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StaceyP1
(Tennessee)
Posts:5
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| 07/08/2008 6:25 AM |
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Hello all...quite an informative forum you have here.
Background: I live in a restricted neighborhood in Tennessee which began construction in 2004. The entire tract of land that the developer owns is huge however he's only developing small sections of the neighborhood each year. At present, there are approximately 150 homes. (The developer sells the lots to builders and then the builder sells the home) At the rate he's going, it's entirely possible that he will have control of our hoa for 10 years or more! Our bylaws state that, as long as he owns 1 lot in any section, he pretty much has total decision making authority over the hoa. We have only had 2 annual meetings since the hoa was formed (a violation of state law governing non-profits) and they were both quite contentious. We were allowed to nominate committee members at the first meeting but the developer nixed those nominations with the magical totalitarian veto language stated in the bylaws. For the record, I was nominated as a committee member.
I understand completely the reason for developer control when an hoa is formed but many in the neighborhood were unaware of the entire size of the project when they purchased their home. My question for this forum is....Has anyone else experienced an hoa that was controlled by the developer for such an extended period of time?
Judging by the size the entire tract of land he owns, I would say that this neighborhood is not even 1/3 completed! |
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BruceF1
(Connecticut)
Posts:696
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| 07/08/2008 7:08 AM |
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It is very difficult to give you a specific answer. I suppose there may be instances when developer control can go on for years, maybe even 10 years, 20, who knows?
Every homeowners association's governing documents are different, and state laws regarding real estate developments and homeowner's associations (or condominium associations, as the case may be) vary widely from state to state. Some states don't even have any laws, or very strict ones, regarding homeowner's associations. On the other hand, some do.
Anyway, I suggest that's where you should start. First, obtain your association's governing documents, Declaration, CCRs (or whatever they may be called), bylaws, and so forth, and read them thoroughly. Study them. Then try to obtain copies of your state laws covering real estate and real estate developments, homeowners associations, not-for-profit or nonprofit corporations (in case they apply) and study those.
Those documents may be difficult to read and to understand, but they should contain the answers to your question. If they don't, then maybe there is no answer. Maybe in your situation, it's possible for developer control to go on forever. It ultimately depends on what is permitted (or limited) by your state laws. |
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StaceyP1
(Tennessee)
Posts:5
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| 07/08/2008 7:53 AM |
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Thanks for your reply Bruce.
Since I do legal research for a living, I've studied this issue somewhat and can't really find any governing law or case law on this particular subject. The courts here give wide discretion to hoa's unless they act in an arbitrary, bad faith manner. I guess we'll just have to wait and see if the developer continues to deny any voting at all regarding decisions. That may be the threshhold issue for acting in bad faith towards the homeowners.
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DonnaS
(Tennessee)
Posts:2948
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| 07/08/2008 7:55 AM |
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Stacey,
Almost 4 years is not all that long for a Developer to keep control for a large developement, especially in this day and age of non selling and building. I have gone thru 2 such situations and in reality, don't be in such a rush. Right now the Developer is paying for things that the HOA will end up being responsible for soon.
You said that "at the rate he is going, it's entirely possible that he will have control of our HOA for 10 years. You have to believe that no Developer wants to be paying and having the headaches of all that is involved with a project for 10 years. He wants his money and then to be free of the responsibility alot sooner than 10 years.
And for those who were unaware of the total size of the project, shame on them for not asking or finding out what were the plans. As I said, don't wish total control too fast. Get a meeting called now that you have more able bodys and let the Developer know what your rights are according to your Charter. |
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MicheleD
(Kentucky)
Posts:1866
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| 07/08/2008 11:19 AM |
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Our HOA was developed in 9 separate sections, for a total of 300+ homes.
There is another development we are interested in that is going to have around 14 separate sections when it's done and something like 1500+ homes, over a much much larger footprint and abutting some protected wildlife reserve area.
At present, only 1 section of that larger one is done.
Conceivably, if we were to purchase in there tomorrow, it would indeed be upwards of 10 years before the entire development is built out enough to turn over to resident control.
The scenario you describe is probably very common in this part of the state, and I'm not at all surprised by it.
Our own development was turned over to the residents probably 3 years before it really needed to be. We got a bunch of homeowners together and presented our Developer with a plan that allowed us to basically "run" the HOA, while giving him architectural control over NEW building (we were granted Arch control over additions to built-out lots, such as fence, decks, etc).
It took us about 3 or 4 months of intense meetings (the homeowners) before we had something presentable and that the developer could buy into. He was more than happy to be rid of such things as assessment collections and violations.
Maybe try to work out a solid compromise approach that clearly spells out what the homeowners are willing to take on and what they are willing to leave in the hands of the developer. |
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