AS4 (Massachusetts)
Posts: 13
Posts: 13
Posted:
IS IT STANDARD PROCEDURE TOR REQUIRE THE DEVELOPER TO PROVIDE A TRANSITION AUDIT COMPLETED BY PROFESSIONALS WHOM HE HAS NO RELATIONSHIP WITH,AT HIS EXPENSE, BEFORE THE HOA ASSUMES RESPONSIBILITY?
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HOA transition from developer control to homeowner control
Started by AS4 • 10 replies • 7731 views
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RobertR1 (South Carolina)
Posts: 5,164
Posts: 5,164
Posted:
AS4,
I doubt you will find there is much standard about your turnover papers. After all the developer wrote them. Is there a state law, I doubt that also but you may want to look up your state statutes.
Do the homeowners trying to assume control have any power? Absolutely.
Is the resolve among the homeowners strong enough to take action? You would know.
Comments: IF this turnover is taking place now, you are between a rock and a hard place. All of this should have been worked out between the Developer, managements co., and the transition board. If it has not you are going to have to play hard ball to get concessions from the developer and maybe the Management co. Your power over the developer is a reasonable discussion with him and ask for what you want. Hopefully, you can fire the management co. if they don't do what you say unless you are locked in and I would fight any contract not signed by new owners board. The developer can be reasonable, but, especially now, his bottom line looms large.
You may need a Good attorney. If you do go that route, don't accept any agreement without his say so. If you decide to duke it out......GET SUPPORT of everyone breathing among your owners. Show the developer you solidarity and don't be aafraid to make it a news event. You all also have to be reasonable, and ask for more than you think you can get and try to compromise. Is any agency going to bail you out, I doubt it, you will be lucky to get anyone to listen. However, if local cities are towns are involved directly, such as city limits, do not hesitate to pay them a call.
Your action plan may be to call town hall meeting, ask developer to attend, along with management co. Let everyone give their side and take it from there. I would definitely drawn a line at some time and say, well folks, do you want more or do you want to fight for more, it will be expensive and it will be a long battle and it might not be worth it. It may be to your advantage to capitulate just to get your own show on the road.
Good luck and get support.
I doubt you will find there is much standard about your turnover papers. After all the developer wrote them. Is there a state law, I doubt that also but you may want to look up your state statutes.
Do the homeowners trying to assume control have any power? Absolutely.
Is the resolve among the homeowners strong enough to take action? You would know.
Comments: IF this turnover is taking place now, you are between a rock and a hard place. All of this should have been worked out between the Developer, managements co., and the transition board. If it has not you are going to have to play hard ball to get concessions from the developer and maybe the Management co. Your power over the developer is a reasonable discussion with him and ask for what you want. Hopefully, you can fire the management co. if they don't do what you say unless you are locked in and I would fight any contract not signed by new owners board. The developer can be reasonable, but, especially now, his bottom line looms large.
You may need a Good attorney. If you do go that route, don't accept any agreement without his say so. If you decide to duke it out......GET SUPPORT of everyone breathing among your owners. Show the developer you solidarity and don't be aafraid to make it a news event. You all also have to be reasonable, and ask for more than you think you can get and try to compromise. Is any agency going to bail you out, I doubt it, you will be lucky to get anyone to listen. However, if local cities are towns are involved directly, such as city limits, do not hesitate to pay them a call.
Your action plan may be to call town hall meeting, ask developer to attend, along with management co. Let everyone give their side and take it from there. I would definitely drawn a line at some time and say, well folks, do you want more or do you want to fight for more, it will be expensive and it will be a long battle and it might not be worth it. It may be to your advantage to capitulate just to get your own show on the road.
Good luck and get support.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Quote:
Posted By AS4 on 10/01/2008 8:31 AM
IS IT STANDARD PROCEDURE TOR REQUIRE THE DEVELOPER TO PROVIDE A TRANSITION AUDIT COMPLETED BY PROFESSIONALS WHOM HE HAS NO RELATIONSHIP WITH,AT HIS EXPENSE, BEFORE THE HOA ASSUMES RESPONSIBILITY?
IS IT STANDARD PROCEDURE TOR REQUIRE THE DEVELOPER TO PROVIDE A TRANSITION AUDIT COMPLETED BY PROFESSIONALS WHOM HE HAS NO RELATIONSHIP WITH,AT HIS EXPENSE, BEFORE THE HOA ASSUMES RESPONSIBILITY?
AS4,
I don't know about "standard procedure" since most states do not address this in state HOA laws and most gov. docs. are silent also on what is required of the developer at transition. Here is some info I have on transition that might be helpful to you:
TRANSITION: The process whereby the developer turns control of the association over to the members.
Transition Checklist:
Investigation of condition/construction of common areas;
Reserve study;
Determine adequacy of assessments;
Copies of all pertinent Association documents;
Copies of all previous budgets and financial records;
Copies of all previous minutes;
Copies of all contracts for services;
Copies of all tax returns and corporate filings;
Title to common areas;
Landscape and construction drawings;
Inventory of personal property;
List of builders/subcontractors;
List of owners and mortgage companies;
Copies of insurance policies;
Review status of deed restriction enforcement; and
Transfer of control through Board members
Transition Study vs Reserve Study
Today, most homeowner associations and property managers are familiar with what a Reserve Study is and the crucial role it plays in the future of the association.
There also exists a study that is not as well known, but is decidedly just as important in shaping the repair and replacement schedule of an association, the Transition Study.
A Reserve Study is the physical and financial analysis of all common elements that the board is responsible
for maintaining. It details a repair and replacement schedule over the next thirty years.
A Transition Study is an independent analysis of the common elements to identify the estimated cost to remediate condition, construction and design defects. A Reserve Study determines remaining useful life due to
normal wear and tear and a Transition Study identifies only defects relating to condition, construction or design.
While a Reserve Study can be conducted at any time, a Transition Study should be done near the date of
turnover from the developer to the association board. It is important for new construction and recent conversion
properties to be aware of the benefits a Transition Study can provide.
Source: http://www.apra-usa.com/APRAAdvisorFebMar2008.pdf
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Attached is a letter DARCO provides.
📎 Attachments (1):
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📝11013488271.doc(27 KB)
GeraldT4
Posts: 1,022
Posts: 1,022
Posted:
AS4 - MaryA and RogerB have provided you great info. MaryA's checklist is spot on. It seems to me based upon your post that you have it backwards. The Developer is required to construct the elements of the association in accordance with a set of pre-approved architectural plans and according to building code. It's the ASSOCIATION that must contract/pay for audits and transition studies that MaryA refers to. NOT the Developer. The purpose of those studies is to test the Capital Reserves and to evidence construction defects so the Association can negotiate with the Developer for compensation, or for the Developer to contract to correct.
PaysonC (Texas)
Posts: 4
Posts: 4
Posted:
Our developer R.N. Peavey left us -$8500 in the hole, yes -$8500, We are still struggling to recover from this 3 years later. Management Co said our atty recommended not sending good $ after bad $. I still don't see how you can leave an HOA with a negative balance.
If it's possible I would make sure this is not going to happen to you, get an atty or whatever it takes.
If it's possible I would make sure this is not going to happen to you, get an atty or whatever it takes.
RobertR1 (South Carolina)
Posts: 5,164
Posts: 5,164
Posted:
PaysonC,
Do yourselve a favor and don't mention names. This name will probably be stricken by Web Master.
Try and stay away from assuming to much when you post. Your 8.5K might sound like a lot, but attorneys fees will be more. Also $8.5 to a 400 unit condo in Boca is nothing.
But, your point is well taken and you are on the money, and all owners should be aware of this. However, not the case, even those aware sometimes don't care. So folks like you have to be prepared to educate and aggregate all the owners at turnover and be prepared to fight the battle then, I say don't be timid, the developer wants to get rid of you as much as you want to be shed of him. Use anything legally and don't take no guff and be prepared to tell him so. You have nothing to lose, the developer may have his reputation on the line. Some are good guys and some just talk like good guys.
Do yourselve a favor and don't mention names. This name will probably be stricken by Web Master.
Try and stay away from assuming to much when you post. Your 8.5K might sound like a lot, but attorneys fees will be more. Also $8.5 to a 400 unit condo in Boca is nothing.
But, your point is well taken and you are on the money, and all owners should be aware of this. However, not the case, even those aware sometimes don't care. So folks like you have to be prepared to educate and aggregate all the owners at turnover and be prepared to fight the battle then, I say don't be timid, the developer wants to get rid of you as much as you want to be shed of him. Use anything legally and don't take no guff and be prepared to tell him so. You have nothing to lose, the developer may have his reputation on the line. Some are good guys and some just talk like good guys.
MaureenM1 (PA)
Posts: 344
Posts: 344
Posted:
our development is in transition. We had an independent engineering study which turned up over 40 deficiiences that the Developer/Builder are responsible for.
The Developer attended a recent township meeting and is asking our township in PA to return his security money. We also attended with our attorney and after the meeting the developer tried to make a settlement with us for our gates that he fabricated and do not meet code and have never worked. This was before we received the results of the engineering study.
Now that we have received the engineering study which shows significant deficiences regarding our retention pond, curbs, signs, etc. we have asked our attorney to contact the township attorney to see how to proceed.
We have asked the Township to put a hold on returning the security to the developer (which was an agenda item this past Monday). Our attorney was in contact with the Township attorney. We are in the process of finding out the results of this meeting as I was away this week and was unable to attend the meeting.
My questions are these: Can the Township return the security money to the developer after we have reported our deficiencies to them?
Also, the builder has many deficiences that do not meet code. Can the Board refuse to transition from him (Declarant) until these items are retified?
Our attorney is experienced in HOA law but does not show us the guidance that we need. There are not many to choose from and the best one in the area is our Builders attorney!!
Any advice on this would be appreciated.
The Developer attended a recent township meeting and is asking our township in PA to return his security money. We also attended with our attorney and after the meeting the developer tried to make a settlement with us for our gates that he fabricated and do not meet code and have never worked. This was before we received the results of the engineering study.
Now that we have received the engineering study which shows significant deficiences regarding our retention pond, curbs, signs, etc. we have asked our attorney to contact the township attorney to see how to proceed.
We have asked the Township to put a hold on returning the security to the developer (which was an agenda item this past Monday). Our attorney was in contact with the Township attorney. We are in the process of finding out the results of this meeting as I was away this week and was unable to attend the meeting.
My questions are these: Can the Township return the security money to the developer after we have reported our deficiencies to them?
Also, the builder has many deficiences that do not meet code. Can the Board refuse to transition from him (Declarant) until these items are retified?
Our attorney is experienced in HOA law but does not show us the guidance that we need. There are not many to choose from and the best one in the area is our Builders attorney!!
Any advice on this would be appreciated.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
The questions you are asking are legal ones. I am not qualified to offer you a legal opinion. I am not an attorney and I do not work within the legal profession. I strongly recommend that you run these suggestions by your attorney for a legal opinion.
I think that it would depend on the requirements the town has associated with the security money. That is to say, if the money was placed as collateral that the builder would do xyz and the town concurs that xyz was completed, the money would be returned.
The town is not the negotiator between you and the builder.
They just happen to be holding money that a court could order be turned over to the Association.
My suggestion is to initiate a law suit and submit a motion to the court that requires the town to hold onto the funds (or if the funds are released that they go into escrow) until the issue between the Association and the builder is resolved. Hopefully the court will agree to that simple request.
This way you will have leverage over the builder irregardless of what the town does.
Hope this helps,
Tim
I think that it would depend on the requirements the town has associated with the security money. That is to say, if the money was placed as collateral that the builder would do xyz and the town concurs that xyz was completed, the money would be returned.
The town is not the negotiator between you and the builder.
They just happen to be holding money that a court could order be turned over to the Association.
My suggestion is to initiate a law suit and submit a motion to the court that requires the town to hold onto the funds (or if the funds are released that they go into escrow) until the issue between the Association and the builder is resolved. Hopefully the court will agree to that simple request.
This way you will have leverage over the builder irregardless of what the town does.
Hope this helps,
Tim
ChrisR1 (Texas)
Posts: 1
Posts: 1
Posted:
Can anyone recommend a firm to have a transition study prepared? I've used Reserve Advisors in the past but would like to find a firm local to Austin, TX.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Chris,
I did a search for HOA Transition Study and got a few results for companies that do them in TX.
I did another search for HOA Transition Study companies in TX and got a few more.
There doesn't appear to be a lot of companies doing this. However, based on this
sample transition study report, I suspect that a good engineering firm can provide you with the same info.
From that report:
A transition study documents the physical condition of the common and limited common elements of a community interest development that is in the process of being transferred from developer / declarant to the “Unit Owners’ Association”, typically its board of directors. Its purpose is to make certain that the common elements meet the intent of the available design documents (commonly drawings and specifications) and to document any exceptions to those documents. These exceptions may then become
items for negotiation between the developer and the board of directors and may potentially form conditions upon which the board accepts transfer of the property held in common.
I did a search for HOA Transition Study and got a few results for companies that do them in TX.
I did another search for HOA Transition Study companies in TX and got a few more.
There doesn't appear to be a lot of companies doing this. However, based on this
sample transition study report, I suspect that a good engineering firm can provide you with the same info.
From that report:
A transition study documents the physical condition of the common and limited common elements of a community interest development that is in the process of being transferred from developer / declarant to the “Unit Owners’ Association”, typically its board of directors. Its purpose is to make certain that the common elements meet the intent of the available design documents (commonly drawings and specifications) and to document any exceptions to those documents. These exceptions may then become
items for negotiation between the developer and the board of directors and may potentially form conditions upon which the board accepts transfer of the property held in common.
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