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Subject: Stalled Building
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Author Messages
NancyM26
(Iowa)

Posts:1


07/07/2021 1:18 PM  
Our developer is not completing the condo plan, therefore maintaining control of the HOA, since units have not been sold (of course)
No HOA meetings held, no financial reports, no minutes, no written announcements of meetings.
We are calling an annual meeting, but receiving pushback. What are owner options?
DouglasK1
(Florida)

Posts:1631


07/07/2021 2:52 PM  
What do you plan to do at the meeting? If the developer is in control, they typically have more votes than the homeowners, so they can just install whoever they want as the board. In many associations (mine included), annual meetings aren't held until after turnover.

Escaped former treasurer and director of a self managed association.
AugustinD


Posts:961


07/07/2021 3:13 PM  
NancyM26,

-- Please quote what your COA's Bylaws say about the frequency of Board meetings.

-- Please quote everything that your COA's Bylaws say about meetings of the membership.

-- Chances are high that, if the Developer will not hold a meeting of the membership, and a meeting is required even when the Developer controls the HOA, you will have to hire an attorney to try to make it happen.

-- Iowa Condo Act requires that "The official records of the board of administration must be open to inspection and available for photocopying at
reasonable times and places." See and study https://www.legis.iowa.gov/docs/ico/chapter/499B.pdf

-- The Iowa Nonprofit Corporation Act states inter alia: "1. Subject to subsection 5, a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in section 504.1601, subsection 5, if the member gives the corporation written notice or a written demand at least five business days before the date on which the member wishes to inspect and copy." See and study https://www.legis.iowa.gov/docs/ico/chapter/504.pdf . Under this statute, you are entitled to see Minutes.

-- Go to the Iowa Secretary of State site. In the businesses section, search for your COA. Find the name of your COA's registered agent at this site.

-- Regarding Minutes: You should write a formal letter to the COA's registered agent, requesting records that the latter two statutes permit you to inspect. You should the relevant parts of these two statutes. The letter should be emotionless and 'just the facts.'

-- Overwhelmed yet? You should be. Consider hiring an attorney.

-- The less effort you make to follow these instructions, the more snarky others and I may get. (Well I know I will get snarky, anyway.)
JohnC46
(South Carolina)

Posts:11180


07/08/2021 10:45 AM  
Posted By NancyM26 on 07/07/2021 1:18 PM
Our developer is not completing the condo plan, therefore maintaining control of the HOA, since units have not been sold (of course)
No HOA meetings held, no financial reports, no minutes, no written announcements of meetings.
We are calling an annual meeting, but receiving pushback. What are owner options?



Nancy

Are you accusing them of not finishing so they can control the association?
CathyA3
(Ohio)

Posts:2154


07/08/2021 1:15 PM  
Posted By JohnC46 on 07/08/2021 10:45 AM
Posted By NancyM26 on 07/07/2021 1:18 PM
Our developer is not completing the condo plan, therefore maintaining control of the HOA, since units have not been sold (of course)
No HOA meetings held, no financial reports, no minutes, no written announcements of meetings.
We are calling an annual meeting, but receiving pushback. What are owner options?



Nancy

Are you accusing them of not finishing so they can control the association?



A developer who isn't selling homes isn't making money and is incurring carrying costs on top of it. Keeping control of an association won't pay the bills, so unless there is something really unusual going on a developer would have no incentive to hold things up.

What can homeowners do? Probably not much. They don't control the association. Depending on the number of units sold, there may not even be a homeowner on the board yet, so the developer IS the board.

Without seeing the governing documents, I have no idea if current owners can even call a meeting prior to turn over from the developer. You'd think they could, but I wouldn't swear to it. Of course they can meet among themselves, but that may or may not have any legal validity.

I second Augustin's recommendation about talking to a lawyer.

This situation sounds vaguely like ones that were common during the Great Recession. Developers and/or builders ran out of money, could not continue building, and communities were left with empty lots and no amenities. Usually the defunct businesses ended up selling their holdings to another developer - but it can takes years for the process to work its way through all of the legal and financial requirements. More to the point, owners of existing homes had little to no say in how things played out.
DavidG45
(Delaware)

Posts:92


07/13/2021 11:12 AM  
How long has it been since a unit has been sold? I assume somewhere in your documents it explains when the owners take ownership of the HOA. Sometimes the benchmarks will be either when "x" number of units have been sold, or until "x" amount of time passes without a unit being sold.
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