Builders non disclosure

Started by GerryB1 • 9 replies • 1226 views

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GerryB1 (Florida)
Posts: 4

Posted:

We recently took over the HOA from the builder. At the handover we were given a contract that the builder had signed with an on site association management company for 5 years. It is a very one sided contract and we want to sack the mgt. company anyway. Now seems that we are powerless as all HOA duties are vested in this mgt company by the builder. Was the builder not obliged to disclose this contract to all owners during purchase process. Have we any legal remedy here?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Gerry,
First read the contract to see if there is a cancellation clause in it. If so, go that route and get out of the contract. Are you unhappy with how this company is representing the H.O.A?

Second, The absolute last thing that a newly turned over association will want to do is to get into a legal battle with anyone, least of all the Developer. It will cost funds that you probably could or should spend in much more important matters.

And then there is this from the Florida 720 Statutes. Sorry but I think that you might as well work to remedy the concerns of the management company choice in a much more logical way, like replacing them if you can. PAY ATTENTION TO "b"

720.3075 Prohibited clauses in association documents.--

(1) It is declared that the public policy of this state prohibits the inclusion or enforcement of certain types of clauses in homeowners' association documents, including declaration of covenants, articles of incorporation, bylaws, or any other document of the association which binds members of the association, which either have the effect of or provide that:

(a) A developer has the unilateral ability and right to make changes to the homeowners' association documents after the transition of homeowners' association control in a community from the developer to the nondeveloper members, as set forth in s. 720.307, has occurred.

(b) A homeowners' association is prohibited or restricted from filing a lawsuit against the developer, or the homeowners' association is otherwise effectively prohibited or restricted from bringing a lawsuit against the developer.

(c) After the transition of homeowners' association control in a community from the developer to the nondeveloper members, as set forth in s. 720.307, has occurred, a developer is entitled to cast votes in an amount that exceeds one vote per residential lot.

Such clauses are declared null and void as against the public policy of this state.

(2) The public policy described in subsection (1) prohibits the inclusion or enforcement of such clauses created on or after the effective date of s. 3, chapter 98-261, Laws of Florida.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gerry,
I bow to Donna, as the expert. I would suggest that you try and find out how much support you have in the community that is anti management and try and get documentation concern their complaints. Might help in the future.

You can also do the folks reading these pages and recap how you all got put into your present situation. This kind of thing happens a lot and the more people explain how it happens the less will make the same kind of mistakes. If the developer did not disclose the Management arrangement and commitment you should likely file a complaint with the state.

Would you agree Donna?

But if you all signed the papers as presented, the only thing you can do, I believe, is try and make friends with the management company. Any business should be interested in customer satisfaction if they hope for repeat business. Your contract may also state something to the effect that this management company can not be replaced for five years, which MAY, give you an option to self

GerryB1 (Florida)
Posts: 4

Posted:

Thanks Donna and Robert. Good advice.

Also I have been advised that we could make an official complaint to the Dept of Housing and Urban Development and request our purchase price back from the builder for non disclosure. We have to check if this contract should have been in the "Property Report" that we should have gotten prior to finalising. What is a property report? I dont know if this avenue has any merit.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gary,
Comb through everything you can get your hands on and don't hesitate to request in writing all documents that the assoc. and the developers turned over to the assoc. I think I would also ask the developer in writing of any documents he has that were signed during transitition. Keep digging Gary and keep good records and ask Donna legalities.
I wouldn't be surprized to see a document titled "Property Report: somewhere in a transition package. Ask your HOA/BOD , M/C. developer. whatever, to provide you with a copy. Don't make a habit of doing this but do it at least once to get it on the record.

I dfoubt the developer would make such an error that anyone could get their purchase price back, but, who knows. Developers pay big buck to keep out of giving anyone a nickle.

GerryB1 (Florida)
Posts: 4

Posted:

Robert/Donna.

Thing about it is that they handed over the contract at the last minute(at the HOA turnover from builder to owners). All owners had gone through their purchase at this stage. I have asked all the owners if they had any sight of this contact prior to this and no one has found as yet. Having the same company managing the association and doing the rental is a hugh conflict and would have been a significant consideration during purchase and as it is now transpiring is adverse on the site. I have also requested from the builder evidence that they disclosed this contract to all owners prior to finalising.

Its great to be able to discuss this with others as we have no funds for a lawyer becuase of this mgt company's reckless use of HOA funds.

Gerry

DonnaS (Tennessee)
Posts: 5,671

Posted:

Gerry,
Even seeking free advice from higherups will not be free. Report the Developer as you have already started but DO NOT get started in a legal wrangle with him. You already have stated that there are no funds to pay for legal. Start to right the train back onto the tracks. It is early enough that you can straighten tis out. Rid yourself of the management company, hire someone who will work openly with your HOA. I am not a fan of lawyers and once you open that door, it will not be an easy of cheap route to take.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gerry,
Come on, fess up, tell us what is going on, not what you want us to hear. Who turned over what to who, who signed the papers, tell us about your board, at least tell us the size of your association. If there is a legal way out Donna can probably help and others also, but, you got to come clean and know your problem and lean how to transpose your concerns to some words that contain information.

GerryB1 (Florida)
Posts: 4

Posted:

Story is as I've saying. There is a rental management company on site that we have not been unhappy with since all 2008. We all signed RENTAL management agreements with them individually. We were not happy with them and decided to sack them off site once we got control of the HOA last October. It was then that we found that the builder had contractually signed a 5 year ASSOCIATION contract with them. Priority one is to get this company off site but we are bound up with these agreements and contracts. Also we need to act fast as this company hold all the purse strings and can make individuals financially suffer. Terrible to say that we cant get control of our own houses.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Gerry, I think we understnad where you are but as for me I still don't know how you got there. Did you all sign one document that gave this rental company some rights to your property? That would not be a rental contract that gave them permission to rent the property. How many are involved here that don't rent or are you all second home owners looking to rent your units. Are they rented, do you get an income? Who is living in them? Do you have a Board that hold meetings and makes decisions, I think you mention it was you and a fellow board member that was upset.

I think it best I back off this until I can assure myself I know what is going on. This is all bizarre. I am not saying this don't exist, it obviously does, as you attested it did. But how did you get there? If all is known about this is what you have told us. whatever it costs, hire the best lawyer in the state and start there.

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