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ColleenM3
(Michigan)

Posts:2

05/08/2008 2:14 PM
HEllo, I am in Michigan and purchased a condo from Nicholas Homes about 2 years ago. 70 total units, about 44 (63%) of the units are sold, 10 (14%) have been rented and about 16 (23%) are vacant. Our bylaws state that @ 25% occupancy at least one director and 25% of the board should be elected, (this has not been done) @ 50% occupancy 33.3& of board of directors should be elected. @ 75% occupancy and before 90%occupancy alldirectors should be elected. Not to mention no financial information has been sent to co-owners. None of this has happened, when I asked the builder why this has not happened he became very agressive and called me at work with a harassing phone call. He complained that he didn't make any money off of this and many of the co-owners were not paying their Association dues. The builder also told me that if I wanted to review any records I would have to drive two hours to their other office and take off work to come during the day. They also weived a charge for 25.00 to send me a copy of the financial statements for the last two years. The bill states that it will be waived this time per Board of Directors, which dosnt exist. I am afraid that the builder dosnt want to turn over the association to co-owners becaue they are renting several units and don't want a board of co-owners to overturn the renting of units by the builder. Does anyone know what I can do? It dosnt seem that many of my neighbors even care because many of them are renting at very low rates. Thanks C

JosephW
(Michigan)

Posts:735

05/08/2008 6:00 PM
You're probably right regarding motives, but it's not just your bylaws but state law the developer's ignoring: 559.152 Advisory committee of nondeveloper co-owners; establishment; meeting with condominium project board of directors; cessation; right to elect directors; formula; recording consolidating master deed; copy; “units that may be created” defined. Sec. 52. (1) An advisory committee of nondeveloper co-owners shall be established either 120 days after conveyance of legal or equitable title to nondeveloper co-owners of 1/3 of the units that may be created, or 1 year after the initial conveyance of legal or equitable title to a nondeveloper co-owner of a unit in the project, whichever occurs first. The advisory committee shall meet with the condominium project board of directors for the purpose of facilitating communication and aiding the transition of control to the association of co-owners. The advisory committee shall cease to exist when a majority of the board of directors of the association of co-owners is elected by the nondeveloper co-owners. (2) Not later than 120 days after conveyance of legal or equitable title to nondeveloper co-owners of 25% of the units that may be created, at least 1 director and not less than 25% of the board of directors of the association of co-owners shall be elected by nondeveloper co-owners. Not later than 120 days after conveyance of legal or equitable title to nondeveloper co-owners of 50% of the units that may be created, not less than 33-1/3% of the board of directors shall be elected by nondeveloper co-owners. Not later than 120 days after conveyance of legal or equitable title to nondeveloper co-owners of 75% of the units that may be created, and before conveyance of 90% of such units, the nondeveloper coowners shall elect all directors on the board, except that the developer shall have the right to designate at least 1 director as long as the developer owns and offers for sale at least 10% of the units in the project or as long as 10% of the units remain that may be created. (3) Notwithstanding the formula provided in subsection (2), 54 months after the first conveyance of legal or equitable title to a nondeveloper co-owner of a unit in the project, if title to not less than 75% of the units that may be created has not been conveyed, the nondeveloper co-owners have the right to elect as provided in the condominium documents, a number of members of the board of directors of the association of co-owners equal to the percentage of units they hold, and the developer has the right to elect as provided in the condominium documents, a number of members of the board equal to the percentage of units which are owned by the developer and for which all assessments are payable by the developer. reference: http://www.caimichigan.org/laws/act59.pdf State law also requires that a financial statement be provided to all co-owners at least once per year. Regarding the records: 559.157 Books, records, and contracts; examination; audit. Sec. 57. The books, records, and contracts concerning the administration and operation of the condominium project shall be available for examination by any of the co-owners and their mortgagees at convenient times and all books and records shall be audited or reviewed by independent accountants annually. Such audits need not be certified. Don't be intimidated. If the developer doesn't compy with the state laws and his own documents, then it is up to you and the other owners to document this and notify the state attorney general, Michigan does not have a condo department to enforce the laws. Joe P.S. You shouldn't mention company names on this or any forum. Its against the policy of this forum and it's just not a good idea given the litigiousness of our society.

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

ColleenM3
(Michigan)

Posts:2

05/09/2008 2:13 PM
Thanks for the information Joe, Your right, I wasn't thinking when I put the name of the builder on here, I will be more careful in the future.I really appreciate the help. I did write a letter to the MI Dept of Atty General Consumer Protection division and they called me to tell me that there was nothing they could do to help me. I don't have money for a lawer and my neighbors don't seem to care one way or another. What happens if nobody volunteers to be on the board when the builders leave? Does this mean we just wont have an association? My neighbors seem oblivious to the situation, many are seniors or young adults who are all just trying to make ends meet like I am. I really appreciate the leagal reference, I will have to look it up and see what I can do. Thanks again.

BrianB
(California)

Posts:1646

05/09/2008 3:06 PM
Posted By ColleenM3 on 05/09/2008 2:13 PM What happens if nobody volunteers to be on the board when the builders leave? Does this mean we just wont have an association? My neighbors seem oblivious to the situation, many are seniors or young adults who are all just trying to make ends meet like I am. it all depends on what the "association" owns. If you own common areas, roads, retention basins, etc., then all the owners of record will be held responsible for their upkeep. when you signed your contract to buy the home, you agreed to that. So, if no one wants to do it, then eventually there will be lawsuits and lawyers, or the city or state will take over, and you will be specially assessed (taxed) to do what your HOA should be doing, only at a higher rate as the city will add expenses for the operation of the program.

JosephW
(Michigan)

Posts:735

05/09/2008 4:32 PM
Colleen, I'm guessing that when you wrote the Attorney General's office, you used basically the same information you used here - that the developer was in violation of the documents. The AG can duck that, but try using that he is in violation of state law, which your documents are taken from. Go to the Michigan page on the site from the reference and print off the condo law. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

MaryA1
(Arizona)

Posts:1888

05/10/2008 7:59 AM
Colleen, In AZ the developer must submit a public report which is required by the Real Estate department. The report may not contain the requirement for turnover to the members, but it does cover all aspects of the development. Therefore, if this were to happen to an assn in AZ I would suggest contacting the R.E. Depart. If developers are bound by any regs. in MI, I would suggest you contact that dept. There must be some state dept. that regulates or oversees developers. In most instances the AG is of no help regarding HOA problems! This is not a consumer issue, per se.

GlenL
(Ohio)

Posts:1301

05/10/2008 11:12 AM
The AG in Ohio has the power to act on this type of complaint for condo communities but not single family HOA's. 5311.27 (C)(1) If the attorney general has reason to believe that substantial numbers of persons are affected and substantial harm is occurring or is about to occur to those persons or that the case is otherwise of substantial public interest, the attorney general may do either of the following: (a) Bring an action to obtain a declaratory judgment that an act or practice of a developer violates section 5311.25 or 5311.26 of the Revised Code or the condominium instruments, or to enjoin a developer who is violating or threatening to violate those sections or instruments; (b) Bring a class action for damages on behalf of persons injured by a developer’s violation of section 5311.25 or 5311.26 of the Revised Code or of the condominium instruments.

PaulM
(Pennsylvania)

Posts:1347

05/11/2008 5:46 AM
ColleenM3: If the developer's total lack of adherence to official documents is as you state, this is a sad state of affairs for the association and strong action on the assn's part is in order. Rally other like-minded condo purchasers (not renters), determine who will offer their time and ability to be board members. Cite portion of the official documents (condo and state law) whereby board members are to be elected, although it is not clear whether a percentage of b-members are to be appointed from assn. members or of the 'developer's persuasion'. Write a letter with this information, also state no financial reports have been communicated, Mail it 'certified' and request a response by a certain date. If no action on the developer's part, go to Michigan officials and let them take it from there.

JosephW
(Michigan)

Posts:735

05/12/2008 6:07 PM
For future reference, when the Michigan Condo Act was adopted in 1978, a department was created to enforce the provisions of the law. Three years later its was closed for budgetary reasons and has never been resurrected. There is no department that oversees developers. The Real Estate division only deals with real estate agents; there is not HOA/POA law - they are barely covered under the ancient Land Sales Act. Enforcement is basically handled through the courts. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

SusanW1
(Michigan)

Posts:1804

05/13/2008 2:37 PM
What about something as basic as not fulfilling a contract? Or in violation of contract agreement? you are going to have to get a lawyer, but be sure it's a real estate lawyer (not a divorce lawyer)

EllenS1
(Florida)

Posts:328

05/13/2008 3:06 PM
I don't know if this will help but it won't hurt. Send a concise letter to your State rep explaining the situation. Of course, if you had the backing of others that would help. If you rep is up for election I'm sure you will at least get some help. Also contacting your local builders association might result in some action.

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