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MaryJane
(Kentucky)

Posts:1

08/19/2005 7:54 PM
Hi, As a resident in a large Kentucky city, I am currently working with a transition team to brainstorm and identify areas that our newly elected board will have to address when they take over the running of the Incorporated Homeowners Association from the developer/builder. We have reached the percentage of home closures that requires that a 5 member board be elected by the homeowners. For the last 4 years the developer/builder has been running the association. As you can imagine we as homeowners are not aware of the amount of monies collected nor the exact expenses that have been incurred nor the amount of any capital reserve that has been set up. We are aware that we need to hire an attorney and have a title search of the property before we fully take over and to make sure that the common properties have no liens against them. I guess we should also have an audit of the books. We have 118 patio homes, an in-ground pool and a clubhouse. I welcome any ideas as to specifics areas we should address during this transition process.Thanks, MJ

StevenB
(Pennsylvania)

Posts:7

08/30/2005 8:28 AM
Just went through the same process. You should hire an association management company to help. You'll need an audit and on-going accounting support. All service contracts need to be reviewed. A transition study should be conducted as well as a reserve study for future costs to be incurred. Someone needs to get in touch with your township and/or county and coordinate various issues like roads and sewers. The builder needs to post a bond for repairs. This is just a partial list, there's lots of work to do!

CarolB
(Arizona)

Posts:9

12/06/2005 7:42 AM
I served as chairperson on our transition committee and developed an extensive checklist of items the committee should review before having their first election. In addition to an audit of the funds, you should do a visual inspection of the community and document any defects/problems with the common areas, construction, etc. and present it to the builder for repair, etc. If you'd like a copy of the checklist, I can email it to you, please contact me at carol.black@wellsfargo.com

JoeF
(Colorado)

Posts:4

12/06/2005 6:23 PM
Don't rely too heavily on the management company, which was probably hired by the developer. Many times, this is a conflict of interest, especially if there are problems. Your state's law probably spells out exactly what is supposed to happen and when. Read the law carefully, and remember, it is the fiduciary responsibility of the BOARD to make sure the law is followed. Many times, an attorney is needed, and bad developers need to brought into court. Hopefully, this is not the case for you, but BE PREPARED. Also, an INDEPENDENT AUDIT should be conducted. By independent, I mean by a CPA who was not hired by or who has not worked for, the developer. It is sometimes very difficult, but it is up to the board to see that these things are done. And, if the developer does not choose to follow the governing documents, remind him that he was one who had them drafted. Also, remind him that he was fully aware of your state's laws prior to incorporating.

EGoldmann
(Florida)

Posts:1

12/11/2005 9:01 AM
I recently purchased a condo conversion. A few of us are currently looking to take over the home owners association and get the developers out. We have requested the by-laws and restrictions from the developer and should receive them tomorrow (12/12/05). Once we read over the by-laws and restrictions, how should we go about to take over the association. A lot of unit owners do not live here and rent the units out. Any help would be greatly appreciated. My email is egoldmann321@aol.com. Thanks

RogerB
(Colorado)

Posts:3725

12/11/2005 5:01 PM
Good start EGoldman. And once you read your Bylaws and Declaration of CC&Rs you can determine if you have the votes to take over or to elect a owner majority to the Board of Directors. If you do, then try for a friendly takeover by talking to the Developer. Otherwise you would have to remove the Developer's Board members and replace them with owners. I have discussed that process in another post. During the transition I would have an experienced attorney or manager involved and would request an audit (not just a financial review, a comparison of source documents to financial reports, which many HOAs consider to be an audit). Roger

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

TerryL
(California)

Posts:23

12/12/2005 1:47 PM
The by-laws were no doubt written by the developer. The problem my HOA has recenetly discovered is that ambiguous language was deliberately written into the by-laws making it impossible to get rid of an undesirable board member. Obviously, this was done to protect the developer's board members from being ousted by homeowners. Unfortunately, our HOA has never re-written the by-laws, and it has caused us a big problem in the recent past. My suggestion is to have a good HOA attorney go over the by-laws and suggest the appropriate changes you need.

RogerB
(Colorado)

Posts:3725

12/12/2005 5:12 PM
TerryL, here is an example Bylaw for removing a Board member. Replacement of a Board Member. The Unit Owners, by a two-thirds (2/3) vote of all Members present in person or by proxy and entitled to vote at a duly called meeting of the Unit Owners at which a quorum is present, may remove any member of the Board with or without cause. In the event of death, resignation or removal of a director, his or her successor may be elected by receiving a majority vote by the members present who shall vote by secret ballot. The Board member elected shall serve for the unexpired term of the director being replaced. duly called means that the notice of the meeting advises that there will be consideration to remove a director. Roger

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

LisaS
(Illinois)

Posts:339

12/18/2005 10:31 AM
I agree that if you are unsure of how to proceed, that you should hire and attroney to review your recrods and someone to audit the accounts. However, in many cases per the Declaration documents ( I am in Illinois), a developer Board has the same rights and responsibilites as a homeowner Board. They also bear the same protections of law as a Board. Consequently, reviewing accounts and contracts is a must to ensure the proper plan of action for moving forward as a homeowners Board. But unless actions were blatantly illegal in any aspect, they cannot be acted on (i.e. money spent, contracts lacking in some manner, maintenance not performed) As well, if you have a Board that is willing and able, review what is required to actually run your Association. Weigh the cost benefit of a management company. Our Board members are diverse in profession (Realtor, Maintenance Manager, technology manager, and recently we added an Attorney). We did our research, consulted with other HOA's, and got estimates from management Companies. We decided we could handle it ourselves (I perosnally handle ALL of our 300 accounts. We only have 2 unpaid accounts and I filed property liens on them. It troubles me that so many HOAs think they 'need' a management company and pay too much for the privelege. Knowledge is power. Even if you hire a mangement company, you need to be educated to be effective.

MonaJ
(Florida)

Posts:9

04/26/2006 6:24 AM
I have tried emailing you for a copy of your checklist, but your email address doesn't seem to be a good one??? If you don't mind sharing the list, my email is djones6017@cfl.rr.com

TimB1
(Arizona)

Posts:4

05/03/2006 1:51 PM
Carol, Can you post a copy of the checklist? I sent a direct e-mail but it was rejected.

PattyM
(Georgia)

Posts:1

06/04/2006 5:45 PM
Carol: Please mail me a copy of your checklist. Thanks, Patty Martin EMAIL: dougmartin8@cox.net

GeraldT1

Posts:0

06/06/2006 6:55 AM
Budgets and reserves should have been made available to all residents on an annual bais in the previous 4 years. There should already be an association management company, sounds like someone isn't doing their job. There should be a maintenance bond posted with your borough/municipality, however a large portion of what's called a performance bond (that is initially posted prior to construction) has most likely been reimbursed to the developer as the construction is complete. Look into your state laws regarding municpal service reimbursement that many boroughs/municipalities are obligated to reimburse your HOA for street lighting, snow removal from the roadways, and electric. These are services that the other town residents receive from the town, they pay for them in taxes. Many qualified private communities throught the country recieve reimbursement, there are laws on the books that are very clear. Hire an attorney immediately.

AndreaW
(North Carolina)

Posts:57

06/06/2006 7:12 AM
Carol, Please also email me a copy of the checklist to jlasw20@aol.com Thanks, AndreaW.

CharlieT
(Texas)

Posts:12

06/18/2006 9:31 AM
Please e-mail me the check list on transition. ctiano@bellsouth.net

MistiH
(Texas)

Posts:52

06/21/2006 11:33 AM
Posted By JoeF on 12/06/2005 6:23 PM Don't rely too heavily on the management company, which was probably hired by the developer. Many times, this is a conflict of interest, especially if there are problems. Your state's law probably spells out exactly what is supposed to happen and when. Read the law carefully, and remember, it is the fiduciary responsibility of the BOARD to make sure the law is followed. Many times, an attorney is needed, and bad developers need to brought into court. Hopefully, this is not the case for you, but BE PREPARED. Also, an INDEPENDENT AUDIT should be conducted. By independent, I mean by a CPA who was not hired by or who has not worked for, the developer. It is sometimes very difficult, but it is up to the board to see that these things are done. And, if the developer does not choose to follow the governing documents, remind him that he was one who had them drafted. Also, remind him that he was fully aware of your state's laws prior to incorporating. CarolB: My HOA will flip to owners this fall, perhaps next spring. I would really appreciate a copy of your check list. Will you please email me? Thanks so much.

Loving Life in Texas! Misti

MistiH
(Texas)

Posts:52

06/21/2006 11:37 AM
Carol, sorry forgot my email address! mhowell@cebridge.net Your check list would be so appreciated! ~Misti

Loving Life in Texas! Misti

BruceP
(Virginia)

Posts:4

06/22/2006 11:04 AM
With all these requests, has anyone actually received the checklist from Carol? I'm in a community that is working towards transition, slowly if it'sup to the developer, and would appreciate any information on transition I can find. Bruce Parker Dumfries, VA

RogerB
(Colorado)

Posts:3725

06/22/2006 12:10 PM
hoatalk Posts:107 Posted:02/26/2006 12:34 PM PS - RogerB, one of our professional partners, posted a great checklist for developer transition in the topic named: "Newly elected HOA president handling change over from developer" Just search for: Newly elected HOA president

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

MistiH
(Texas)

Posts:52

06/22/2006 7:34 PM
I have not received the requested list from Carol. However, I did "search" and found a great list previously posted. Thanks RogerB! Misti

Loving Life in Texas! Misti

MaryT1
(Georgia)

Posts:7

08/13/2006 7:52 AM
Carol can you send me a copy of the checklist at jazjor2@aol.com Thanks so much.

RogerB
(Colorado)

Posts:3725

08/13/2006 9:11 AM
The most critical time in the life of many HOAs will be the transition from Developer control to Homeowners control. Numerous questions and posts have been made about this transition. I have discussed a transition audit which includes a financial audit and a physical audit. First, I would recommend contracting for an experienced Managing Agent several months prior to the transition. An Agent who can employ a good a HOA attorney as needed. A good CPA is definitely needed to do a thorough financial audit and a good Engineer is needed to do a phyical audit which includes drainage and contruction of homes, roads, pool, club house, fences, irrigation, monuments/signage, etc. The Agent needs to be competent in co-ordinating and monitoring all of these professional's activities as well as co-ordinating with the Developer. The Agent needs to be able to work with and get the Developer to correct all problems uncovered - there usually are several. The Agent should get and review items listed on the transition check list previously provided. The Agent should also review the Developer's commitments which were approved by a Planning Commission Agency to assure every commitment has been completed. If not, the Agent should get the Developer to complete these or else agree to do so in writing and post a bond which would assure completion. I WOULD NOT TRANSITION WITHOUT PROFESSIONAL HELP. To those who say "We can not afford professional help" I say, "You can not afford not to". And yes, I realize what some of you are thinking - it can be a 'catch 22'.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

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