Community Association Turnover

The transition of control of a community’s association from the developer to the unit owners represents one of the most critical periods for the long-term financial and administrative wellbeing of all HOAs and condominium associations. While representatives of the developer may retain a minority of the board seats at this important juncture, it is vitally important for the unit owners to wrest complete control of the association and its decisions from the developer and those who may have a stake in protecting the company’s interests.

The new owner-controlled board will be responsible for hiring attorneys, accountants, engineers and other professionals to review every decision and action that has taken place while the developer retained control. Thorough inspections of financial records as well as all of the property’s construction, mechanical, engineering and plumbing elements conducted by highly experienced professionals will be among its first orders of business.

Developers will wish to install a board of directors that is friendly to its interests. They will hope to settle any claims that may arise as favorably as possible, so it is essential for the new board and the professionals who they retain to have only the unit owners’ interests at heart.

Here are some key considerations for owners during the turnover of the board:

  • Do the candidates who are running for board seats have any business or personal relationships with the developer, general contractor or subcontractors, or with any of their principals or employees?
  • Was the prospective legal counsel for the new owner-controlled board initially retained by the developer, or is the developer a current or former client of the attorney or law firm?
  • Do the accountant and construction professionals who are vying for the audits and inspections that need to be conducted have any ties to the developer, general contractor or subcontractors?
  • Does the property management company under consideration have a business relationship with the developer?

It may seem obvious that ties between the new board of directors or the professionals that it retains to the community’s developer or builders should be avoided, yet many communities do not take the time to discern whether any relationships exist or choose to ignore close business and/or personal binds that are readily apparent. By avoiding board members and professionals with any ties whatsoever to the developer or contractor/subcontractors, the unit owners will be able to help ensure that the new board and those who it retains will focus solely on protecting and advancing their interests with no regard to alienating the developer and builders behind the community.

Basic Services
  • Assist board with housekeeping items such as changing the registered agent of the corporation.
  • Review all the records turned over by the developer such as agreements, financial records, plans and specifications, as well as the governing documents.
  • Assist board in retaining additional professionals to assist in the turnover, such as a management company, accountant, insurance consultants, engineers and other design professionals.
  • Prepare for and attend Association turnover meetings.
  • Help Association identify any potential claims.
  • Pursue statutory and other construction warranty claims.
  • Construction Defect Claims.

Our firm's main focus has always been to serve and educate our community in all community association matters. Therefore, if your association has a query regarding the turnover process (the transition from the developer to the owners), we encourage you to submit your question by completing the form below so that we can respond to your inquiry. Alternatively, you can also reach us at 305-442-3334 or toll-free at 1800-737-1390.

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Florida HOA Lawyer Blog - Turnover or Transition