Get 1 year of free community web site hosting from Community123.com!
Monday, April 06, 2020











HOATalk is a free service of Community123.com:

Get 1 free year community website and email newsletter hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Developer HOA Turnover Options (Okla)
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
RobertT13
(Oklahoma)

Posts:16


04/04/2020 3:26 PM  
Hello all, A developer friend of mine has asked me about his obligations regarding his HOA turnover responsibilities.

The Developer has created a set of Covenants that state "An HOA may be created after 50% of the tracts are sold." That's it, no other specifics in the Covenants about the HOA. The Development consists of 50 tracts in a rural area of Oklahoma. So far 30 tracts have been sold and owners are starting to build homes. Everything is going well.

The Developer is a good guy and and wants to do the right thing, but knows nothing about HOAs... surprise surprise, I Know.

Questions:

1) Is the Developer legally obligated to form an HOA now that the 50% point has been reached? The covenants say an HOA "may" be created if that matters.

2) Does the developer have to form the HOA himself (HOA corp, BOD election, bylaws, etc) and run it until he declares he is finished at which point he would turn the HOA over to the owners?

3) Can the developer turn over the creation of a functioning HOA (HOA corp,BOD election, bylaws, etc.) to the owners after he declares he is finished as the developer? Approx 1 more year of work is needed by the developer on this property.

What are his options as the developer regarding HOA turnover to the owners.

Also, the only real HOA expenses will be maintaining roads... no other common areas.





RobertT13
(Oklahoma)

Posts:16


04/04/2020 3:35 PM  
I forgot to mention... Okla HOA law is very sparse and I don't believe it address when and how the developer actually does the turnover of an HOA to the owners.
JohnC46
(South Carolina)

Posts:9322


04/04/2020 3:52 PM  
Time for your friend to lawyer up.
RobertT13
(Oklahoma)

Posts:16


04/04/2020 4:38 PM  
Can't be that complex.
GenoS
(Florida)

Posts:3684


04/04/2020 8:41 PM  
Is that your professional legal opinion?
MelissaP1
(Alabama)

Posts:9136


04/05/2020 5:44 AM  
He's got to basically create a corporation. Which if not going to have anything like a golf course, will most likely be a not-for-profit corporation. (NOT a charitable non-profit). All of which takes some paperwork to fill out. I'd recommend he contact a corporate lawyer to help him set up the corporate side of the house.

The reason to form a HOA is to cover the long term maintenance costs that one will incur when owning a large amount of common area. That may mean a front entrance to be mowed/maintained all the way up to a clubhouse/pool/other large amenity. They don't pay for themselves. That is why a HOA is formed to pay for these shared items out of everyone's pocket when turned over. If still developer owned, it helps them with some of these expenses.

Otherwise if he doesn't want a HOA, may still need to go through the process of dissolving that paperwork. Again another legal question for a professional.

Former HOA President
TimB4
(Virginia)

Posts:16706


04/05/2020 6:23 AM  
See:



Best Practices - Transition a pdf document from the Foundation for Community Association Research


Transistion Plan an HOA's formalized plan for transition.


Condominium & Homeowner Association Transition from an attorneys website


HOA transition checklist



Subject: Steps to follow in transfer from developer to homeowners An earlier thread on this forum


Hope this helps.

Tim
GeorgeS21
(Florida)

Posts:2335


04/05/2020 10:19 AM  
Great, helpful stuff, Tim!
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Developer HOA Turnover Options (Okla)



Get 1 year of free community web site hosting from Community123.com!

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement