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DaveD
(Florida)
Posts:15
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| 05/20/2006 7:03 AM |
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I'm on the board of a small Florida community. With each sale, the buyer signed a lot sale agreement with the developer which contained a covenant requiring the owner to break ground on a residence within 2 years.
My question: Is this agreement enforceable by the board?
I've spoken with attorneys that say yes, and others that say no. I'm of the mind that we will never know until the issue is brought before a judge. However, given the experience and group knowledge of this forum, I thought someone might have been though a similar issue.
Other factors to consider: The developer has completely turned over the neighborhood and shut down the LLC that did the development about two years ago (not a bad guy, just moved on to another business). The usual transition paperwork was completed, but there was not a separate form signed that said "all the developer’s contractual rights and obligations have transferred to the HOA". Also, the documents (Bylaws, Articles of Incorporation, and CC&Rs) do not explicitly discuss this.
As an HOA, we certainly assumed the contractual obligations (electrical contracts, road maintenance, wetland maintenance, etc). It seems that we should assume the rights as well – but this is logical thinking, not necessarily legal thinking.
Sure I can pay an attorney, but we don’t have a lot of money (small community). Also, I think about what happens if we pay an attorney and they say we can’t enforce the covenant. Then we have to let the heel draggers speculate at their hearts content. What if an attorney says we can enforce the covenant? Then we are duty bound to take swift action. The net of it is that I believe we won’t know the real answer until it is litigated.
I welcome your thoughts.
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RogerB
(Colorado)
Posts:3726
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| 06/01/2006 8:48 PM |
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| Dave, why does the Board want to try? Doesn't the owner still have to pay the assessment and maintain their lot? I would not spend money on legal expenses when there is little to gain and a good chance of losing. |
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DARCO Property Management (Colorado)
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DaveD
(Florida)
Posts:15
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| 06/02/2006 4:39 AM |
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The lot owners are paying dues, that isn't the problem. The issue is that they purchased the properties and signed a covenant to build within 2 years. This was never intended to be a speculator's paradise.
Now that the community is 2/3 built out, the vacant lots detract from the enjoyment of the neighborhood and lower home values. New homes that are nicely landscaped per the CC&Rs add more value than an occasionally mowed lot. |
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