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Subject: In Dire Need
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Author Messages
CarlaP
(South Carolina)

Posts:2


07/19/2006 7:26 AM  
Hello All-I am a newbie needing lots of guidance and information. I am currently the President of a HOA (LOL) which has not been released by the Developer. I will give some background. I live in a golf community where the developer still collects the homeowner's dues and delivers no budget information, other than an entire budget regarding his golf course as well as the community. While he says he wishes to turn the community over to the homeowner's, he has yet to provide any breakdown of funds, nor establish any "common areas" in the community. There was a president some time ago, who tried to lead the charge of taking over the HOA by obtaining a quorum vote. At the time, there were not enough houses developed to establish that. He even went so far as to create by-laws, get estimates on upkeep, etc. The by-laws were never passed.

I need some guidance if anyone is willing to take the time to help me.

Any information is appreciated.

Thanks
CarlaP
RogerB
(Colorado)

Posts:5067


07/19/2006 9:20 AM  
Carla, you did not say which state you live in. Check your Declaration to determine what common areas you have. Check with the Developer to determine if By-laws were adopted to establish the HOA. If not coordinate with the Developer and set up a meeting to establish By-laws and try to get some homeowners on the Board of Directors. Incorporate the HOA and make records available to all members.

Require a turnover audit prior to accepting control of the HOA from the Developer. Search this site for items needed prior to taking over control.
CarlaP
(South Carolina)

Posts:2


07/19/2006 4:21 PM  
Roger-Thanks for your reply. I'm sorry to be so uninformed about the issue-but am not sure what Declaration you speak of. I have not found anywhere where the Developer has labeled the common areas. Of course, he thinks the club house which houses the golf shop should be considered common. It states in our covenants that the HOA is to be established and incorporated; however, there is no record of it in previous documents. I do have 4 other members on the board who are homeowners. Also, the developer has stated that he has not filed tax returns regarding the HOA. Could this mean that there is no incorporation or tax id#? Thanks for your help.
RogerB
(Colorado)

Posts:5067


07/19/2006 6:26 PM  
Carla, the Declaration of Covenants, Conditions, and Restrictions is referred to as the Declaration, or the Covenants, or the CC&Rs. A copy is supposed to be filed in the County(s) in which the development resides by the Developer. You should have received a copy from the title company along with all the documents you received when you closed. It should define exactly what is common area.

Taxes should have been filed every year by the Board of Directors. The tax id# is obtained from the IRS.

If your HOA has a name you can go to your Secretary of State's web site and type in the name of your HOA. If it is present you are incorporated and can download a copy of the Articles of Incorporation.
ValerieS
(Georgia)

Posts:19


07/21/2006 4:21 AM  
Hi Carla,

I'm sure that requirements vary from state to state but I live in Georgia and we recently went through a similar experience. So I wanted to share some of what we learned.

A copy of the Declaration of Covenants was provided to each potential homeowner at the time that a contract was placed on a lot. As RogerB siad, it should be registered with your county. The Developer should be able to provide each of you with a copy as well. The Borad also needs a copy of the Plat (building plans for the entire community). You will need that.

Most Developers/Builders have a management company and landscaping company that they work with. If you do not have one, I'd like to suggest the Board of Directors to obtain an association management company. For a new community, it is a life saver and they have the experience to help walk you through this process.

How soon do you anticipate the Developer turning over control? As RogerB indicated, it is important that the Board walk the community and make a list of items that you want the Developer to do or correct (use the plat to identify common areas, etc). At our transition meeting, the Developer refused to correct items because they "met code" according to state guidelines. So, become aware of those items that the HOA will be responsible for and will have to be addressed immediately.

The Board should receive monthly financial reports such as Statement of Assets and Liabilities, Statement of Cash Receipts and Disbursements, Check Register for all accounts, and Statement of Debit Balances (which shows your delinquent accounts if you are required to pay assessment fees), etc.

I would also like to suggest that you contact Community Associations Institute (CAI). They can provide you and your Board with the basic tools needed for community association management. My first year on the Board and immediately after transition, I attended one of their local workshops. I would encourage you to contact them immediately for assistance. They provide information regarding establishing a community association, your governing documents (Declaration of Covenants, Conditions and Restrrictions, Articles of Incorporation, Bylaws, Rules and Regulations, Role of the Developer, Transferring Control to the owners, Role of Homeowners, Role of the Board and your fiduciary duties, information on forming committees and establishing officers, developing a budget, hiring a professional team such as an association management company, Methods of solving community problems, creating and enforcing restrictions and rules, etc. The number is 1-888-224-4321. They should also be able to connect you with a local CAI office.

I volunteered to serve on the Board in my community never ever intending to become so involved or to serve as president. It is a lot of work for a new community so be prepared for a full time job. It is very important that you have the help and support of your Board and that everyone is willing to work at making your community what you want it to be. It is equally if not more important, that your homeowners are involved and are actively participating.

I wish you luck!
~ Valerie
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