A Court in Colorado recently dealt with a developer who placed a provision in the declaration of a condominium association prohibiting amendment of the declaration – ever – without the declarant’s written consent, and requiring that all construction defect claims be resolved through arbitration (Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. (395 P.3d 788)). Continue Reading Developers Sometimes Draft Documents for Their Own Benefit
In a recent case out of New York (Board of Mgrs. Of 325 Fifth Ave. Condominium v. Continental Residential Holdings LLC, 139 A.D.3rd 472 (2017)) a condominium board signed a broadly worded document, releasing the developer and multiple other developer-related entities and their “heirs, executors, administrators, successor and assigns” from claims associated with the construction and design of balconies and their related structures. The Board then sued some of the developer-related entities and individual members of the entities under “alter ego” and “pierce the veil” theories. Continue Reading Thinking of Signing a Release? Do Your Homework
A recent case in Florida (MacKenzie v. Centext Homes, 208 So.3d.790 (2016)) was not bashful about holding a developer to the same rules as other property owners in a Homeowners’ Association (“HOA”). The HOA in this case was still largely under developer’s control during the period in question. The developer controlled Board included a reserve line item in its budget and collected reserve funds from its members. Despite initially contributing $32,000.00 to the Association, the developer, Centext, ceased contributing to the operating expenses and assessments, instead opting to fund operating deficits (when assessment income failed to exceed operating expenses). Continue Reading Developer Held to Same Rules as Other Owners
Yes, developers can be lazy, greedy good for nothing con-artists. Developers can also adversely affect the rights of an association by simply doing nothing. Specifically, a developer (owner of the property and declarant of the association) with knowledge of construction defects can prevent the association and/or unit owners, after turnover, from potentially suing the contractor and/or engineer for construction defects. Continue Reading After Turnover Do a Developer’s Actions (or Inaction) Affect an Association’s Construction Defect Claims? YES
Picture this: an urban condominium complex and neighboring apartment building, built by the same developer, with one parking garage between the two. The condominium owners were led to believe that the garage belonged to them as a common element; however, just before turning over control to the unit owners, the developer/declarant secretly recorded an easement over 40 parking spaces for the benefit of his neighboring apartment building (essentially, giving an easement to himself). The developer sat tight for a few years, and then asserted his easement rights out of the blue. Continue Reading Turnover From Developer—Unfair Easement
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. Continue Reading Turnover – Considerations for your Condominium Board of Directors and Officers