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Subject: Who as dealt with a CDD?
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ArtB1
(Florida)

Posts:37


08/19/2021 1:18 PM  
It would take pages and pages to outline our issues but in a nutshell......

We are a single family home HOA that was just turned over about 2 years ago.

The area was developed under a CDD for water and infrastructure. We have multiple ponds.

Title of the ponds was transferred from the developer to the HOA just before turnover. Acceptance was made by a developer employee who was acting as HOA President. Turnover was conditional on an inspection that seemingly never occurred.

We now have drainage and culvert issues along the shores of the ponds.

The CDD says not our problem. They claim they are only responsible for the pumps.

We have found out that the ponds were out of compliance at the time of turnover as no inspections, as required by law, were completed since 2012.

The developer did a terrible job at turnover as the HOA management company was owned by the developer. As a result we were never informed that we should have insisted on an inspection at turnover or that periodic inspections were required of the ponds by the water authority. We have also had major landscaping issues.

We are looking at two possible paths of action. Ask the Developer for support since they are building another subdivision right next to us. The second is to file suit to repair the ponds.

Has anyone successfully sued a CDD?

Thanks
MelissaP1
(Alabama)

Posts:10595


08/19/2021 3:36 PM  
Can you spell out what a "CDD" is? Maybe I missed it.

The HOA membership could sue the Developer but what for? The repairs to be done? I am not sure if you all would win. Can't claim "ignorance" as the terms have been accepted.

If it were me, I'd find out what the expenses are to do the repairs. Once known the scope and cost of work, I'd work on a special assessment or increases in dues to afford it.

Plus would not hurt to re-do your CC&R's, By-laws, and Articles of Incorporation now that the Developer has left.

Former HOA President
MaxB4
(California)

Posts:1614


08/19/2021 3:46 PM  
Posted By MelissaP1 on 08/19/2021 3:36 PM
Can you spell out what a "CDD" is? Maybe I missed it.

The HOA membership could sue the Developer but what for? The repairs to be done? I am not sure if you all would win. Can't claim "ignorance" as the terms have been accepted.

If it were me, I'd find out what the expenses are to do the repairs. Once known the scope and cost of work, I'd work on a special assessment or increases in dues to afford it.

Plus would not hurt to re-do your CC&R's, By-laws, and Articles of Incorporation now that the Developer has left.



CDD is a Community Development District.
AugustinD


Posts:1937


08/19/2021 4:24 PM  
ArtB1, I think you really need to run all the facts here (including any facts omitted in the name of concise, internet posting) by an attorney. The attorney should be able to opine not just on the chances of prevailing, but also on (1) whether the HOA can win an award by the judge of the HOA's attorney fees as well; (2) whether a threatening letter from the HOA attorney might get some results, avoiding litigation all together. The developer might have insurance. Depending on the facts, the insurer might come along and put the hammer down (an insurance industry term, it turns out) and require the developer to settle.

And so on.

I expect developers have been successfully sued many times.

KerryL1
(California)

Posts:8734


08/19/2021 5:12 PM  
States vary so much on construction defect actions against developers that, yes, consult with a qualified HOA or contract law attorney.

You could still be within the statute of limitations. But only an attorney can tell you the steps to take which might at first just be a demand letter of sorts.

Yes, our HOA received a good-enough settlement from our developer and his vendors for big constructions defects in our high rise twin towers. Our attorney specialized in construction defects with experience with high rises. You might try to find one who specialize in your types of defect if such specialties exist.
MaxB4
(California)

Posts:1614


08/19/2021 5:21 PM  
https://hgslaw.com/wp-content/uploads/Frequently_Asked_Questions_re_CDDs.pdf
NpS
(Pennsylvania)

Posts:4216


08/20/2021 7:20 AM  
Posted By ArtB1 on 08/19/2021 1:18 PM
We are looking at two possible paths of action. Ask the Developer for support since they are building another subdivision right next to us. The second is to file suit to repair the ponds.

Either way, you'll need an attorney who specializes in these matters.

Excellent link from Max on CDDs. Some general observations from Max's link and the issues you raised. My reading of your post might not be 100%, but maybe these comments could be helpful.

CDDs can be set up to own facilities. Your CDD wasn't. This makes it much harder to win a claim of any sort against the CDD. As Max's article states, CDDs are government agencies that can often rely on sovereign immunity against claims. That's a very hard hurdle to overcome.

In a perfect world, you might have a conflict of interest claim against the developer. But developers intentionally make it harder by starting and shutting down corporations to limit and compartmentalize liability. Piercing the corporate veil is possible, but the burden would be on you to prove that necessity, and judge's are reluctant to take those steps. More time. More cost. More delay.

If the MC that the developer owns serves multiple HOAs, that entity could be a target for a lawsuit. It's an ongoing enterprise and the reputation of the developer's MC is important to him.

Your best bet may be the potential havoc you could create without much cost to discourage buyers of the nearby development by the same developer. There are potential risks for your HOA if you took that path.

For any of these options, consulting with an experienced lawyer is essential. Emotions must be hot, and you probably could use someone who can step back and advise you on your best choices.

Sikubali jukumu. Read all posts at your own risk.
AugustinD


Posts:1937


08/20/2021 9:00 AM  
ArtB1, is the instrument creating the CDD really so unclear that who has responsibility for the drainage and culvert issues cannot be determined? Is your notion that, if a court found the CDD was responsible for the drainage and culvert issues, then it is up to the CDD to tax all the applicable residents? Would such a tax to fix the problems be all that much than the HOA fixing the problems?

There seems to be lots of legal room for suing CDDs such that a CDD's claiming sovereign immunity, especially for torts, is precluded. It's a new topic for me, so just saying from reading a bit about Florida CDDs in particular.
NpS
(Pennsylvania)

Posts:4216


08/20/2021 9:40 AM  
One of the most significant CDD lawsuits in FL involved Soliviata HOA v Poinciana CDD. Not sure what the outcome was, but from the descriptions of the current relationship by the parties to those lawsuits (I think there were 3 lawsuits), the level of complexity can be formidable.

http://www.solivitahoa.com/std.php?lID=1000472

http://poincianacdd.org/cdd-info

Sikubali jukumu. Read all posts at your own risk.
ArtB1
(Florida)

Posts:37


08/20/2021 12:50 PM  
Posted By AugustinD on 08/20/2021 9:00 AM
ArtB1, is the instrument creating the CDD really so unclear that who has responsibility for the drainage and culvert issues cannot be determined? Is your notion that, if a court found the CDD was responsible for the drainage and culvert issues, then it is up to the CDD to tax all the applicable residents? Would such a tax to fix the problems be all that much than the HOA fixing the problems?

There seems to be lots of legal room for suing CDDs such that a CDD's claiming sovereign immunity, especially for torts, is precluded. It's a new topic for me, so just saying from reading a bit about Florida CDDs in particular.





The document creating the CDD is 94 pages long. Still trying to get through it.

For all the other suggestions, we are attempting to get a Board workshop together to review the complete timeline before making a decision on action.

There are actually 2 HOA's involved and the documents between the two are different.

We just have to be careful because this could get expensive.

AugustinD


Posts:1937


08/20/2021 12:57 PM  
Posted By ArtB1 on 08/20/2021 12:50 PM
We just have to be careful because this could get expensive.
And take years.

You ought to maybe google on those HOA names NpS gave and read some of the commentary about the lawsuit(s?) in which the HOA(s) is (are) involved. It's inspiring.

HOA Declarations often are around 100 pages or more long. I expect you'll get familiar with the CDD agreement's sections and be able to leaf through it quickly to find what you want. God willing you have a digital copy that is searchable. Either way your reviewing the agreement is excellent preparation for a meeting with an attorney. The more prep, the less money spent on the attorney, at least for the first meeting.

Two cents and nothing more.
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