Meeting with Developer/Builder

Started by MaureenM1 • 17 replies • 1369 views

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MaureenM1 (PA)
Posts: 344

Posted:

I want to "try" to set up a meeting between our Developer and Builder and the Owners in our development. We are under developer control builder is the President of our Association with the majority of votes (3). Myself and one of my neighbors are the other two board members.

There is alot of blame going on between the developer and builder as to who should pay for capital improvements, ie roads, gates, etc.The development is 40 homes, 19 sold, 9 owned by the builder and 12 more to be built. The development started in 2005.

We have been promised by both that work will be completed the end of April 2009. It is now May. These empty promises have been going on for years.

We recently received an email from the builder (President) asking us how we should proceed against the developer. (I don't trust either one of them).

I have not replied to his email. I wanted to see if anyone had a suggestion on how to handle this situation. I would like to meet with the Developer, Owner, Township and Owners before seeking legal advice from an attorney. Should I draft a formal letter and have all interested owners sign it and send it to the Developer/Builder or have an attorney draft and send such a letter? The owners want to protect their investments and want to find out what the future of this development is.

Any advice I can get on this would be appreciated.

RogerB (Colorado)
Posts: 5,067

Posted:

Maureen, I would start by collecting and reviewing everything which is documented in writing. Copies of documents the Developer provided to the planning commission to get their approval, any agreements between the Developer and the builder, sales brochures, and the Declaration of CC&Rs come to mind. Then I would request a special association meeting for the purpose of the Developer and the builder explaining their positions on items in dispute; and to conduct a vote on what further action the association members require the association to take, if any.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Maureen:
There seems to be 2 things that strike me:

1) the builder has not completed his promise for the number of homes. However, in THIS economy, don't count on anyone building (OR buying, for that matter).

2) the developer sold you on a home that had a gate, roads, etc. and he needs to step up to his promises, whether there are 5 or 50 homes. The fact that the gate is not even working tells me that regular maintenance is not being done.

Who is responsible for the most pressing problems seems to be the issue.

Does your HOA board have a budget and a maintenance plan? Your board needs to sit down and implement a plan to protect your property values. But just who controls the purse strings is not clear.

MaureenM1 (PA)
Posts: 344

Posted:

yes, we do have a budget and maintenance plan which is sent to myself and the other board member in our development. He is a financial analyst for a major corporation.

The board consists of the builder and two of his appointees, myself and my neighbor. The builder has the majority of votes. I would welcome sitting down with the board and to discuss their plan for the future of our development and our home values howver, they may deny our request.

We have asked for meetings before with our builder and he always denys our request. Any suggestions as to how we can get them to meet with us?

KirkW1 (Texas)
Posts: 1,665

Posted:

The whole thing is most likely a contract dispute between the developer and the builder and the HOA should not be involved. Further, should the builder use HOA funds to enforce the private contract then I would look into suing the builder for breach of fiduciary duty and misuse of funds.

In the meantime I would try to get as much information as possible. Contact the planning office of you city (or county if not in the city) and see what information they have. Typically plans and the like must be filed and often a bond is involved to ensure the developer does what he/she is supposed to.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Mureen,
With your past history of broken promises and the control still held by the developer, you think, and the builder and the developer maybe intermingling association funds and the owners holding no real power, the only out I can see is if you (personally) have owners support who will to go outside the process. You are being asked to sit a a table and you have no power. I would really get some help paying an attorney to represent the owners, as a Board member (now) you don't represent the owners. Did the owners elect you? There may be some state requirements that might address your prediciment, but I doubt it. If you had ten supporters, I am sure a good HOA kawyer could get you some leverage, right now, you can go and ask and that is about it.
And the other poster make valid points. You have to find something that allow the owners to speak with a loud voice..........otherwise, all you can do is make concessions.

MaureenM1 (PA)
Posts: 344

Posted:

Yes, I was elected by the owners in the development to the board. We have quarterly meetings (just had one last week) amongst ourselves.

I have already researched HOA attorney's and have one in particular that I will be contacting.

thanks for the advice.

MaureenM1 (PA)
Posts: 344

Posted:

I have been to the township before to get copies of the site plans for the development. Is the bond info public knowledge?

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Posted By MaureenM1 on 05/12/2009 5:59 PM
I have been to the township before to get copies of the site plans for the development. Is the bond info public knowledge?

Yes.

Well, let me restate that, "it should be."

At least it is here in Kentucky.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Maureen, I second Michele and others I think. If you are talking about the Bond the developer has to post in place of posting a specific amount of money to the Reserve account. surely a lawyers gift to his ilk, in SC that would be on file at the courthouse.
I would think anyone at a courthouse record room would tell you where to find it. In our docs it spells it out.
So Maureen you are wearing two hats, so to speak, the developer appointed you to his board and you were elected to serve a position in a self formed owners group. Is that right? I hope it is because if you were elected to serve on the developers board how did the owners get any authority to do anything. Right now the developer is the only one walking around with bullets in his gun.

Neon lights.........."Get a lawyer...get a lawyer".
You don't have to adopt one, just find out what the hell is going on.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Well, we don't have a "reserve" account, so I just presumed she was speaking about the bond that the developer posts with the city and with the sewer district until the roads and all drainage and sewers pass inspection.

In one section of our development, a second developer (one who our developer sold that section to) walked away from a $750,000 bond. The county used it to offset their costs for repairing sewers and paving the roads in that section.

That bond amount was public information.

MaureenM1 (PA)
Posts: 344

Posted:

Robert,

I was not appointed by the developer to be on the board. I was ELECTED by the owners. Our CCR's state that when 25% of units are sold two members of the board appointed by the developer must resign and two owners are to be elected.

Again, I and another owner in the development were ELECTED by the owners. We have a "self formed" owners group that is separate.

As you know, HOA's are very complicated and I am going to consult with an HOA consultant as soon as possible so I can find out what is going on.

thanks,
Maureen

RobertR1 (South Carolina)
Posts: 5,164

Posted:

MaureenM1 (PA)
Posts: 344

Posted:

Maureen,
Tell us how this is structured. How did your owners get a vote? Did they vote as members of the HOA? How can the HOA be chartered if you don't have elections for all officers?
Is your association registered at the courthouse, are you licensed by the state? Who set up the election and who verified the results?

Maybe I am just drawing a blank here, but I don't recall any time we at this site ever heard of the developer running an election of Homeowners. Is this common practice in New Jersey?
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Forums > Homeowner Association > HOA Discussions > Meeting with Developer/Builder

Robert,

I will try to answer all these questions. First the owners are all members of the HOA. The builder and developer are still in control. The property management held the election for the President of the Association who had 5 board members including himself.

Our Declaration states when 25% of the homes are sold then two of his appointed board members need to be removed and two owners be elected. Since he owns several he put himself and his brother on the ballot. Myself and my neighbor was elected via ballot by the owners to the board. We are on the board for three years and can only be removed by the owners.

We did not have elections for all officers because it states in our Declaration that the Declarant (builder/developer) appoints five board members until 25% of units sold, after 75% sold the Declarant and his appointees must resigned and an election to vote three new board members would take place, however, the Declarant can vote on his property that he owns.

It doesn't seem on the "level" to me that is why I am consulting with an attorney who specializes in HOA law. I lived in NJ when I registered with this website but am living in PA in a townhome development.

Our Declaration has been recorded with the county and I assume our HOA is registered with the courthouse.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Maureen,
I don't know about how "level" this stuff all is. But if you believe anything else I submit, you, as an owner, have a right to know what is going on. I don't have any idea why the Master Deed and By-laws are not listed the same place the declaration is.

You have a lot of holes in your knowledge bank that I think I would find out about. Are you a corporation licensed by the state? Check your state on line services. Are you a non-profit corporation?

Go to a neighbor condo or Hoa and ask to look at there documents and tell them why. You want to compare. I would not assume anything.

Why can't you find out all this stuff from the developer. Ask him where his authority comes from to hold elections. Now I hear you have a management company, go to them and ask them to explain your structure and take notes. Maybe this all makes sense if explained the right way.

If you and your friends don't understand it them if nothing else they developer/builder/management owes you that. You and yours want to find out ALL the public information about these companies before you get a lawyer, you also want to know what he is talking about.

Again, who knows about these things.........level or not..........you just keep turning rocks over and find out what happens.

Answer this? What kind of input fo the two elected board members have at a meeting and do they chair committees or have access to financial. Is your vote counted by roll call? Do you have executive sessions? Do you publish minutes, notices of meetings? Are your meeting closed, who take minutes? Do you sign off on minutes? These are all standard procedures at nearly all meetings.

MaureenM1 (PA)
Posts: 344

Posted:

Answer this? What kind of input fo the two elected board members have at a meeting and do they chair committees or have access to financial. Is your vote counted by roll call? Do you have executive sessions? Do you publish minutes, notices of meetings? Are your meeting closed, who take minutes? Do you sign off on minutes? These are all standard procedures at nearly all meetings.

Robert....

We have access to financial documents. We receive a copy of the budget each month. We also receive a itemized list of expenses. We have two votes out of 5. The builder/developer and his appointee has 3 votes, so we are always out voted. By executive sessions do you mean annual meetings? we have one and are scheduled to have another in September 2009. Minutes of these meeting are published and sent by our MC to the owners. The meetings are not closed, the MC takes the minutes and signs off on them. (the MC is hired by the builder/developer).

Before I moved here noone even bothered to run for board positions so the developer had complete control for over 4 years. It wasn't until I moved in to the development did we get organized to the extent we are now. We have four quarterly owners meetings amongst ourselves and will have an annual meeting in September.

We have requested to meet with the builder/developer but they always deny our requests. We have met with the township and attending monthly meetings which started off well and then we were told they could not help us and we should get a lawyer. They are in with the developer/builder who is well know in our area.

Our development is small 40 homes of which 12 are to be built. Of the 28 homes that exist, the builder ownes and rents 8, his model that he owns is for sale and today 3 people who have lived here for years put their homes on the market. There is a realtor (husband and wife) who live in our development and they are listing with them.

The 12 homes that are to be built is a smaller version of the original townhomes. He did this without township approval. When we went to the township about it they said he had every right to do it.

I could go on and on but I wont'.

thanks for listening and for your advice on this. HOA's are very complicated and I am trying to understand and learn.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Maureen,

I'm a little confused! When you say "we have requested to meet with the builder/developer. . .", do you mean you and the other h/o on the board or do you mean your "self-formed owners' group"? I can understand the builder and developer not wanting to meet with your self-formed group; however they should be willing to meet with you and your fellow h/o board member. This is the step you should be taking. Have a meeting with them and ask all the questions that are troubling you. Start out by telling the builder you cannot make any recommendations to him regarding his problem with the developer because you don't have enough information.

MaureenM1 (PA)
Posts: 344

Posted:

The builder/developer has refused to meet with myself and the other board member. We have asked several times for a meeting and he has the MC email us stating that he will not meet with us. Last time the MC inadvertantly forwarded his email to us and now we have his email address (which was never given to us before).

We have since emailed him directly or copied him on all email to the MC.

I like your suggestion about not making any recommendations until we get further information.

THANKS!!!

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