HomeOwner Dues

Started by NicoleS • 4 replies • 1848 views

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NicoleS (North Carolina)
Posts: 2

Posted:

I am a new home homeowner and board member in a townhome community. Our Association is in total chaos. The builder who also happens to be the present management company has informed us that all units have been sold and they are ready to turn over the unit to the HOA. We have also been informed that our current operating budget is $0.00 with no explanation or paperwork ( bank statements, bills, financial records etc) as to how this money was spent. There are two board members who have been here since 2002 an state they have never seen any financial records. The only explanation we have is that there is a huge number of residents who are delinquent in home owner's dues. Members have requested these records from the builders, but he has yet to turn over these documents. With limited finacial resources, we are at a loss as to how to proceed. The builder's only resolve for this situation is legal action be taken on delinquent homeowners. What should we as an homeowner's association do in this situation. Please help!

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

NicoleS,

First, the board should not feel threatened in the least by the the builder's intimidation or threats of a lawsuit. If anything it's the builder's fault if there is zero in the account. Did the builder make any claims that the homeowner's did not pay their maintenance fees? Or is this just an assumption.

Second, don't accept anything without an attorney. Even though you will probably see some posts questioning the value of an attorney, yada, yada, any representation, the builder will know you mean business. Don't forgo an attorney under the excuse the board has no money, because it will cost you in the end.

Third, who did you mail your monthly maintenance dues to?

Fourth, it's time for the two board members who have been on since 2002, to go. They were asleep at the wheel for 4 years, it's unforgivable that there is nothing in your operating budget.

GeraldT1
NNJ

HenryR (Florida)
Posts: 1

Posted:

First, where your requests to the developer in writing? If so, and he has not produced the records then I would file a complaint with the State, DBPR. They are required by law to create and pass a budget on an annual basis.

JosephW (Michigan)
Posts: 882

Posted:

First, find a local attorney knowledgable in HOA law (not just real estate law). Tell him or her your problems and ask how to go about retaining their services when you are not yet in control of the association. Chances are they will tell you what you will need to do in hopes of getting the legal work when you control the association (hopefully). What you are trying to do is get the developer to hold the annual (transition) meeting or finding a way to have them removed if you get no response. It may take a court order that allows the association to hold the meeting without the developer(as the current board of directors) even being present. The court may appoint a temporary receiver to run the association in place of the board and to hold the annual meeting.

For more information on transition, click on the "Community Associations Network" link to the right and then select "Developer/Transition" from the main menu. There are 4 good articles that I would print off from there:

Best Practices: Transition

Community Asssociation Transition Checklist

Developer Transition: It Takes a Plan

Starting Strong

One other thing, after you've done a financial audit, I hope you will send the developer a bill for all of the unaccounted for funds they collected as the board of directors. If they don't turn over any records, I would send them a bill for the entire amount they collected. That sum would be worth taking them to court. Your attorney will provide the legal advice necessary for this course of action.

Joe

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JoelM (Ohio)
Posts: 10

Posted:

As Mr. West indicates, this is the time to retain a community association attorney in your area. A good firm specializing in this niche should know exactly how to turn the chaos into order very quickly and should be able to put together a budget that is reasonable for the association. Go to www.caionline.org and go to "Find a Chapter." Go to the service providers/vendors section of the website and call a few attorneys, or ask to be able to interview them and obtain an idea of how they would approach this for you and what the budget would be to reach those goals. Since you are a "board" member, you should be authorized to hire counsel to be able to comply with your due diligence. Unfortunately, as with many developers, they probably did not keep the assoiation books separate and probably did not run the board as a separate entity. I know it seems overwhelming, but take it step by step. Also, check out the CAI website for resources on how to properly and efficiently run the board.

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