Developer at turnover meeting

Started by KennethN • 12 replies • 2739 views

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KennethN (Illinois)
Posts: 36

Posted:

I have been told by our MC that our developer will have no representation at our turnover meeting. Is this a somewhat common occurance?

The MC was in charge of doing everything up to this point (I can't believe that is in their contract?)

Anyway just wondering, I want to put some pressure on the developer to attend, as I feel like it would cowardly to not be there. Maybe I'm wrong.

Thanks,
Ken

MicheleD (Kentucky)
Posts: 4,491

Posted:

The only thing our developer provided at our turnover meeting was the individual letters of resignation (from each officer who was a member of the developer's team), and a formal letter from the developer turning over various controls to us.

Keep in mind, our developer did not relinquish architectural control over new building on vacant lots. Only Arch control over things like fences, additions, etc.

Otherwise, they were not "represented."

JohnK3 (Pennsylvania)
Posts: 967

Posted:

I'll guess your turnover will require the Developer to sign some documents and arrange for transfer of some assets to the HOA. If that's accomplished, his attendance is not necessary, and the lack thereof is not cowardly.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Kenneth,

If you feel the need for his presence, then let him know that. Do you find items that he needs to address? Also, let him know. He should be giving your HOA some sort of documents regarding warranty on some infrastructure items. How about bonds with your County. Will the HOA need to sign and release him?

Cowardly? Not in my opinion unless you have a valid reason for him to attend and he refuses. He is probably off in a corner either counting his money or contemplating his next project.

RogerB (Colorado)
Posts: 5,067

Posted:

Kenneth, I would be very careful about taking over without first doing several things which are listed in the attachment.

📎 Attachments (1):

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📝151164612071.doc(23 KB)

KennethN (Illinois)
Posts: 36

Posted:

Thank you for the replys.

I really appreciate the document provided as well.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Roger,
Thank you for that list. I printed it out to use in the future when we experience turnover from my Developer. The way that things are selling, it might be quite a while.

KennethN (Illinois)
Posts: 36

Posted:

Donna,

That is what we though with only 153 of 2700 lots sold.. but they shocked us with a letter saying your pool and clubhouse are no longer going to be in operation because the association cannor afford it (I don't doubt it). With the letter they said they were going to "voluntarily" turnover the control. We have under 6% units sold and no one is paying assessments on the unsold lots..

Ken

AnnJ2 (Colorado)
Posts: 120

Posted:

If the developer is bailing out then yes it is normal. check your documents and State Law for the legal ability to "turnover" and get a full definition of what he is turning over. If he is attempting to turnover the "declarant rights and responsibilities" and your associatin is only 6% built refuse to allow him to abdicate. If all he is doing is letting the owners elect a board of directors that might not be a bad thing. but if your documents are like most if he is the named owner of the rest of the lots which he most likely is, then he effectively still controls it all with the number of votes he controls within the association. And 10 to 1 you will not be able to even hold a meeting without his participation as you will not pull quorum.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

with only 153 of 2700 lots sold.. but they shocked us with a letter saying your pool and clubhouse are no longer going to be in operation because the association cannor afford it

Ummm... this shocks you? Its disappointing, but it comes as no surprise to me. I'm sure the dues were set at a certain amount, knowing there would be "x" number of people paying the dues and it would cover the cost of the pool and clubhouse. And it doesn't seem like sales are going too well. Sooooo...........

#1 Raise the dues 800% for the units that were already sold to cover the cost of maintaining common areas as they are now.

#2 Shut the common areas down.

PS. As for turning over everything to the association, I'm not familiar with the laws as far as that goes. But you should check into the developer needing to pay dues on the other 2700 lots after he turns everything over to the association. At that point he wouldn't really be the developer anymore and just another lot owner.

PPS. He might be going bankrupt and wants to turn it over before his company vanishes into thin air. Just try and get a signature from him for the turnover of the association if you cant find him. Just a few thoughts.

TH1 (Florida)
Posts: 1

Posted:

Our builder wants to turn over the HOA board to we homeowners now, although his company still has approx. 100 of 600 lots remaining to build upon. As prospective new board members, we candidates have been working on assorted new wording to strengthen our Docs. We have received copies of "financials", a "proposed budget", and we have met with all the assorted contractors, the insurance agent, the attorney, etc. We suspect our builder has ulterior motives to turn over early, but we would not want him to keep control until after he builds and sells his remaining lots as that could be YEARS away, due to the current economy. Plus, what if his company folds completely or restructures under a new company name (That may be why they are offering to turn over now). Some members of our group think we should postpone the turn over. Others think we should accept the turn over now. Our main concern is we don't want to do anything that will allow the builder/developer out of his obligations to our homeowners and this community. All advice will be greatly appreciated!

RobertR1 (South Carolina)
Posts: 5,164

Posted:

My opinion"
For Kenneth,
Well, first, if I read right your board has no authority. Not that I can see. They must be registered and the Master Deed and by-laws have to be followed. I bet your documents start out from the creation of the association and not from when the developer started the process. He has to turn over something to you for you to exist. I would no more go to a turn over meeting without the developer of record, than I would without legal advise at that meeting, well versed in what your interests are to be protected. No time for games, no time to take chances, do it right and do it solid. Your developer is not walking away from the development, he owns to much of it, do you think he will pay assessments on all those lots he owns. There will be a note or two about that in the turn over papers I am sure. He can not force you to accept what you don't agree to. He can wheel and deal and he will, protect yourself. One other thing, if you all are going to pick up some contract with the management contractor, watch your back, again be prepared.

TH1:
Sounds like you are on the right track, but back this up before turn-over with a short visit to an attorney and pay him to sit at your side of the table at turn-over. Make sure he is a good one. Do not give away anymore than you can get in return. You all will be better off managing your association and he will be better off getting rid of it or he wouldn't do it. But do not throw the baby out with the bath water...........you can bet he will be cool.......you be cool also, and don't hesitate to delay things if they don't sound right.

For both of you, run what I said by your attorney and see if he don't agree.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

For those interested in this process.

Go look at post by Jeanne concerning New Maryland laws for condos and Hoa's. Go to end of Jeanne's first post where she details new laws for turnovers.
I fully well understand this is not going to apply to all states but it looks worthy to me and will serve to advise some of the things that are important at turnover.
It also negates IMO, that the developer can not just decide not to show up.

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