Posted By JoeS4 on 09/13/2006 7:16 PM
The townhomes that have been built are fine except for a few flaws..., The homes that have been built to date are great..., it is left to the board to approve foundation plans, roof pitches, and outside appearence of the new homes...
Again...........any help is welcome
JoeS4,
As for fine procedures, do a search on this site for violation letters. Click on number 4, I particularly like RogerBās post in that subject heading.
You indicate you are head of what many call the ARC (Architectural Review Committee). Make sure the rules you develop comply with your existing cc&r's (covenants, conditions and restrictions) that run with the land and are binding on each owner. Make sure the cc&rās and rules you develop do not conflict with state, local, or federal ordinances.
Iām betwixt and between on the responsibilities you and the residents are assuming.
My gut feeling tells me there is liability in owners assuming jobs and oversight of licensed professionals with years of degree experience that you admit none of you possess. IMO, even if you folks did have this trade experience, all that really qualifies you to do is ask the right questions of the professionals, not build the houses and approve construction for god sakes. If self-management, project management, approval of construction, etc. is the way you proceed, be careful and give up your day jobs. As a board member, you can sue, and be sued.
Who is going to be liable if buildings are constructed in violation to state, local, and federal codes? Who is going to be liable if deficiencies in construction occur? Typically, the owners assume control of the board in phases, the last phase of which happens 30 days after the last home is constructed. At that time, the board hires a transition engineer to perform a capital reserve analysis for budgetary funding of the elements. Your governing documents should outline what the HOA or COA is responsible to maintain. The board hires a CPA to perform audits, the board hires an attorney to represent the association(s), then the board re-adjusts the budgets accordingly to pay for these services, and all those the associations are to maintain.
The townhouses and homes are fine according to whom? According to opinion based upon visual inspection, rather than verification that construction complies with an approved set of building plans that are to be signed by a licensed engineer and filed with the inspector/code department official/borough engineer? If future construction isn't revised, than multiply the few flaws you believe exist in the townhouses by whatever is un-constructed, and those flaws you don't know about for the remainder single-family homes.
What you need is a management company (MC), independent attorney and CPA representation, find it, and figure out a way to pay for it immediately.
You may consider organizing a meeting with the owners disclosing enough of the situation in a manner that unites everyone on common ground to achieve a pre-determined end. But I wouldnāt do so without an attorneyās advise.
The pre-determined end is going to take some methodical master planning that involves an attorney of the owners, transition engineer to perform a capital reserve analysis and deficiency report on existing units before future construction takes place, a CPA, the board, a transition committee of owners.
This team, IF spearheaded by the owners must then interact and work with the lender, and the borough to achieve the pre-determined end.
The lender has the votes and the responsibilities they assumed from the developer, whether they like it or not.
Are you and the owners going to set up a sales office to attract buyers? What conflicts of interest exist when residents take on these services?
The boards, or more appropriately a management company (MC) must collect maintenance fees to cover the costs based upon multiple bids from local service providers (insurance, life guards, landscapers, cleaning crews for clubhouse, painters, etc.). I would develop several budgets. 1) An HOA budget formed as if the community is fully developed based upon the master plan for construction of the elements the HOA is to maintain, 2) A COA budget formed as if the community is fully developed based upon the master plan for construction of the elements the COA is to maintain.
It's in no one's best interests to leave homes un-constructed, ESPECIALLY the borough/town because of taxes /ratable on lots. In that way, everyone has a responsibility to his or her investments to get involved AT SOME LEVEL and help see this project through.
On a side note, in theory, the COA (townhouse residents) are part of the HOA (single-family and townhouse) therefore the HOA is all 130 residents. IMO the COA residents should pay two maintenance fees. One fee to cover the costs of the budgets for the COA, and the second fee is to cover the budgets of the HOA. However, Iām not sure what is structured in your governing documents as to a division or creation of two associations. Its benefit is in minimizing the liability that relates to oversight of elements that fall within the jurisdiction or use of single-family and townhouse residents. For example, if you have common sidewalks in your community, and the HOA is responsible to maintain, and someone trips, everyone in the HOA is sued. However, if you have driveways and or sidewalks that are for the exclusive use of townhouse owners as limited or common elements to the townhouse owners than the single-family owners would be excluded from suit.
Best of success!!
GeraldT1
NNJ