Developer Transition

Started by DavidL • 3 replies • 2657 views

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DavidL (Maryland)
Posts: 2

Posted:

I live in a small HOA near Baltimore Maryland. The Board of Directors has transitioned to a fully homeowner run Board of Directors. The transition was never documented. The developer just let his board position. I believe the BOD should and still needs to make this transition offical (by way of legal document)

The developer, however, still claims he still has architectural authority due to an agreement he and the board signed. I think such an agreement is illegal. Certainly the community never got to vote if they wanted the developer to continue being involved. The board now even suggests that the architectural review committee, chaired still by the "developer" (under the agreement) is separate and not part of the association. How can this be? How can one find out the legality of the developer having any legal claims or involement, once the board of homeowners is fully in charge?

RogerB (Colorado)
Posts: 5,067

Posted:

DavidL, not only should the transition be documented in writing and recorded in minutes but a transition audit should also be done. Previously I provided a check list of items to consider during a transition. When a director resigns do your bylaws require it to be done in writing? If not you may want to amend your bylaws to require this.

Regarding the developer still having architectural authority ask for a copy of the agreement and check your declaration - this may be legal. Sometimes Declarations are not clear about the ARC because the developer wants to maintain control; however the ARC is still part of the association.

If there is an agreement, what are the conditions? Often the Declaration restrict agreements to a term of 1 year. If so, any that are longer can be broken if they do not comply. The Board should have the power to make and terminate contracts and to appoint and remove committee members. Check your bylaws and if they do not provide this then amend the bylaws. When those amendments are in place any committee member can be terminated unless there is a valid contract.

Hope this helps,
RogerB

JohnM3 (Florida)
Posts: 288

Posted:

Whats new this is what developers do they drop and walk out the door. The city dont care, the state dont care and uncle sugar dont care welcome to theReal world. Be guaranteed somewhere someone representing the board made the agreement to get it over with developers get there way thats reality.
Now what do you do?
Simple make nice with the developer or be very smart hire a shark type lawyer it is gonna cost big time and go for the throat your choice.
I found out the night we had our first meeting and I got elected vp Le---- stood up dropped the books on the dias and said it yours and walked out.

3 years later I found out that 2 eachauxiliary board members had made a deal with the developer 1 became the other vp and the 2 became secretary and we have gone thru hell since then cause the docs are always designed to protect the developer in there entirety I dont care what lawyers tell you that is reality.
Your choice play nice or go for the throat. If you choose the later read your docs before you hire a lawyer I will bet it says members of the ACC have to be board members or that the Board can override the acc so if true stick it to the developer they probably deserve it.

My 2 cents worth on a very bad memory.

LisaS (Illinois)
Posts: 341

Posted:

Knowledge is power. You MUST read through all your Covenants, bylaws, etc in order to be clear on what is allowed, what is not, and why. Depending on your situation, you may also want to consult the applicable state laws regarding HOA's.

On our Board, I am the 'research' person. I spent many hours getting to know our Covenants, state laws, local ordinances, etc.

Our Developer has tried a number of things during and after turnover that we found 'inappropriate'. Once they realized that we were not clueless and did not just go along with whatever they wanted (we said no to a number of things, including their offer of 'Architectural review' duties), they were much nicer to us.

Also helped when we realized they bought two lots back from a builder here after the turnover. So...they need OUR approval to build on them. Can you say LEVERAGE?

Good Luck,
Lisa

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