DaveD (Florida)
Posts: 15
Posts: 15
Posted:
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.
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.