Developer/trustee Resigns

Started by DottieS • 10 replies • 1445 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

DottieS (Massachusetts)
Posts: 34

Posted:

Remember me???? The saga continues, We have an accountant, the developer /trustee is suppose to meet with them tomorrow, Refresh: Our books are a mess and reserve is gone , used up, Hit with assessements , Septic, Insurance for 08.

We were in the midst of hiring an attorney, for a turnover, when another problem came up , one of our owners noticed that the new structure the developer/trustee let the owner add on, is wrong sq footage and now they have to go back to the one who measured..We pay maintence by percents.....Thus the wait.

Well I thought all was going okay, the owners put in an e-mail all issues and concerns....than the e-mail, not signed, today , Resignation, Reason that he wanted to let the owners determine the new budget, now he still owns 2 units, so he is a developer/trustee/owner....He had given us a budget and needless to say we wanted a turnover and did not want to accept the budget with the books in disarray....thus we voted amonst ourselfs to have an accountant...Everybody was happy including the developer/trustee/owner. The bad thing, most owners do not live there, this is 2cd home and he is resigning DEC 25.

Sound complicated????????? I am really confused...

The Document came by e-mail, unsigned, not certified...and does a holiday make a difference....DEC 25th...2007????

SusanW1 (Michigan)
Posts: 5,202

Posted:

I am confused --
Who is "he" and what did he resign from?

Do you have a Board?

The resignation has to be accepted by the membership before it is "official." if this is a Board positon.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

DottieS: Your post is not clear enough, nor your questions, for us to respond to you. How can a developer/builder resign? Are you referring to the transition/turnover the developer does when he 'hands over' the association (which has been under his control) to the membership?

Do you have official CC&Rs which dictate the governing of your association?

GloriaM (North Carolina)
Posts: 829

Posted:

Dottie:

Although your post is a little fuzzy and unclear from my understanding of your post; it sounds like you are at the 75% sold position where the Developer would turn the HOA over to the Owners. Is this assumption correct?

If yes, then this is the time for the Owners to call their first annual meeting to elect a board.

If this is not correct, please explain further so that we can clearly give you our thoughts on this matter.

DottieS (Massachusetts)
Posts: 34

Posted:

We had a septic problem that we felt was the developers problem because we thought it was preexsisting problem....well you helped us and we did go to the town, and they did have some violations and give us some information but they could not say that , the cause of our problems was that, but it stopped the assessment, it is not over yet.....than we had the problem of the Reserve being gone and books that were in disaray....well we now have an accountant that the developer/trustee has gone too and he is still working with them.

We the owners association is still working on charges to us that we deem not ours but developers cost. We found that Electric bills were not in our name but
a corp that we do not know of. It is a case of not good business practices, how this affects us on a turnover I don't know.

The budget presented was not correct because of bad bookkeeping ect...so that assessement stalled......and than the questions from owners, the going for the books, all of sudden, we get an e-mail that he is resigning.....

also he has on a formal paper that the first two owners to fill in will be recorded as trustee's .....Our docs say no less than 3 or no more than 5 trustees shall be elected......He said, if no one applies he will appoint two in 60 days, He resigns ........Wait........Dec 25, 2007. That is a holiday????

He is still going to the accountant.

Now something else has come up...the sq footage on the unit he let add on and now
I am wondering if all our percentages will change ...

I hope I cleared it up and I thought you would of remembered me, maybe I refreshed your memory.....

Can he resign as Trustee.....Why would he, when we are having a turnover?

He asked for the septic and budget assessment, we asked for a turnover, because
he did not have to do it until all his units sold, he has two left....

We are trying to iron out all our concerns on the budgets he has passed out and the charges to the association before we go to an attorney, we wanted a clean set of books and everything in order.....we elected 3 owners to work on the turnover for our concerns and issues....

DottieS (Massachusetts)
Posts: 34

Posted:

I'm sorry, I wil answer your questions in fewer words.

The developer is the Trustee along with his wife.

We do have condo documents , master deed ect....rules and reg..

Two times the developer called the owners to elect a board, they filled it but than they could not go through with it because of all the problems in the previous post.

I was on one of them , the last one, and we had a list of things for the developer/trustee to finish up and do, also there was a problem with the
addition that he had let happen (before I bought)with the sq footage, Lawyers
fees ect....it got very complicated, books not in order, accounts, He had
to clear up a lot and so we never heard anymore, meanwhile, two of the four
who served had other commitments so that left two and that was a year ago..

Now he has resigned with a formal resignation form given to him by his attorney.

and he is calling for two owers to fill in a form he sent and said, if more
applied he would give it to the first two, they receive. Our doc's call for no
less than 3 nor more than 5.

We were working on the turnover and he was communicating and working with the accountant, all of sudden , A resignation.....He said, they thought it was time
for the owners to take over, well that is what we were doing but his house was
not in order for us to do that, and still isn't....

I guess the question is, Can that be done????? What about dec 25th?

GloriaM (North Carolina)
Posts: 829

Posted:

Dottie:

From my understanding of your post the developer did request an election of the owners to take over the board. I further understand that the owners did run for the board but didn't go through with it because of the mess.

Transition is always messy, depending upon the developer some are not so messy and others are devestating. In 25 years I have taken many HOA's through transition and have see good ones and horror stories.

The first thing your HOA needs to do is elect a board no matter what you see. The Owners need to be in charge at this time. The wonderful thing is there is always hope at the end of the tunnel if you do things right.

I would then encourage you to get in touch with the City Engineer to see if they have released his construction bond yet. If they have not, I urge you to write a detailed letter of your problems throughout your HOA to the Engineer and plead with them NOT to release his bond until he has made right the wrongs.

If this accountant you are using is the deveolpers, I would discharge them and let the board hire their own independant CPA to review the books.

An MC can assist you through this difficult time. An expereienced MC can make transition smooth for the HOA.

Last but not least, some states have a transition process that the developer, city engineer and President of the HOA must walk through the property before transition takes place. NJ has one on the books which I wish every state would adopt a transition process for ALL developers to go through before any HOA adopts the bad things of the developer.

Contact your state to see if Mass. has such a process. Good luck.

DottieS (Massachusetts)
Posts: 34

Posted:

Thank you all for your comments and I know it is confusing as it is for me too.
I want things done yesterday and I am a communicator....

Thanks Gloria....Well we did it, we have a board of 4 waiting for the 5th to come forward, our docs read no less than 3 no more than 5 board members...so we are trying to get the 5th for the tie breaker.

I Hope this will not hurt us at the turnover, A board does not have to register until all is okay, We have a committee that we elected to do the turnover with the attorney, but they have not had one yet as the developer will not do the budget to give us money to get one...I hate to tell you we have little in the bank and he used the reserves...

We had an owner do a budget that would give us enough money from the Association fund but he has not used that budget....

How do you suggest we get money for an attorney....???? Should the new board Access...? Can they do that without registering , I don't think so....

What happens now , he wants us to sign that we accepted and have it signed by a notary......Can he register us and will it hurt at turnover......??

DonnaS (Tennessee)
Posts: 5,671

Posted:

Dottie,
I keep reading from you that the Developer used up almost all of the Reserve funds. Did he create and contribute to that fund and was there homeowner money in the fund? If your members put the money in there, then the Developer owes you the money, even if he spent it on items within the developement.

Do not let your Board sign off on any turnover until your Board has all of this straightened out. Get an attorney from a special assessment to the members. It will hurt to have to pay for this kind of abuse from him. Also please check with your County developement dept and see if he has a Bond on the project. The HOA will need to sign off on this Bond and it is probably a significant amount.

And I question his "resignation?" He can't resign. He is a developer and has to follow thru on his having been approved to set up this developement thru your County. He has obligations to his community that he has created. We call his type "sheisters" and basically, that is a rat.
And finally, read your Documents to see when he is to have turnover. It usually is a percent of being built out. Lots to tackle for you guys and it will be difficult but this is a good time for all of your members to get involved with each other. We wish you luck.

DottieS (Massachusetts)
Posts: 34

Posted:

Donna, He used up ALL The RESERVE we do not have any not one dime.....and He is a Developer and Trustee of our condo development.

We questioned charges made to our association and get all kinds of reasons.

He has two units owned by him left.

The docs tell when he leaves and it is not time, when all are sold or if before he can or latest 2011 if he still has units....but instead he resigned as everything was wrong and I guess too much for him, He had to ammend docs, His bookkeeping was so bad...he admitted that, he did not have our money in the right accounts, He just needed an accountant and now we have one, We asked for it.....

We have a comittee to go to the attorney, but no attorney, We have lots of issues and concerns including the septic we feel we should not be responsible for, but it will cost us a fortune for attorney fees so we are weighing what to do....

If your right the attorney might find that he had no business touching our reserve, but being in Ma, Chapter 183A, I think as I read it that he can touch it for bills, It does not seem right .

There are 4 of us signed on for the board waiting for a 5th, He says he is leaving on Dec 25th, That is a funny date isn't it....worrysome.

I am trying to remember everything you said but I think you answered my question, assess the membership even him , he has two units left?????

Also It will not hurt to have the board but just not sign off for a turnover.

Does having a board registered at the county deeds office make it a turnover???

I hate to sound dumb, but I never was involved in a turnover, I own a condo in Fla and a Condo up north..but they were established....

Thanks

GloriaM (North Carolina)
Posts: 829

Posted:

Dottie:

Transition from Developer to the HOA is not recorded in the County. At 75% sold or in your case the Developer esigned, the HOA in now in charge. I would suggest you consult with an MC in your area for professional advise on how they can assit you through this process.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here