Turnover Process

Started by KarenP6 • 5 replies • 2594 views

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KarenP6 (Georgia)
Posts: 2

Posted:

Our community is 100% sold and the "Declarant" is refusing to turn it over to the HOA unless we sign a Supplementary Declarant document releasing him of all responsibility. The Board of Directors had legal counsel review the letter and was advised not to sign. We as individual homeowners are unable to afford the cost of legal fees. The Builder and the management company still have control of the community’s finances which is made up of a monthly HOA fee of $125.00 per unit. We have tried researching what our rights are as homeowners regarding turnover and have run into brick walls. Apparently the law is very gray in this area. I was told that in most cases the Builder/Declarant has all the rights. Does anyone have any idea of where to go for information on the law regarding HOA and the Declarant's responsibility to turn over once the community is 100% sold, as stated in the covenant? The subdivision is a 210 unit town home community located in Gwinnett County, Georgia.

Thanks

Bewildered & Frustrated in Gwinnett

JohnO6 (Georgia)
Posts: 424

Posted:

A little more detail will be helpful for responses from this forum. Typically the declarant "controls" the HOA during develop by his/her power to appoint the Board of Directors. But it sounds like you have a Board of Directors that already sought legal counsel. Who is on this Board? Is it really the Board or just a prelminary Advisory Committee?

Ordinarily the Declaration of Protective Covenants vests the control of the HOA in the Board of Directors who can dictate to the Property Management Company (if you have one) what to do with HOA funds.

As I said in the beginning, a little more detail will help us respond.

Finally, I would strongly encourage you to seek the counsel of a law firm that specializes in Community Association law. Typically they are much more knowledgable in these matters than the general law firm.

If you need a list of law firms that do so in Atlanta, I can provide via private email.

I'm on the Board of an HOA in suburban Atlanta as well

KarenP6 (Georgia)
Posts: 2

Posted:

Thank you for your response and your offer to assist with law firms. The law firm that reviewed the document specifically handles Community Association Law. There is a Management Company in place. The Management Company informed us to hold an election and to form a Board of Directors. All homeowners were informed of the election and it was held in accordance with the covenant and bylaws. From this election nine board members were elected myself included. From that BOD we then elected officers whereby I was elected as the interim President. The MC stated that it was necessary to elect officers as the President and Secretary were to sign the turnover documents. One turnover document being this "Supplementary Declarant” which legal counsel has advised against signing. We only asked legal counsel to review the document and at this point we do not have legal counsel on retainer since the BOD presently does not have the means to pay for legal counsel since the MC and the declarant are still in control. The covenant states that the declarant is to relinquish its membership and rights as the sole member once all of the lots have been conveyed to owners. All lots were conveyed back in April. What recourse do the homeowners have in this case?

KirkW1 (Texas)
Posts: 1,665

Posted:

I would start with a call to the Attorney General's Office. They may (or may not) be interested in helping you.

Who actually controls the accounts at the bank? It could well be that the management company hold the signatory power on your behalf. If they do, and they recognize your legitimacy then things may get easier. Then you have access to the unds to pay for legal counsel.

If you don't have access to the funds (or even if you do), see if your attorney will take your case without an upfront payment. Not that a suit is the best way to start tenure as a BOD, but if it is needed that is the breaks. Short of this, pass a resolution that you will repay those fronting the fees with whatever assessment is needed after a lawsuit settles. Then get people to volunteer to help out. Understand that if enough people pitch in the cost won't be as bad.

But start by looking to get a government lawyer on the case. It would seem that this is a consumer protection issue.

CassandraJ4 (Georgia)
Posts: 1

Posted:

Talk to Cassandra John of HOA Business Services to contact her [email protected]

MicheleD (Kentucky)
Posts: 4,491

Posted:

Cassandra:

This thread is over a year old.
About a year and a half old to be exact.

The original poster is probably long gone . . .

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