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JoanR (North Carolina)
Posts: 24
Posted:
I'm in a development under Declarant control. The board consists of the three developers. They will not make themselves available to the residents for questions or complaints. All communication goes through the community manager they have hired. The manager's response to almost everything is that she cannot get an answer from the board. At the last annual meeting the community manager ran the meeting and there was no representation from the board. I asked that another meeting be held with representation and the response was 'no'. Owners cannot voice concerns and get answers and they rely on the annual meeting as the one opportunity in a year's timeframe. Did this meeting qualify as an annual meeting? If not, in NC is there any recourse other than a civil suit?
MaryA1 (Arizona)
Posts: 7,043
Posted:
Joan,

The only determining factor as to whether a legal annual meeting was held is whether or not a quorum was present. I doubt there is a requirement for the board to attend. The board's lack of attendance at the annual meeting is not cause for civil action.

Exactly what are the concerns you have with the developer? How long b/4 transition occurs? Can't you just call the developer's office and ask to speak to him; afterall, you purchased one of his homes. It's always a good idea to remain on friendly terms with the builder just in case you need to have something taken care of with your home.
JoanR (North Carolina)
Posts: 24
Posted:
The development is 3 years old with only 20% of homes sold. It appears it will be 2015 before there will be an elected board. Developer claims it is the economy. Owners very much want more sales and suggest the property should be maintained for a better appearance, as in landscaping (maintained as under contract), amenities completed as in dock on pond for fishing and walking trail. Owners are upset they have purchased and were promised these amenities (these are only a few) would be completed in 12 months. There is compassion the economy is bad now for the developer, but it is difficult to live in what appears to be a dump and see potential buyers drive through and hurry out because of appearance (confirmed by talking with prospectives).

Developer is reducing services that are under contract to save money so he makes none of the budgeted developer contribution. Understandable he wants to save money, but he would put a lien on my home if I didn’t pay my fees that are part of the revenue stream in the budget. I would like to live in a community that resembles what was promised during the sale.

Walking trails seem like a luxury now, but there is no way to access other areas of the community other than going by car onto a very busy road that is not safe to walk alongside.

Landscaped privacy berms were promised between back yards. The landscaper confirms he was consulted on this concept three years ago. Now we are told the developer has decided against this and owners can put up fences at their own expense. No architectural review documents in place and he approves anything presented to the community manager. We have about five different types and colors of fences now. This is a community that should build out with about 125 homes. The community resembles nothing like presented at time of purchase. The town says they cannot assist unless something was written on the original plat that was recorded.

Homes are being built below the minimum square footage outlined in the governing documents. This effects property values for the few of us who built at the beginning. I’m in the town house area and should have a lower square footage and value than most of the homes. My 2500 square foot TH is now huge compared to the boxes they have built.

The developer is one man, with two absent partners and no office staff. He will not answer his phone, voice messages, or emails. The community manager supports him 100% and indicates he is doing nothing illegal.

It is difficult to remain on friendly terms with someone who is unavailable. I’ve outlined a few of the major concerns you questioned. The State appears to side with developers and builders and I’m not willing to part with my hard earned money during this recession to file a civil suit possibly lose due to compassion to an industry that is a big employer.
SusanW1 (Michigan)
Posts: 5,202
Posted:
Wow
Do other homeowners feel the same?
Your group should hire a lawyer experienced in HOA and contracts.
JoanR (North Carolina)
Posts: 24
Posted:
Yes, this is the consensus of the owners. Everyone has an issue of one sort or another. Hiring an attorney is exactly what no one wants to do because of the cost. That is why I am asking if anyone knows of some action that can be taken outside of the courtroom.

Those of us who built at the very beginning when we getting the ā€˜early bird’ incentives have all had tremendous devaluations in our property. Some of this is due to the economy. Other factors are the appearance of the property and the developer selling spec homes at fire-sale prices so he wouldn’t have to hold the properties any longer. I realize no one can control what price tag someone puts on their property, but it has been disappointing. Almost no one has been able to take advantage of the lower interest rates because the appraisals are about 20% lower than when purchased. Out of pocket money isn’t available in most of the households for a gamble. Did I mention I’m also in a 55+ area of the development that now has families with children.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Joan,

Even though the amenities have not been built, it could be that the developer has not broken any laws. I don't know if your state as an agency that oversees developers, but if they do I would suggest you contact them and find out what the requirements are of the developer. In AZ the developer must file a public report and must adhere to what is stated in it. This is all regulated by the State Real Estate Dept.

I would also suggest you thoroughly read your gov docs. Look for any info that pertains to the developer and what he is obligated to do.

Most developers are concerned to sell the lots/homes as quickly as possible so they can proceed with another venture. Perhaps it is the economy that is causing all the setbacks in your community. The only "action" that might be taken is to get a group of concerned members together and visit the developer at his place of business. Make certain your have one person designated as the "speaker" for your group and have all your concerns written out. Whether or not you are able to meet with him, you should leave a copy of the written concerns with him. If you are able to meet with him, try to be pleasant!
GlenL (Ohio)
Posts: 5,491
Posted:
It's not unusual for the amenities to be among the last things built or developed as they use the profits from the rest of the development to do it. Since you're under Declarant control still it's unfortunate but he pretty much has carte blanch to make changes and allowances as he sees fit. We had a similar situation in an HOA near me where the developer (a large regional builder) applied to the zoning board to change some lot sizes and square footage. I watched it on TV as H/O after H/O made the same arguments you have posted; the ZB let them have their say and then basically said: "Sorry, Charlie there is nothing we can do."

Studies show that 5 out of 4 people have problems with fractions
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Glen,
I appreciate your illustration Glen but that hardy conveys the situation as Susan suggests. She says and I agree. Just because the developer is having a hard time this does not mean he can't be legally questioned about his conduct. If, the will is there, I would call a townhall meeting and see what comes out of it. If the developer wants to be there, it can be considered, I see no reason to allow the attendance of the C/M, as stated he was hired by the developers and answers to him. If the people want to question the C/M actions, do it outside the developer. I don't pretend to know what is going on with the developer but from the O.P. it seems he does not want to be responsive to the folks he sold the properties to. If they want to confront him a organized group, there is nothing wrong with that. In short, pay for a couple hours with a good attorney, pay for advice, and take that to your called meeting, maybe even take the lawyer. You are talking some bad karma here, can cause lo0ss of big bucks.
Having said that and take what you want of throw away what you want, as Mary says, give the developer the opportunity to know your concerns and don't try to hide anything. A direct approach done right could be the ticket.
RogerB (Colorado)
Posts: 5,067
Posted:
JoanR, if a quorum was present it qualified as an annual meeting. To get answers to questions you could make them in the form of a motion: The Board of Directors shall provide all owners of record a letter with answers to the following list of questions ....... within 30 days and if they a special meeting to replace all Board members shall occur on (list a date)." Have a second, approved vote, and recorded in minutes. See if the Board responds .

Realize the Developer still has the controlling votes but hopefully this may produce some response.
GlenL (Ohio)
Posts: 5,491
Posted:
Robert I didn't say it was right, I didn't say it was fair but as long as they're under Declarant control he can pretty much make it up as he goes; his ball, his ballgame. Now this is unfortunate for Joan and her fellow H/O's but this is one of the risks when you buy into a new development. Taking everything Joan has posted as gospel, my guess is that the Declarant is probably having major financial difficulties. As I said it's just a guess but seeing how most Declarant's (being of reasonably sound mind) want to sell out as fast as they can. That way they can move on to the next project and maximize their profits; so it is in their best interest to make the Community as welcoming as they possibly can.

Studies show that 5 out of 4 people have problems with fractions
GlenL (Ohio)
Posts: 5,491
Posted:
Roger if nothing else the H/O's attempting to vote out the Declarant's BOD should give them a chuckle, especially since the Declarant evidently has the majority of votes and oh yeah most documents have something similar to this: fill any vacancy for the unexpired term, provided, however, that a vacancy in the position filled by designation of Declarant shall be filled by Declarant.

Studies show that 5 out of 4 people have problems with fractions
RobertR1 (South Carolina)
Posts: 5,164
Posted:
To all,
I seriously suggest all read Joan's post's again. It appears they do have a serious problem. Let's all concede the Developers are sitting in the Cat Bird's seat, except. he probably don't want to be there.

So is there anything anyone can do? Certainly, unless a individual had deep pockets, taking him to court is not an option.

So if the courts are the answer, it has to be done collectively.

I know that the Master in Equity in SC has held the developer to conditions spelled out in sales brochures, and advertising to require the develop0er to adhere to these publications. I would advise all owners to go over their sales contracts and collect and current or past publications promoting the development.

Proceed with the direction you have been wronged (damaged) and try to prove it, but don't go running to the developers as individuals if you collectively agreed to pursue this. A good layer is a must.

What else van you do, Organize an outside group (not part of the Board, and this should not be hard since you don't seem to have any owner input. Ask the developer for a meeting. If he don't answer, make a record, send him written correspondence, if he don't answer, make a record, Take a small group and walk into M/C office and ask for a meeting, make a record. If and when you start to get a response get it in writing or record the meeting. Do all this and keep out of trouble by agreements not written, talks not recorded and actions not agreed on by the group.

What else? Develop some contact at county or/and city or state offices. Let them know your problems and let them know a bunch of voters have concerns.

Contact any local authorities for enforcement of any applicable laws. Unsafe roads come to mind, but others apply. Stay organized and focused and completely without personal agendas.

Schedule a visit with local, county and state elected representatives. Be factual, be smart.

Utilize any talents within your group. Good speakers, computer skills, check this company out on courthouse records, comb the records for information. Got any lawyers, paralegals? Set up a website outside the association, use in to communicate with the owners. Be factual and don't libel in any way.

Start a association improvement group and start some self help with developers approval, at least make the effort and record.

All this may take a long time, but you all are committed for the long haul (note your mortgage). Barriers will start to erode, take advantage of them. You must HELP yourselves. Don't make it worse, and don't let it ride or it will get worse. You all need to know exactly what is going on. You must find out legally, it worth the effort and do some good old hometown organizing, all within the law and all done for the association, not because a fence is a different color. Instill this mandate into your mission statement of your collective owners.

Let's see if we that post can come up with constructive ideas, or do we say, roll over and wake up when you feel you are no longer being damaged.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Joan,

I know it's got to be frustrating that the developers have chosen not to attend the annual meeting. It's even more frustrating when the person they send to run the meeting doesn't have any answers and responds with "I cannot get an answer from the board".

To answer your question about the annual meeting - Yes it probably qualified as the annual meeting, providing the things were followed per your States corporate and/or property laws. Here are some links:

NC Planned Property Act:

http://www.ncga.state.nc.us/gascripts/Statutes/StatutesTOC.pl?Chapter=0047F

NC Non-profit Corporation Act (only applies if the Association is incorporated in NC):

http://www.ncga.state.nc.us/gascripts/Statutes/StatutesTOC.pl?Chapter=0055A

Other avenues short of legal action available to you:

This depends on what the specific issues are. In general you can do the following:

1. Send a letter with your specific issues (certified if starting a paper trail).
2. Attend Board meetings.
3. Read minutes of past board meetings.

Like I said, without knowing specifics about the issues or what your governing documents say, it's difficult to provide much more advise then this. However, We can offer support the frustration is causing even if it's just providing a place to vent.

Hope this helps,

Tim
RobertR1 (South Carolina)
Posts: 5,164
Posted:
Roger,
Would I be correct if I looked on your post as a step in the right direction as opposed to immediately correcting anything. I think your idea is sound. It will not solve the problems if what we read is factual, but it could crack open a door and the paper trail starts there, and is also becomes obvious the owners are having some collective serious thoughts about what is going on........not a bad thing.
RogerB (Colorado)
Posts: 5,067
Posted:
Robert,
Yes you are right on. It would not immediately correct anything but would start a documented paper trail in the minutes. And perhaps the owners will get the Developer to pay some attention to their desires. Meanwhile, a knowledgeable Developer will always maintain control until near the end of the development in order to protect their investment.
JoanR (North Carolina)
Posts: 24
Posted:
Thank you for all the responses. It is interesting to hear how differently each state operates. The NC Real Estate Commission has no interaction with developers as Mary indicated in AZ. They only oversee the licensed agents. My governing documents list many items the developer should be doing that he is not. There is no agency to enforce the governing documents even though it is required the documents be recorded with the County.

The developer should be aware of the owner concerns at this point. I say ā€˜should’ because of his lack of response I can’t verify he reads the emails sent to him or listens to the voice messages. The community manager indicates he receives her communications but does not respond. The owners have used her as a conduit for communication even though she indicates she is not contracted to deal with ā€˜developer’ issues.

Roger B, you have an interesting suggestion regarding the next annual meeting. If we have a seconded approved motion for information to be supplied to HO questions, there is still no way to enforce they comply. There are no minutes from the past annual meetings and no meetings take place outside of the annual meeting.

RobertR1, Master in Equity is something we all probably wish we had in our state. I did some research and it existed in NC only in the 1700’s and early 1800’s. It appears to be a great system. Early on the developer took the suggestion of the community manager to have what she called a ā€˜shadow board’ that met with him twice. The intention was the developer would meet with this group and disseminate information through them. Minutes were taken and the shadow board asked the developer to sign-off on the minutes as being accurate. He refused saying he wasn’t going to have a paper trail on any conversations. So much for starting documentation other than certified return receipt mail being sent to him.

So far I have met with our mayor, planning manager, County manager and County Board of Commissioners representative. Not one has been of any assistance except to say it must be a civil suit. There also appears to be some finger pointing as in the case of one of our entrances being hidden by vegetation on a berm and no clearly defined place to stop or lane markings. The planning manager said DOT approved the location of the entrance according to the plan and if DOT approved this, it would be a waste of his time to pursue the entrance issues. So I guess I haven’t asked for an audience with State officials yet, but will make the effort in January.

What do you mean by association improvement group? I’ve already asked for volunteers to help with weeding the landscaped areas, replace lightbulbs etc to help the appearance. I’m the only one running around the development with my tools because most everyone else seems paralyzed by the daunting process to make this change.

Any other suggestions for who I should address other than legal advice and how would be appreciated.

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