Is your condominium or homeowners association currently controlled by the declarant/developer? Would you like to be prepared when the developer is ready to hand over the reins to you, the owners? In Wisconsin, developer turnover is governed by Section 703.15 of the Wisconsin Statutes. To ensure a seamless transition, there are certain steps associations should take both before and after developer turnover.
Before turnover, it is essential that you obtain all financial and corporate records of the association, all construction documents, all association contracts, as well as a complete list of the names, address and contact information for all unit owners and mortgagees. You should meet with the developer and project manager to determine if there are any ongoing issues (financial, construction, etc.). Set up an insurance committee of unit owners to review your insurance policies. Decide if your association is going to hire a management company and interview potential managers. Hire a knowledgeable condominium attorney to represent the association for the turnover.
After turnover, review the association declaration and/or development agreement and discuss any incomplete projects with the developer. Obtain a reserve study. Review association contracts – are there any you want to terminate? Review the rules – are there any you want to add or remove? Survey unit owners and determine their needs and issues. Are they having any issues with construction or the association? Review the association financial records and determine if the association needs to hire an accountant. An experienced association accountant can help you determine whether or not the developer complied with Section 703.16(2)(b). An accountant can also help you determine if all unit owners are current in the payment of their assessments, and whether the amount of assessments needs to be adjusted to meet the expenses of the association. Finally, you should schedule a meeting with the unit owners to discuss the association’s plans moving forward and whether a statutory reserve account is needed.
To learn more about turnover, and help your association cover all your bases and pave the way for a successful developer transition to owner control read this white paper.