Newly elected HOA president handling change over from developer

Started by TravisJ • 9 replies • 2057 views

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TravisJ (Utah)
Posts: 6

Posted:

I'm a newly elected HOA president with no experience in HOA management. This lack of experience is in addition to the fact that I'm going to be the first president of our HOA and will be handling the change over from the developer. We (the board) are looking into a property manager, however, I have alot of questions as to what should be done in completing the transition from the developer. Anyone with any advice on my first priorities etc. would be greatly appeciated. (Our HOA is located in South Jordan UT. It is a gated community compromised of 114 single home dwellings. We have no clubhouse or pool but a rather large park in the center of the community. Our current CC&R's state that the HOA's responsibilities only include maintenance of the common area, streets, street lighting, gates, and front/rear yard care of the homes. The homes themselves are the responsiblity of the homeowners. The HOA will carry no insurance on the homes or be responsible for any maintenance of the homes, however, the CC&R's are very detailed in what is expected of the homeowners regarding maintenance and appearance of their homes.)

RogerB (Colorado)
Posts: 5,067

Posted:

TravisJ, I suggest you hire an attorney or possibly a management company who is highly experienced in transitioning from the developer. Get an audit, good insurance, and a good managing agent.

Roger

LuciusD
Posts: 139

Posted:

I would cetainly agree with Roger's recommendations with emphasis on the attorney experienced in community association law. But I would add something else -- EDUCATION.
If you are not already a member, join CAI (Community Associations Institute), (http://www.caionline.org/), get their bookstore catalog, check out all of their seminars and courses. Check out all their members-only resources. Try to get all board members interested in learning. Consider orientation classes for all owners in what common interest communities are all about.
Something else: Scrutinize your governing documents very carefully. Did the developer miss something in creating the documents? Did he saddle you with something really burdensome? Are the documents working for the community; or vice versa. Fix problems up front. Don't complain about them for 20 years. It may be easier to get the developer to amend documents before you take over than after. -- Lou Day

RogerB (Colorado)
Posts: 5,067

Posted:

TravisJ, here is a check list for transition from developer to homeowners which may be of help.

1) A roster of the owners (and mortgagees), include addresses and telephone numbers
2) Control of Association's funds
3) Financial Records of Association with an accounting of association funds and financial statements from the date the association commenced receiving funds and ending on the date on which the Declarant control period ends, i.e., transition audit.
4) All of the tangible personal property of the owners and the Association held or controlled by the Declarant, such as deeds to Common Elements
5) Certificates of occupancy and permits issued for Common Element improvements
6) Plans and specifications used in the construction of the improvements in the Common Element
7) Original or certified copy of the recorded Declaration, as amended and/or supplemented, Articles of Incorporation, Plat Map, Bylaws, Rules and Regulations (if any), and Minutes Book
8) Copies of all insurance policies currently in effect
9) Employment contracts and service contracts in which the Association is the contracting party
10) All warranties of contractors, subcontractors, suppliers and manufacturers that are still in effect
11) Corporate seal
12) Non Profit Certificate from the Secretary of State of Colorado
13) Documents to support any special meetings of the association held
14) Resignation letters from the Declarant's Officers and members of the Executive Board
15) Signature cards for all association bank accounts and any appropriate banking resolutions
16) Current and historical budgets operating and reserve budgets
17) Federal and State Tax ID numbers
18) Federal and State tax filings for prior years
19) Evidence of compliance with Fair Housing Act accessibility requirements
20) Addresses for changing billing for services rendered to the Association (trash, utilities, contractors)

TravisJ (Utah)
Posts: 6

Posted:

Thanks for the input, especially about CAI. I will definitely look into what they have to offer. You mentioned that I should look very carefully at the documents. I assume you mean the CC&R's. Is there something I should be looking for that someone of my limited experience may overlook or not see as a problem? For example, I have stated that the HOA is only responsible for streets, street lighting, common area maintenance, gates, and yard care for each home (as per the CC&R's as I read them). However, I have had a resident complain to me that his basement is flooding, I informed him that was between the developer and himself but he feels that if the developer wouldn't remedy the problem, he wants the HOA to correct it. Is there something I should look for in the CC&Rs that may give him a case? I realize a lawyer is the best source for this kind of advice but if you have any input (or anyone else) please post. Thank you!!

RogerB (Colorado)
Posts: 5,067

Posted:

TravisJ, exactly the reason I recommended a good managing Agent is because even with careful reading of your controlling documents there there can be things someone with limited experience may overlook or not see as a problem. I suggest the owner whose basement is flooding needs to resolve this with the developer. If several owners have problems with the developer then the association may chose to intervine.

Roger

TravisJ (Utah)
Posts: 6

Posted:

Thanks for the list!! It will definitely give me a starting point. This forum has been very helpful, what a wonderful assest to have as a HOA member. Thanks!!

LuciusD
Posts: 139

Posted:

Travis, I don't mean just the CCR's. The ByLaws are almost as important. As well as any rules and guidelines that may exist. In my experience, the ByLaws prescribe the powers and responsibilities of the board and what is reserved to the members. These are important distinctions.
Clearly, the member with the flooded basement needs to read the documents.
However, if the flooding is due to problems with a defective underground drain system, maybe he HOA does have some responsibility.

RickK (Ohio)
Posts: 1

Posted:

Travis,
We just went through a similar experience. 98 cluster homes in Ohio. All of the advise given is excellent. But there's one more thing that you MUST do - COMMUNICATE WITH RESIDENTS.

The Board took over from the builder in June. We have published five four page newsletters mailed to residents since takeover. We have formed Committees, contracted with landscape and snowplowing providers, straightened out a stagnant lake, renegotiated the insurance policy, established a budget and changed management companies. Through all of this, every resident was informed via a monthly detailed newsletter of the progress we made.

I was surprised to learn that many Boards do not take these steps to communicate with residents. Our management company couldn't believe we were publishing so many newsletters - one reason they are no longer our management company.

You can never tell people too much - nothing confidential or inflamatory of course - but as long as people know and understand what's going on, especially at the beginning, they tend to support and assist the board rather than find fault and cause problems.

With all you have to do, you may not feel that you have time to produce a newsletter.

Above all else, it's the one thing you must do!!!

MaureenM1 (PA)
Posts: 344

Posted:

our development is also in transition. Question...there were township trucks on our property today and they said that there is a sewer leak that they have known about for quite awhile in the last building that was constructed. My question...who is responsible to the repair and the road if it needs to be dug up? Developer? Builder? or the Association? Again, the development has not be turned over to us yet but the Township has returned the builder's security to him a few weeks ago. We are a private gated community.

thanks for any advice.

Our Development is in PA.

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