We can say the members do, but who decides they are right, well, we can say our lawyer does, but actually he is a paid gun. In truth, what ever is on the final draft of the changes, that is filed at the court house and there is no judgement as to legality. How many times have you heard about documents not found enforceable because of errors and being just plain illegal.

Nope, don't have an answer.
CharlesW1 (Georgia)
Posts: 826
Posted:
I don’t have nearly as much time as I once had. Although, a few minutes here and there certainly helps. I do appreciate the advice thus far and I will compose what you all have suggested and send well formulated thoughts to the builder and see if the suggestions do anything.

I’ll also be posting a new thread, here shortly asking for your suggestions once more. I look forward to reading what you all have experienced with association living. I will then suggest changing “amending” the current covenants, to benefit the community and see what happens.

Thank you all once more.

Chuck W.

Charles E. Wafer Jr.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Michele & RW,

If the developer did change the CCRs there should be a notation stating they have been amended. My assn CCRs state: "Amended and restated master declaration of covenants, conditions, restrictions, assessments, charges, servitudes, liens, reservations and easements for the XXXX HOA." However, we all know things are not done as they always should be and also different states have different requirements for doing things. In most instances when the CCRs or bylaws are amended, the whole document is not changed. Instead the amendment is recorded separately and attached to the original document. However, I'm sure there might be some instances when the developer might make a number of changes to the original document and record it as an amended document as my CCRs show as I stated above.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
"Is it “easier” for the builder to change the covenants prior to turning the association over to the members?"

I assume by covenants you are referring to your CCRs.

I believe it depends on the laws of your state. Here, in CT, the statute states that once the builder has filed the CCRs (Declaration) they can only be amended by an affirmative vote of 67% of the homeowners, even while still under developer control. There are a few exceptions. The developer may unilaterally amend the CCRs to declare new units and to make corrections where the CCRs are not in conformance with state law. Developers sometimes believe that since they created and filed the CCRs that they can unilaterally amend them as long as they are still in control. However, that may not always be true.

Short answer - It may not be easier for the builder to change the covenants. He may not be able to change them at all. Check your state laws. Also check your CCRs to see what they have to say about amendment. That's the procedure that has to be followed, provided it's in compliance with state laws.
RobertR1 (South Carolina)
Posts: 5,164
Posted:
BruceF,
I expect you are way more right than wrong, however, There are some states that take the position (excluding criminal activity) that the goverance of Private Communities has to be done by the associations.
State laws may proscribe or require CCR'S be filed for Condo's and ignore HOA's (SC for one), and I suspect there are states that ignore both. But, I also expect there are CC&R's out there that have no legal standing and have never been filed in Court House or listed as a Business corporation. Also, the developer could make changes as he goes along and who is to know? I don't know of any CC&R cops. No one is watching the store in this Private Residential Organizations, unless it is the Homeowners trying to do the right thing. I am not saying this is the norm but certainly could be the exception. Of course the developers can benefit from writing a set of documents that allow them to control certain functions until they want to turn them over to Owners, on their terms on their time frame.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Sad, but true, Robert! Even states that do have HOA statutes (for both condos and p/c's) there may not be a state agency to oversee HOAs. When this is the case, a member's only recourse is to file a lawsuit and how many of us can really afford that?

BruceF1 (Connecticut)
Posts: 2,535
Posted:
Robert,

The problem is largely one of enforceability. The builder may change a CCR provision unilaterally in violation of state law, and maybe no one would know (as you say, there are no CCR police), but it wouldn't be enforceable. If an issue were to arise later on concerning the changed provision, it would most likely be declared null and void by a court.

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