Need help!

I am the new president of a homeowners association in south carolina. This association is a mixture of lakefront properties, larger tracts for horse related homes, and simply larger tracts (5 acres) for simply building. This association has been a mess ever since the Developers relinquished their rights to the association. I have read and reread the covenants and amendments therein which were the original covenants for the Developers. At the point the Developers had sold more than 75% of the lots, they would turn their rights over to the new Homeowners Association.

They apparently sent all the homeowners a letter stating that they were terminating their interests in the Association on May 31, 2004 and would transfer their rights to the new Homeowners Association. Upon doing so, they apparently gave the Homeowners a new set of covenants. However, the homeowners rejected it.

I have been in real estate for 14 years and have dealt with Homeonwers Associations. However, I have never seen anything like this.

My questions are as follows:

1. When the Developers turned over their rights to the Association, and the Association did not adopt a new set of covenants, are the existing covenants still in effect even though they are specifically written for the protection of the Developers, OR, at that time, did the original covenants become null and void?

2. It is apparent that this Association does not have any By-Laws. So I wrote a set of By-Laws for review by the members at our May 6 meeting. It is my understanding that every Homeowners Association must have by-laws, covenants, and some type of recourse if a property owner violates any of the covenants. What would you suggest?

3. The original covenants had an Architectural Control Committee, which was the Deveopers. There is a debate that the Architectural Control Committee is an entity of itself and does not have to report to the Board. Naturally, in the original covenants, the ACC would report to themselves. However, now, this committee is under the assumption that this is the case.

The major question is are the original covenants still in effect or did they become null and void when they relinquished the rights to the Homeowners Association? This may be a legal question, but I just wondered if you have any suggestions or ideas as to what we do at this point. Thank you for your time, Mary Barrett

Mary, your original Declaration is still in effect if it was recorded with the County Cleck' office. PLUS any amendments made to the Declaration which are recorded would add to, delete from, or otherwise supplement the Declaration. If amendments were filed which totally change your Declaration it would have required a vote of all owners. So if this vote failed the filed amendment can probably be challenged as invalid if so desired. Your first step is to request copies of the Declaration and all Amendments to the Declaration from your County Clerk's office.

You need By-laws to setup organizational structure. Make sure to include any applicable state statutes including the right to a Hearing. I also recommend you at a minimum establish Rules and Regulation on 1)Enforcement of Covenants and Rules; and 2)Collection of Delinquent Assessments. I have posted examples of both which are used in Colorado.

The Developer often writes the Declaration in an ambiguous manner so that ACC can be a separate entity not controlled by the Board. I would either amend the Declaration or at the least pass a resolution to clarify that the ACC is under the supervision and control of the Board.

You didn't mention being incorporated, that is something else to consider if you are not incorporated.