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Subject: Post developer turnover changes
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04/19/2021 10:22 AM  
Hello HOA veterans. This is my first post here, and as a new HOA President and I'd love to get some thoughts.

I am a new president on an HOA in MD that just took over from a developer after the 15 year class B membership votes expired. We had an initial meeting, vote, elected 5 board members, and are now finally on our own. (With a mgmt company) The neighborhood has roughly 100 completed single family homes, and about 75 to be built in a final 2 phases. Coinciding with the developer to homeowner HOA turnover, the original developer sold out his remaining phases to another developer. The new developer wants nothing to do with us, and is working to re-draw the remaining phases, create a brand new HOA, change lot sizes, modify lots to open space and vice versa, etc. As an HOA now, our CC&R's have clear rules about converting open space to lots, annexing, etc., and our documents also speak to the entire block of property as recorded in the original plat. I want to believe that at some point, the deeds and real property system will bring this to a stop, but at the same time I am trying to find all avenues to get in front of this situation. I know that developers can kind of do what they want WHEN they control the HOA, but am I right in my thinking that we have full right to stop this change unless the membership votes to de-annex/modify/etc.? We also have queries out to the county planning commission to provide insight as well.

Maybe another bit of background on why this matters... we are a small, not very wealthy HOA that mostly provides landscaping, trash service, and some common space. Primarily, the new developer wants to shrink lot sizes which will most certainly create smaller homes, and lesser property value. Additionally, the changes allow cheaper infrastructure by creating fewer roads for the developer to build, but in exchange, makes more open space that we have to maintain. And finally, the new sections splitting away from our HOA and forming their own will split our neighborhood layout to 2 very different communities, remove some of our common areas from our control, and take away income of course.

Any advice on how and where we may be able to tackle this situation would be appreciated. Thanks all!
(South Carolina)


04/19/2021 10:27 AM  

You need legal advice ASAP. I have seen HOA docs where Phase 2 was platted and shown but upon reading the docs the developer/declarant could do things quite differently. Happened in my HOA but the opposite. Phase 2 homes were bigger and more expensive. I live in Phase 2 but would non have bought in Phase 1.


04/19/2021 10:28 AM  
-- In my experience, you're right to be speaking with the county planning commission. You want to be as specific as possible with the ways the new developer is supposedly violating the covenants.

-- On the other hand, developers are nearly always quite savvy legally, with many experienced in the law. If the county or city says they have no control over the situation, then this is probably accurate, and it will suggest your HOA cannot do anything as well. But let's see what the county says, first.

-- Your HOA should retain an attorney; come up with specific questions about covenant violations here, and let the attorney help. In my experience, and assuming your concerns have legal merit, your Board has a fidcuciary obligation to retain an attorney for this situation.



04/19/2021 10:58 AM  
Wow. Thanks for the fast advice. We have an exec meeting this week and hope to get updates from the county. I will make sure we talk about next options, including legal should those county updates not seem favorable.

It's kind of an odd situation in that the new developer is not violating the covenants YET... we just know they intend to.
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Forums > Homeowner Association > HOA Discussions > Post developer turnover changes

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