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Subject: A little legalese interpretation, please...
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DavidG45
(Delaware)

Posts:74


05/13/2021 8:47 AM  
I am the sole resident board member of an HOA that is still under control of the Developer. It is commonly understood within the community that when the community (650 planned lots) is 75% "complete" we will gain full control of the HOA Board, based on this wording in the declarations:

...sixty (60) days after the conveyance of seventy five percent (75%) of the Lots that may be created in the Planned Community to Lot Owners other than Declarant...

My question has to do with the technicality of what "conveyance...to Lot Owners other than Declarant" means. The Declarant is a construction company, and The Builder is a nationally known builder of planned community homes. I generally understand that the Builder will offer a batch of lots for sale at a time, then people will sign a sales contract, a permit is pulled, the home is built, and finally closing occurs. My question is, at what point in this process is the "conveyance?" Is it after closing by the final purchaser? Or is there an intermediate stage when the Builder takes possession of the lot from the Developer? It seems the "Declarant Termination" date could vary by months depending upon how that is interpreted.

Any insight is appreciated. TIA.
BillH10
(Texas)

Posts:712


05/13/2021 9:10 AM  
David

Since the word "complete" is used, my interpretation is conveyance means after closing of the transaction which conveys title to the property, including the home, to the buyer.

The conveyance from the Declarant to the Builder does not involve a "complete" home, only an empty lot.
AugustinD


Posts:601


05/13/2021 9:45 AM  
Interesting questions. I went to the Delaware Uniform Common Interest Act to see what it said on this. Just a bit from the Act seems relevant. See
http://delcode.delaware.gov/title25/c081/sc01/index.html

From reading the following sites, the line between declarant and builder apparently is not always bright. Yet at least in DavidG45's case, it is important that the line be bright. I would be scouring the governing documents regarding who the declarant is and whether the builder can also be the declarant; and checking to see who (the declarant or the builder) has title to the lots.

https://spectrumam.com/what-is-a-declarant/

https://corporate.findlaw.com/business-operations/sales-of-lots-from-developers-to-builders-legal-rights.html

https://blog.realmanage.com/transition-control-property-developer-hoa-residents

Regarding when coveyance occurs, this seems helpful:
https://www.legalmatch.com/law-library/article/when-does-conveyance-occur.html



DavidG45
(Delaware)

Posts:74


05/13/2021 9:49 AM  
I believe I worded that poorly. When I put "complete" in quotes I was discussing the common parlance used amongst residents; which I recognize is not the true wording in the Declaration. It's our layman's description, as in "They tell me when the community is 75% complete we get control of the board."

The wording I put beneath it (which does not use the word "complete") is the actual verbiage from the Declarations, but I'm not sure what it actually means. Is a home "conveyed" when the builder acquires the Lot from the developer, when the home buyer closes, or at some point in between?
DavidG45
(Delaware)

Posts:74


05/13/2021 9:54 AM  
Thanks. I guess at least it's not a stupid question! In our case the Declarant is definitely not the Builder, they both make that clear whenever you speak to either of them! Which is why:

"conveyance of seventy five percent (75%) of the Lots...to Lot Owners other than Declarant"

kind of suggests it's earlier in the process than final closing by the home buyer. I hoped this was common verbiage that the veterans would recognize right away, but I suppose it's probably not. This is when a strong Property Management company would be helpful...
JeffT2
(Iowa)

Posts:624


05/13/2021 10:14 AM  
David, who did you buy your home from, the builder or the declarant? What does your paperwork say? Or perhaps the question should be: who are current buyers buying from?

If people are getting a deed from the declarant, then the builder is (probably) not a lot owner and the final conveyance is when the final owner closes. If people are buying (getting a deed) from the builder, then the final conveyance is earlier when the builder bought the lots from the declarant.

This may not be the total answer, but it could a be a good indication.

I would also check with the county recorder of deeds to see who is the recorded owner of the lots.
AugustinD


Posts:601


05/13/2021 10:17 AM  
Posted By DavidG45 on 05/13/2021 9:54 AM
Thanks. I guess at least it's not a stupid question! In our case the Declarant is definitely not the Builder, they both make that clear whenever you speak to either of them! Which is why:

"conveyance of seventy five percent (75%) of the Lots...to Lot Owners other than Declarant"

kind of suggests it's earlier in the process than final closing by the home buyer. I hoped this was common verbiage that the veterans would recognize right away, but I suppose it's probably not. This is when a strong Property Management company would be helpful...
For what it is worth --

-- There is one veteran here (CathyA3) who I believe has worked with developers and may have some insight.

-- Given that you indicate the Declarant and builder are not working together, and assuming the Declaration is silent on the point, I would be contacting the County Clerk to see whose name is on the title to these lots. If it's the builder, then so far, it sounds to me like that lot should be tabulated in the count determining when turnover occurs. (I am way amateur on this part of land development, though. What I am posting here are ideas.)

-- Not sure this will help, but it's something to maybe keep in mind: One part of the Delaware HOA yada statute I cited above does indicate that the contract with the management company does not terminate just because the Declarant has turned over control.

-- I bet there's a reason you have not asked the Declarant about this. Care to share it?

DavidG45
(Delaware)

Posts:74


05/13/2021 11:04 AM  
Not a big deal why I haven't asked the Declarant. He's the kind of guy who will "answer" a simple question with a long, convoluted reply that doesn't actually answer the question. We only talk - group conference call with the property manager - once or twice a month and there are so many more pressing issues I've let it slide.

Plus, when I do get a direct answer it's often wrong; not because he is lying, but because he honestly doesn't know what all is written in our Declarations. He basically has the same laymen's understanding as everyone else. I thought (hoped) perhaps this verbiage was cut-and-dry. I appreciate all of your insight.

CathyA3
(Ohio)

Posts:2021


05/13/2021 11:18 AM  
The Declarant can be the same individual as the Builder or Developer. It's not unusual for these people to do business under an LLC, sometimes with a new LLC created for each new home or each new development. On paper they can appear to be different entities - and legally they are - but the same people may be involved.

I agree that "conveyance" occurs when a sale closes and title and all legal rights in the property move to the new owner. Prior to then you just have a contract to purchase, and things can still go sideways and stop the sale from closing.

In HOAs conyenace may apply to the lot or to a finished spec home (some developers sell both). In condo communities it applies to the completed unit.
DavidG45
(Delaware)

Posts:74


05/13/2021 11:30 AM  
In our case they are absolutely two different companies. One is a "paper" LLC created by a local construction company, and exists only for the purpose of this development. No doubt to protect the primary company from liability issues. The builder is a national company whose name anybody would instantly recognize. They are absolutely not connected in any way.

Hence my question, does "conveyance" occur when the Developer transfers ownership of a lot to the Builder, since that would seem to match the description in the Declarations as "someone other than the Declarant." Or for purposes of "Declarant Control Termination" does it only mean final conveyance to the home buyer (ie: closing date of the actual house to the purchaser.)


BarbaraT1
(Texas)

Posts:444


05/13/2021 12:31 PM  
Posted By DavidG45 on 05/13/2021 8:47 AM
I am the sole resident board member of an HOA that is still under control of the Developer. It is commonly understood within the community that when the community (650 planned lots) is 75% "complete" we will gain full control of the HOA Board, based on this wording in the declarations:

...sixty (60) days after the conveyance of seventy five percent (75%) of the Lots that may be created in the Planned Community to Lot Owners other than Declarant...

My question has to do with the technicality of what "conveyance...to Lot Owners other than Declarant" means. The Declarant is a construction company, and The Builder is a nationally known builder of planned community homes. I generally understand that the Builder will offer a batch of lots for sale at a time, then people will sign a sales contract, a permit is pulled, the home is built, and finally closing occurs. My question is, at what point in this process is the "conveyance?" Is it after closing by the final purchaser? Or is there an intermediate stage when the Builder takes possession of the lot from the Developer? It seems the "Declarant Termination" date could vary by months depending upon how that is interpreted.

Any insight is appreciated. TIA.




Two questions: Can you provide the complete paragraph that your sentence is taken from? Are you looking to take control of the board for a particular reason, or just because you think you're supposed to, based on the documents?




DavidG45
(Delaware)

Posts:74


05/13/2021 12:44 PM  
In my first post I whittled it down to the one key phrase that I'm hoping to interpret. I want to know when we take over because, well, it seems like a pretty basic piece of information we ought to know. If nothing else, I understand the turnover process is pretty complex and I'm hoping to convince the Developer to hire a more competent Property Manager who can guide us through that process, and I need to know what our lead time is. It could as early as this Fall. It could be a year later - depending upon what that phrase means. The entire paragraph is as follows:


The affairs of the Planned Community shall be governed by a Board of Directors known
as the Executive Board. Persons eligible to serve as members of the Executive Board are natural
persons who are designees of the Declarant, or Lot Owners. The Executive Board shall initially
consist of the three (3) persons named in the Declaration. The Declarant shall have the right, in
Declarant’s sole discretion, to replace all initial Executive Board members, and to select and
designate their successors and thereafter remove Executive Board members and designate their
successors from time to time, until not later than sixty (60) days after the conveyance of twenty
five percent (25%) of the Lots that may be created in the Planned Community to Lot Owners
other than Declarant(the “First Benchmark”). During the period from the First Benchmark until
no later than the earlier of (1) sixty (60) days after the conveyance of seventy five percent (75%)
of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,
(ii) two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of
the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of
business, (ili) two (2) years after any right to add new Lots for residential purposes was last
exercised, or (iv) the day the Declarant, after giving written notice to Lot Owners, records an
instrument voluntarily surrendering all rights to control activities in the Corporation (the
“Declarant Control Termination Date’), one (1) member of the Executive Board is to be elected
by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2)
members are to continue to be selected and designated by Declarant. Not later than Declarant
Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members,
who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant
shall have no power to designate any Executive Board member after the Declarant Control
Termination Date.
BarbaraT1
(Texas)

Posts:444


05/13/2021 1:02 PM  
Posted By DavidG45 on 05/13/2021 12:44 PM
In my first post I whittled it down to the one key phrase that I'm hoping to interpret. I want to know when we take over because, well, it seems like a pretty basic piece of information we ought to know. If nothing else, I understand the turnover process is pretty complex and I'm hoping to convince the Developer to hire a more competent Property Manager who can guide us through that process, and I need to know what our lead time is. It could as early as this Fall. It could be a year later - depending upon what that phrase means. The entire paragraph is as follows:


The affairs of the Planned Community shall be governed by a Board of Directors known
as the Executive Board. Persons eligible to serve as members of the Executive Board are natural
persons who are designees of the Declarant, or Lot Owners. The Executive Board shall initially
consist of the three (3) persons named in the Declaration. The Declarant shall have the right, in
Declarant’s sole discretion, to replace all initial Executive Board members, and to select and
designate their successors and thereafter remove Executive Board members and designate their
successors from time to time, until not later than sixty (60) days after the conveyance of twenty
five percent (25%) of the Lots that may be created in the Planned Community to Lot Owners
other than Declarant(the “First Benchmark”). During the period from the First Benchmark until
no later than the earlier of (1) sixty (60) days after the conveyance of seventy five percent (75%)
of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,
(ii) two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of
the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of
business, (ili) two (2) years after any right to add new Lots for residential purposes was last
exercised, or (iv) the day the Declarant, after giving written notice to Lot Owners, records an
instrument voluntarily surrendering all rights to control activities in the Corporation (the
“Declarant Control Termination Date’), one (1) member of the Executive Board is to be elected
by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2)
members are to continue to be selected and designated by Declarant. Not later than Declarant
Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members,
who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant
shall have no power to designate any Executive Board member after the Declarant Control
Termination Date.




This doesn't say that full control of the board converts to homeowners at 75%. It says that one member of the Executive Board is to be elected by the Lot Owners and the other two selected by the Declarant no later than the earliest of 60 days after the conveyance of 75% of the lots or... (other benchmarks).

You don't get full control until after the Declarant Termination Date which in this paragraph is defined as "the day the Declarant, after giving written notice to lot owners, records an instrumet voluntarily surrendering all rights to control activities in the Corporation."

Ideally, the Declarant will give you ample notice so that you can call for candidates and generate interest in serving. That is certainly something you should continue to encourage him to do.


DavidG45
(Delaware)

Posts:74


05/13/2021 1:15 PM  
I'm actually quite positive that is incorrect. Reason being the "First Benchmark" was when 25% of the homes were conveyed, and that is when we were allowed to have one Board member, which is me. That continues from the 25% point until the 75% point.

It is as follows:

* From start until 25% of lots conveyed - Declarant has all three Board Members
* From 25% to 75% of lots conveyed - Declarant has two Board Members and Residents have one
* After 75% of lots conveyed (or if Declarant stops selling homes for two years) - Residents elect five members to the Board

My question is, what is "conveyed" in each case?

CathyA3
(Ohio)

Posts:2021


05/13/2021 1:27 PM  
Posted By DavidG45 on 05/13/2021 11:30 AM
In our case they are absolutely two different companies. One is a "paper" LLC created by a local construction company, and exists only for the purpose of this development. No doubt to protect the primary company from liability issues. The builder is a national company whose name anybody would instantly recognize. They are absolutely not connected in any way.

Hence my question, does "conveyance" occur when the Developer transfers ownership of a lot to the Builder, since that would seem to match the description in the Declarations as "someone other than the Declarant." Or for purposes of "Declarant Control Termination" does it only mean final conveyance to the home buyer (ie: closing date of the actual house to the purchaser.)




Since your original question concerned transfer to homeowner control happens, I'll go out on a limb and say that "conveyance" in this context is talking about conveyance to the someone who is a member of the association as defined in your CC&Rs.

In some cases the builder may purchase lots for himself, making him a member of the association. It's also possible that the builder's company purchased them, and the builder himself is only an employee (his company would be the member).

You may want to look to see if the article about homeowner control includes language about different classes of HOA membership - it's possible transfer of control is dependent on the percentage of what we think of as regular home buyers (the Declarant and maybe others can be a different class of association member).

(Welcome to the joys of sorting out legalese...) :-)

BarbaraT1
(Texas)

Posts:444


05/13/2021 1:38 PM  
Posted By DavidG45 on 05/13/2021 1:15 PM
I'm actually quite positive that is incorrect. Reason being the "First Benchmark" was when 25% of the homes were conveyed, and that is when we were allowed to have one Board member, which is me. That continues from the 25% point until the 75% point.

It is as follows:

* From start until 25% of lots conveyed - Declarant has all three Board Members
* From 25% to 75% of lots conveyed - Declarant has two Board Members and Residents have one
* After 75% of lots conveyed (or if Declarant stops selling homes for two years) - Residents elect five members to the Board

My question is, what is "conveyed" in each case?





Hmmm... I read it again and I would agree that I did misread that section. From 25% to 75% you have one elected board member.

But that mistake aside, I don't see anything in that paragraph that says full transition happens after 75%, just after the Declarant Termination Date - which is not defined by the percentage of conveyed lots, but when "the day the Declarant, after giving written notice to Lot Owners, records aninstrument voluntarily surrendering all rights to control activities in the Corporation"

Still, none of us are lawyers and an attorney with HOA knowledge would certainly be better positioned to interpret this language than anyone here.
DavidG45
(Delaware)

Posts:74


05/13/2021 1:51 PM  
Well, that gives me some other head-scratching thoughts to consider...
JohnC46
(South Carolina)

Posts:11059


05/13/2021 2:02 PM  
The legal definition of "conveyed" is transfer the title to property.

One thing that could arise is a definition of when does a declarant surrender his right to a lot? Is it when the lot is sold? Is it when a home is built on the lot? Is it when the built home is sold?

In one association I belonged to, the declarant retained some lots and we asked our lawyer, is should the owner (the original declarant) of those lots be paying dues? The layer replied a case could be made for that but the legal costs might, in the end be higher then the dues were. We dropped the idea.
CathyA3
(Ohio)

Posts:2021


05/14/2021 6:15 AM  
Posted By BarbaraT1 on 05/13/2021 1:38 PM
Posted By DavidG45 on 05/13/2021 1:15 PM
I'm actually quite positive that is incorrect. Reason being the "First Benchmark" was when 25% of the homes were conveyed, and that is when we were allowed to have one Board member, which is me. That continues from the 25% point until the 75% point.

It is as follows:

* From start until 25% of lots conveyed - Declarant has all three Board Members
* From 25% to 75% of lots conveyed - Declarant has two Board Members and Residents have one
* After 75% of lots conveyed (or if Declarant stops selling homes for two years) - Residents elect five members to the Board

My question is, what is "conveyed" in each case?





Hmmm... I read it again and I would agree that I did misread that section. From 25% to 75% you have one elected board member.

But that mistake aside, I don't see anything in that paragraph that says full transition happens after 75%, just after the Declarant Termination Date - which is not defined by the percentage of conveyed lots, but when "the day the Declarant, after giving written notice to Lot Owners, records an instrument voluntarily surrendering all rights to control activities in the Corporation"

Still, none of us are lawyers and an attorney with HOA knowledge would certainly be better positioned to interpret this language than anyone here.



That section in bold also caught my eye. Also not a lawyer, but what that says to me is that control should transfer to the homeowners after 75% of the lots/homes have been conveyed to someone other than the Declarant, but the bottom line is that it doesn't happen until the Declarant says it does. That leaves plenty of room for shenanigans.

AugustinD


Posts:601


05/14/2021 8:19 AM  
Here's the paragraph DavidG45 quoted from his HOA's Bylaws/Declaration, with me adding one word ("either") and spacing where the commas occur, for readability:

=== Start Excerpt ==
During the period from the First Benchmark until no later than the earlier of [either]

(i)
sixty (60) days after the conveyance of seventy five percent (75%) of the Lots that may be created in the Planned Community to Lot Owners other than Declarant,

(ii)
two (2) years after Declarant and any other declarants as defined in Section 81-103 (16) of the Act have ceased to offer Lots for residential purposes for sale in the ordinary course of business,

(iii)
two (2) years after any right to add new Lots for residential purposes was last exercised,

or

(iv)
the day the Declarant, after giving written notice to Lot Owners, records an instrument voluntarily surrendering all rights to control activities in the Corporation (the “Declarant Control Termination Date’),


one (1) member of the Executive Board is to be elected by the Lot Owners pursuant to Section 2 of Article II of these Bylaws and the remaining two (2) members are to continue to be selected and designated by Declarant.

Not later than Declarant Control Termination Date, the Lot Owners must elect an Executive Board of five (5) members, who must be Lot Owners, and at least one of whom must be a Legacy Owner. The Declarant shall have no power to designate any Executive Board member after the Declarant Control Termination Date.

=== End Excerpt ===

Only in (iv) does transfer happen only when the Declarant says it does. But the phrase "no later than the earlier of" means that, if either (i), (ii) or (iii) happens before (iv), then transfer is supposed to happen.

Else respectfully, I am not sure what about "convey" DavidG45 does not understand.
DavidG45
(Delaware)

Posts:74


05/14/2021 8:30 AM  
That's how I had to break it down, as well, to try to make sense of the overall meaning, and I came to the same conclusion.

My confusion over "convey" is that it says "conveyance of 75% of the lots...to Lot Owners other than Declarant." It seems to me there are two possibilities:

* When the Declarant (developer) conveys the lot to the Builder (a completely different company)
* When the Builder closes with the home buyer

There can be a significant gap - over six months - between the first instance and the second -- which means the date the residents gain control of the HOA can vary by several months depending on what "conveyance to a lot owner other than the Declarant" means.

AugustinD


Posts:601


05/14/2021 8:43 AM  
Posted By DavidG45 on 05/14/2021 8:30 AM
My confusion over "convey" is that it says "conveyance of 75% of the lots...to Lot Owners other than Declarant." It seems to me there are two possibilities:

* When the Declarant (developer) conveys the lot to the Builder (a completely different company)
* When the Builder closes with the home buyer

There can be a significant gap - over six months - between the first instance and the second -- which means the date the residents gain control of the HOA can vary by several months depending on what "conveyance to a lot owner other than the Declarant" means.

Thank you for explaining (a second or third time or more). Pardon my not reading all your posts carefully.

From my reading of the case law, if the language is not ambiguous, then the courts are going to give the language its "plain meaning." The phrase 'conveyance of... the lots" means "conveyance of... the lots." Not conveyance of the houses built on the lot. To me, "conveyance of the houses" usually means conveyance of the lot and the house built on it. Conveyance of the houses (with the lots on which they sit) is something different from a mere conveyance of the lot (or land).

Are you resisting contacting the county clerk to see if the lots have been transferred to the builder? I think doing so is important for resolving the concerns you have.
AugustinD


Posts:601


05/14/2021 8:47 AM  
Posted By AugustinD on 05/14/2021 8:43 AM

From my reading of the case law, if the language is not ambiguous, then the courts are going to give the language its "plain meaning." The phrase 'conveyance of... the lots" means "conveyance of... the lots." Not conveyance of the houses built on the lot. To me, "conveyance of the houses" usually means conveyance of the lot and the house built on it. Conveyance of the houses (with the lots on which they sit) is something different from a mere conveyance of the lot (or land).

Are you resisting contacting the county clerk to see if the lots have been transferred to the builder? I think doing so is important for resolving the concerns you have.
I hasten to add that my comments above are meant to be preparation for meeting with an attorney. It's my layperson's opinion of the situation, based in part on reading a lot of case law about how covenants and bylaws are to be interpreted, especially when there seem to be no ambiguities present. My comments here are supposed to help you formulate questions for the attorney, so you will maybe have a better and more immediate understanding of what the attorney says.

By any chance do your Bylaws or Declaration define "lot"?
AugustinD


Posts:601


05/14/2021 9:14 AM  
From the Delaware Uniform Common Interest Ownership Act, throw this into the mix:

-- Start Excerpt from Delaware UCIO statute ===
81-303
(c) Subject to subsection (d) of this section, the declaration may provide for a period of declarant control of the association, during which a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the executive board. Regardless of the period provided in the declaration, and except as provided in § 81-223(g) of this title, a period of declarant control terminates no later than the earlier of: (i) except as to a nonresidential common interest community, 60 days after conveyance of 75 percent of the units that may be created to unit owners other than a declarant; (ii) as to units for residential purposes, 2 years after all declarants have ceased to offer units for residential purposes for sale in the ordinary course of business; (iii) as to units for residential purposes, 2 years after any right to add new units for residential purposes was last exercised; (iv) as to a common interest community other than a condominium or cooperative, at such time as may be required by other applicable laws; or (v) as to nonresidential units in a common interest community that is subject to this chapter, 7 years after all declarants have ceased to offer nonresidential units for sale in the ordinary course of business; (vi) as to nonresidential units in a common interest community that is subject to this chapter, 7 years after any right to add new nonresidential units was last exercised; or (vii) the day the declarant, after giving written notice to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.

(d) Not later than 60 days after conveyance of 25 percent of the units that may be created to unit owners other than a declarant, at least one member and not less than 25 percent of the members of the executive board must be elected by unit owners other than the declarant. Not later than 60 days after conveyance of 50 percent of the units that may be created to unit owners other than a declarant, not less than 331/3 percent of the members of the executive board must be elected by unit owners other than the declarant.
=== End Excerpt ===
See http://delcode.delaware.gov/title25/c081/sc03/index.html

Note the sentence in the statute that starts with, "Regardless of the period provided in the declaration, ... " Notice that this section of the statute almost duplicates what is in DavidG45's Bylaws/Declaration, except for one thing: Instead of using the word "lots," the statute uses the word "units." A "unit" is defined here
http://delcode.delaware.gov/title25/c081/sc01/index.html as follows:

=== Start Delaware HOA statute definition of "Unit" ===
“Unit” means a physical portion of or 3-dimensional space in the common interest community designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 81-205(a)(5) of this title, and shall include all improvements contained within the space except those excluded in the declaration. A unit may include 2 or more noncontiguous spaces. If a unit in a cooperative is owned by a unit owner or is sold, conveyed, voluntarily or involuntarily encumbered, or otherwise transferred by a unit owner, the interest in that unit which is owned, sold, conveyed, encumbered, or otherwise transferred is the right to possession of that unit under a proprietary lease, coupled with the allocated interests of that unit, and the association’s interest in that unit is not thereby affected.
=== End Definition of "Unit" ===

The statute does seem to apply to both condos and subdivisions with stand-alone houses.

I still tend to think that conveyance of the lot to the builder is conveyance of the unit to someone other than the Declarant.


DavidG45
(Delaware)

Posts:74


05/14/2021 9:54 AM  
Wow! Thanks for all the research.
CathyA3
(Ohio)

Posts:2021


05/14/2021 9:59 AM  
I was just looking at my community's property records, and every time a home changed owners, the transaction received a Conveyance Number (the 4-dgit-year with what looks like an incrementing number appended to it).

Lots can be "conveyed" to the builder, and that's usually the first recorded transaction for every lot. The builder is then a member of the association and will normally pay a reduced assessment for the undeveloped lot. The builder puts up a building and then "conveys" the whole shebang to a buyer/new owner, who then becomes a member of the association. This is normally the second recorded transaction for that lot. In my experience, the builder usually buys a few lots at a time from the Declarant, builds and sells to homebuyers, and then moves on to the next group of lots.

I recommend looking at your county recorder's website to see if the property records are online and searchable. You can look at the sales history associated with every lot/street address and see this stuff play out. Maybe that would make it clearer.
AugustinD


Posts:601


05/14/2021 11:14 AM  
Posted By CathyA3 on 05/14/2021 9:59 AM

I recommend looking at your county recorder's website to see if the property records are online and searchable. You can look at the sales history associated with every lot/street address and see this stuff play out. Maybe that would make it clearer.
Since CathyA3 mentioned this online option, I wonder if looking at online county tax records would work as well, at least to get some idea of ownership.
CathyA3
(Ohio)

Posts:2021


05/14/2021 11:44 AM  
Posted By AugustinD on 05/14/2021 11:14 AM
Posted By CathyA3 on 05/14/2021 9:59 AM

I recommend looking at your county recorder's website to see if the property records are online and searchable. You can look at the sales history associated with every lot/street address and see this stuff play out. Maybe that would make it clearer.
Since CathyA3 mentioned this online option, I wonder if looking at online county tax records would work as well, at least to get some idea of ownership.




Argh, you're correct, I mentioned the wrong county department. Property records (with tax and other info) are on the treasurer's web site.
AugustinD


Posts:601


05/14/2021 11:49 AM  
CathyA3, I do not think you are wrong. Nationwide, I think some counties do have online access to deeds and the like. When it comes to who owns what, I think it's worth checking for both online deeds and online property tax records.
JohnC46
(South Carolina)

Posts:11059


05/14/2021 12:07 PM  
I am debating to post or not as I hate anyone, myself included, that tries to play lawyer. That said, I do not see a defined time/point where the Declarant has to turn over the association to the owners.
Time for David to get legal opinion form a real lawyer, not a play lawyer.
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Forums > Homeowner Association > HOA Discussions > A little legalese interpretation, please...



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