Developer Violates Law

Started by ThomasC2 • 25 replies • 1945 views

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ThomasC2 (Pennsylvania)
Posts: 26

Posted:

Well,I guess in this poor housing market it had to happen sooner or later.

Our residents, (of this +55 Community,) were called to a special meeting last night and informed that our Developer, (who still controls the Board), has sold a Mega House to a couple, one 45 years old, and the other 40.

Needless to say the Residents are up in arms.

He said it was a mistake, and won't do it again.

Yeah, Right.

I believe he is in violation of the Planned Communities Act and something needs to be done.

Does anyone have any advise as to what are options might be?

I think a resident on the Board is contacting a lawyer.

Thanks in advance for any insight.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

He may or may not be in volation of the law. The Federal Fair Housing Act requires only that at least 80% of the units be OCCUPIED by at least ONE resident that is 55 or over in order to maintain status as a 55+ community. There are some exceptions. Nothing is said about who can OWN them. What happens if you don't meet the requirements is that your community can no longer exclude those under 55. There is no penalty that I know of.

State laws or local ordnances may be more stringent. You'd have to check.

I don't know anything about the Planned Communities Act. Is that a state law?

SusannaM (Florida)
Posts: 366

Posted:

I understand your disappointment/anger but are you positive this couple bought to live there?? or, for their parents??? or, both, couple and parents ??? does this couple have children?? In this depressed housing market it's better not to have too many houses sitting empty. The worst would be for this developer to go bust for lack of sales, and leave the HOA up in the air.

SusannaM (Florida)
Posts: 366

Posted:

I guess Bruce beat me by a few seconds. In addition to Bruces' valid argument, not too many baby boomers are buying mega houses these days. Retirement accounts and investments have decreased in value considerably in the past 2 months alone.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

What is a Mega House? Like a McMansion? And does that matter, or just a detail?

Anyway, Brian and Susanna raise excellent points.

Much more info is needed for sussing this one out, if you ask me.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Errata:

Bruce also raises excellent points. I'm sure Brian would have, or even might in the future!

DonnaS (Tennessee)
Posts: 5,671

Posted:

Thomas,
Unless your governing documents definitely state that no owner or resident may be younger than 55 years old, there would be NO violation for the Housing For Older Americans Act. That Federal law allows up to 20% of the owners or residents to be under 55 years old before the association loses its 55+ status.

You will need to quote for us the section of the Penn. Planned Communities Act that shows your developements restriction and age restrictions so we can better understand why you feel that this home cannot be owned by younger folks.

As has been stated, associations should be happy to get paying owners in place to help defer the cost of running the association.

SusanW1 (Michigan)
Posts: 5,202

Posted:

One 45 and the other 40? does that mean babies, too??

Is that the real fear?

KirkW1 (Texas)
Posts: 1,665

Posted:

Donna,

Sorry, to be picky, but isn't the percentage based on the number of units with at least one person age 55 or older? (So that with two adults 20 years old, three children under 18 and one person 70 counts as part of the 80%?)

The thing is that I am right about how to calculate, then you can have 2 of every 10 homes sold (and occupied) by families in which nobody is age 55 or older.

Thomas,
If the developer really had such bad intent why did he call a meeting and explain what had happened? If my calculations are correct he could simply sell one of every 8 homes to younger people without any problems at all.

SusannaM (Florida)
Posts: 366

Posted:

Kirk,
Donna loves to listen to herself "talk" and sometimes she just post for the sake of posting.

MicheleD (Kentucky)
Posts: 4,491

Posted:

0.0

o. my.

DwightT (Idaho)
Posts: 664

Posted:

Susanna - you are certainly entitled to your opinion, but that was just plain rude and obnoxious.

BrianB (California)
Posts: 2,820

Posted:

whoo hoo! i had a good point, and I wasn't even here!

that's like rain on your ex's wedding day, a black fly in the couple's toasting chardonay...

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

Hi Everyone,

Seems I touched a nerve with my post.

OK, lets see if I can correct and make this issue more clear.

First, I misspoke regarding the PA, (that's my state), Planned Communities Act.
The Act speaks not to the age of residents, but to how the Community is to be developed

BruceF1:
The Developer himself admitted he was in error in his interpretation of the Fair Housing Act.
Our Planned Community Document specifically states "Occupancy of the units shall be restricted to use by permanent residents fifty-five (55) years of age or older with no children under nineteen (19) years of age in permanent residence.

There are some exceptions, but they have to do with care givers and a younger partner of a 55 year old.

SussanaM: The couple bought the home for themselves and occupy it now. I'm not sure about children but if they do have under nineteens, it only complicates things further.

JohnK3: Mega house simply means it's a 2 story with expansive elevation as opposed to the majority of single story smaller homes.

SusanW1: No idea if they plan to procreate. I wasn't consulted.

KirkW1: The Developer did not call the meeting. It was called by the 2 Resident members of the Board who somehow learned about the sale after the buyers moved into the house.

Just as an aside, our documents also clearly state "The Executive Board shall be obligated to conduct an occupancy survey every 2 years as required by 24 CFR Section 100.37 in order to qualify for the "55 or Over Housing" for older persons exemption under the Housing for Older Persons Act of 1995 (U.S.C.A. Section 3607) and the Executive Board shall provide a copy of each occupancy survey to the Township.

Hope this additional info sheds more light on our situation and elicits further comment.

Thanks.

TomC2

DonnaS (Tennessee)
Posts: 5,671

Posted:

Susanna,

You have become very critical and there is absolutely no need for this behavior on this site. Find another place to attack others or I'll file a complaint with the monitor. We don't treat each other that way.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Pull in your claws, girls . . .

Like I said, What about the (potential) kids? THAT'S what I'd be worried about. After all, that's what many over 55ers moved in for: quiet!!

DonnaS (Tennessee)
Posts: 5,671

Posted:

Kirk,

I probably could reword that better but the basis of the 55+ allowance is from the FAIR HOUSING ACT and HOPA requirements for housing for older Americans Act. I have copied the key sentence below.

"HOPA retains the requirement that senior housing must have one person who is 55 years of age or older living in at least 80 percent of its occupied units. It also still requires that senior housing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older. (no underage requirements)

An exempt property will not violate the Fair Housing Act if it includes families with children, but it does not have to do so. Of course, the property must meet the Act's requirements that at least 80 percent of its occupied units have at least one occupant who is 55 or older, and that it publish and follow policies and procedures that demonstrate an intent to be 55 and older "

Now, there are some associations in S. Florida that have documents which DO NOT allow anyone under the age of 55 to reside in the developements without any problems with the HOPA act because the act has no minimum restrictions. In other words, the associations do not have to allow at least 1 resident to be under 55.
IDEAS???

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

Everyone,

Please do not think me confrontational, but my original post continues to stray afield.

Please, let's for the sake of argument, concede that the builder is in violation with this sale, (according to our documents) as he has admitted.

Returning to my original question, addressed to those of you qualified to answer, sans speculation; "What are our remedial options"?

Some have suggested the builder buy the house back and dealing with the buyers in our out of court.

Another suggestion claims we could surrender our +55 status exemption and all buyers and sellers, (both past and current), could sell to anyone without age restrictions, while still leaving the HOA in tact.

Thanks again.

TomC2

DonnaS (Tennessee)
Posts: 5,671

Posted:

Thomas,
No one thinks that asking questions is being confrontational, You have a very valid situation here and there will be a variety of responses.

After reading your O.P, I wonder, have you had your official turnover from the Developer yet? He has the power to change documents as he please until he has turned over your association to the membership.

If you have had turnover, then it is up to the membership to change your Corporations status by a vote of the entire membership. Could the Developer buy back the house? He could but would he?

You could have an amendment to the CC&Rs, allowing the buyers to remain by surrendering your 55+ status. What would be the chances of that passing a vote? Probably not much because that is why you and others bought there.

For the Developer and the association to allow this one family to stay but not allow others to buy in is then creating 2 classes of membership. That I venture to say is something for others to challenge in court. Do I have an answer? No! This is fodder for the attornys.

DonnaS (Tennessee)
Posts: 5,671

Posted:

spellcheck--attourneys.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Try this again, Attorneys

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

DonnaS,

Thank you for your reply.

As to Transition. The answer is no, not yet. We have a transition committee interviewing several firms for proposals to do a Transition and later Reserve study.

As I said earlier, Builder still controls the Board.

Are you suggesting, (if I read you right), he can change the documents to suit his needs at will and abolish our +55 status?

Well, as you suggest, this would appear to be headed to litigation.

If it does go to court and we are successful, should we not be entitled to recapture court costs and attorney's fees?

Hope so!

Thanks everyone, stay tuned!

DonnaS (Tennessee)
Posts: 5,671

Posted:

Thomas,
No, I do not know if he can just dissolve your 55+ community. This would be where you need legal counsul. Dissolution is where I would not venture to make a call. But he can change the CC&Rs at his discretion and seeing that you have the "no children under 19" in the CC&Rs, he could remove or change that. He could allow up to 20% of the residents to be under 55 years old as that is what the Fed. law says and that could be in your CC&Rs also. So basically he could correct this by a change in your CC&Rs that he still controls.

hoatalk (California)
Posts: 603

Posted:

Quote:

Posted By SusannaM on 11/18/2008 6:34 PM
Kirk,
Donna loves to listen to herself "talk" and sometimes she just post for the sake of posting.

SusannaM: Our posting rules require posts here to be 'Friendly and Helpful'. Your post was neither as some other members have pointed out. We try to keep this a positive place that welcomes open yet friendly discussion. Please help us do that.

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SusanW1 (Michigan)
Posts: 5,202

Posted:

From a Google search on "definition of over-55 community":

"There are two basic types of active adult communities. One type of active adult community is age-restricted, and the other is age-targeted. In the United States, rules created by the Department of Housing and Urban Development (HUD) govern age-restricted communities. These rules require at least 80% of the households in an age-restricted active adult community to include an individual who is 55 years of age or older. Individuals under the age of 55 may live in an age-restricted community, but permanent residents must be 19 or older.

An age-targeted active adult community is very much like an age-restricted community. However, age-targeted communities simply aim their marketing materials at individuals who are 55 or older, but do not specifically require residents to be of a certain age. Age-targeted communities make use of carefully structured marketing campaigns to attracted older individuals without minor children, rather than young singles or families. While it is true that children are typically not residents of active adult communities, they are not unwelcome. Many residents have grandchildren visit on a frequent basis."

_______

The OP should find out if his complex developer is obligated under a legal term or a marketing term.

SusannaM (Florida)
Posts: 366

Posted:

Quote:

Posted By hoatalk on 11/20/2008 4:19 AM

Sorry OP for the distraction.

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