In a newly developed community, transitioning control of the association from the developer to the owners is often an anxiously anticipated – and some might say, dreaded – event. Pursuant to Section 720.307, Florida Statutes, transition of control of a homeowners’ association – when members other than the developer are entitled to elect at least a majority of the members of the board of directors of the association – occurs when the earlier of six different events listed in the statute occurs. Of these listed events, transition most commonly occurs three months after 90% of the parcels in all phases of the community that will ultimately be operated by the association have been conveyed to members or when such other percentage or such other date or event as set forth in the governing documents has occurred.
What happens, though, when turnover is imminent, and there are concerns among the owners that the developer is leaving costly problems for the owners to resolve? Can the owners stop turnover from occurring?
The short answer to this question is no. But, while owners may not have a statutory right to stop turnover, there are several issues they may want to consider in the days leading up to and immediately following the transition from the developer. These include:
- Hiring an engineer after turnover to inspect improvements on the common areas can assist with determining whether any warranty issues will need to be addressed. NOTE: Similarly, hiring an environmental engineer to advise on environmentally sensitive areas that may require specialized and/or permit-driven maintenance.
- Understanding the specific permit-driven responsibilities regarding surface water drainage areas within the community, and identifying the particular water management district that has jurisdiction to regulate those. NOTE: Permits for the responsibility of operating and maintaining drainage areas are generally intended to transfer to the homeowners’ association, so it is critical for owners to know whether drainage problems exist and how to resolve them.
- Reviewing the governing documents upon turnover to determine what powers and responsibilities the association has and whether any powers of the developer need to be assigned to the association pursuant to the governing documents.
- Transferring governing documents – budgets, reserves, and other financial matters, the title of the association’s common areas, association-related contracts the developer may have entered, and numerous other items, many of which may be particular to the specifics of the community.
Given the vast number of issues which may arise in an HOA turnover, owners are advised to seek the advice of a community association attorney prior to transition to discuss their concerns or immediately after the turnover to address issues before the developer is long gone.