Developer Rights

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Money House

Facts

Developer recorded a Declaration in 2001 for the 260 Jamie Lane Condominium Association (“Association”) consisting of nine units in what seemed to be one building, with an allocation of the percentage interests based on the square feet of each unit.  Like most Declarations, it provided that “[e]ach Unit Owner shall pay his proportionate share of the Common Expenses … in the same ratio as his percentage of ownership…” with corresponding lien rights if the payment was not made.  The Developer sold five of the units in 2001 upon apparently completing a building within the Association.  The Developer filed an amendment to the Declaration and Plat which stated that the building where the five sold units were, was complete and describing “the proposed units for a different building to be constructed on Lot 1.”  The Developer continued to own the four uncompleted units.  The Association at some point began assessing the Developer for the four unbuilt units, and when the Developer refused to pay, the Association placed a lien on the unbuilt units. …

Continue Reading Developer Liable for Assessments on Unconstructed Units

Empty Street
Facts

Developer subjected property to the condominium act in Massachusetts in 2008.  By the terms of the deed, it included all the “land and improvements at the property…”  There were to be six wings and up to 109 units built over a period of seven years.  When the deed was recorded, 33 units had already been constructed.  The additional wings were shown on the plans and noted on the master deed as “presently constitute common areas and … may be completed as additional phases.”  The declaration contained a reservation of developer rights that provided the developer seven years to “substantially complete the additional phases” and that a failure to complete them would constitute a waiver of development rights. The day before the developer rights were to expire, the developer recorded a series of documents to expand its ownership rights and extend the development rights an additional seven years.  Sixteen days after the documents were recorded the association filed suit.  The association sought declaratory relief that the developer’s rights had expired and that the developers attempts to extend those rights was invalid.  The developer answered and counter-claimed that it was in the right.
Continue Reading Expiration of Developer Rights – What Happens to the Land where Units were Not Constructed

Finger Flick
Facts

David Bagwell was the developer of three homeowners’ associations (HOAs).  David and his wife Susan (the Bagwells), acted as directors of each of the HOAs.  Sister Initiative, LLC (the LLC) loaned money to the HOAs and was owned by Bagwells’ daughters.  Susan Bagwell was the manager of the LLC.  The Bagwells also owned several other businesses that interacted with the HOAs.  In 2010 the LLC loaned the HOAs $120,000, allegedly because of the downturn in the economy.  In 2011 the Bagwells were ousted as directors, and the LLC sued to recover on the loans.  The use of the funds is the heart of the case, as the HOAs argued that the funds were funneled to improper uses.
Continue Reading Association NOT Liable for Loans Made By Developer Related Entity

Princess and Frog

Declarant/Developers of Community Associations love to reserve themselves rights within the Declaration that extend far beyond their Declarant control powers.  This is nothing new.  But when a Homeowners Association puts it foot down, who will end up on top?  It depends on how all the sections in the Declaration read together, and as this case shows, ambiguity does not favor the Declarant.

Facts

In a 2019 case, a court had to interpret the Declaration governing an HOA (subdivision) and determine who was right.  The Developer, after turning over control to the homeowners, sold the final lot to a buyer with a planned home that did not fit the specifications of the Declaration. …
Continue Reading Post-Turnover Declarant Rights? Think Again…This One has a Happy Ending for the HOA