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Subject: Transition from Developer to Owners
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08/17/2012 12:46 PM  
I have read at least 100 threads on the site, thank you it has been helpful. I have created a list of items from many of the threads on tips for the transition, thank you.

This question is in reference to a single family home subdivision with about 250 plats that has about 150 houses completed. We don't have anything fancy, some small common areas with subdivision signage, 2 retention ponds, but enough that the developer has estimated about $35K per year of expenses that he has been paying out of his pocket.

We just had a transition meeting this past week (not even really knowing what we were getting into) where we elected a board as the 10 years since inception date has come up and it had to be handed over to the Community. I was elected to the 5 person board, and could just use some tips from others that have gone through the same.

The developer has NEVER collected dues, there might have been something small at closing, but I don't believe there was.

We are having a meeting with the developer some time next week, to pass on information, but I don't know what to expect.

I do expect a $0 bank balance, how do we continue even small things like lawn mowing. Bylaws state budgets are created by November 1 for the following year, what do we do for 2012? There is a rule allowing at any time to levy a special assessment for any reason.

How do you know what addon's people have built were approved or not by the developer. There are statements in the bylaws as silly as "any mailbox erected on a lot must have prior written approval by the developer" "no fences or similar appurtenances shall be erected on any lot with the exception of wooden fences which may be erected only with the prior written approval of the developer" There are violations everywhere, but how would we know the approved and can you do anything if not a non-wood fence up for 6 years? or a wood fence up for 2 years with no approval.....

Appreciate any comments from people that have experienced the same situation.



08/17/2012 12:57 PM  

All of this information should come from the developer. However, if they do not have it to provide, I would recommend starting from the day transition is completed and moving forward from there.

1. Get a reserve study done (typically its best to pay for the first one but if funds are an issue, then one can be done on your own). For more info on Reserves click this link: Subject: Reserve Studies/Funds 101

Expect that with little to zero initial funds, Assessments will be higher because you won't have as long of a time to put money aside (as compared if it was started 10 years ago) to fund the reserves.

2. Expect that all changes currently in existence was approved by the builder. Without documentation, I would suggest going through the community and documenting how the homes are now (pictures are great for this) and start the architectural files to keep track of future changes.

As for the rest of this year: Perhaps you can have the developer to agree to fund the current contracts for the remainder of the year (especially since he failed to collect assessments).
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Forums > Homeowner Association > HOA Discussions > Transition from Developer to Owners

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