Developer's obligation re: dues

Our developer has handed the daily operation over to a new board, though he still has the controlling vote. He still has 40 lots out of 220 in inventory to sell. He set up the by-laws prior to any owner input allowing him to not pay any dues on any of these lots,ever. Is this standard policy? Our board feels that through the next several years he will take advantage of all of our upkeep and maintenance and that some contribution is appropriate.

Since the HOA had to be set up prior to the first lot being sold, did any of you read the documents prior to purchasing your home? Were any red flags raised by your Realtor or Attorney (if used during the purchase of your home)?

As I understand, this is completely standard. Both the Developer/Builder not having to pay dues on unsold lots AND the Developer/Builder preparing all the founding documents prior to the sale of the first lot.

What upkeep and maintenance will those unsold lots be using, anyway?

Finally, if I read correctly, the Developer has handed over daily operation, but TURNOVER has NOT happened?

John,

When do your CCRs say turnover occurs? From the figures you posted it appears the developer still owns approx 19% of the lots. Since a BOD made up of h/o's has been elected to run the assn I don't understand you saying the developer still has control. The votes he still maintains for the unsold lots are only votes for issues that the members would be voting on, which ususally isn't very much -- election of board members and perhaps to ratify the budget. I can't imagine how he would have a majority vote on the BOD if it's made up of h/o's. Please explain!

As others have mentioned, the standard procedure is to adopt all the governing documents b/4 even one lot is sold. However, many bylaws give the board the authority to amend. If yours are like this then the board may amend any provisions they don't like, with the exception of the provision stating the developer shall not be obligated to pay assessments on unsold lots. I would venture to say that provision cannot be amended w/o the developer's approval.