Developer control of the HOA

[danieldeceuster]

What is the name of your state (only U.S. law)? Utah

I live in a master HOA that has several smaller neighborhoods. Currently we have 3 neighborhoods, but the full development plan will eventually have 8. All will have their own dues for pools, landscaping, etc. but everyone will also pay the master HOA due as well.

I have spoken with the property management company of the HOA. The developer controls and owns the entire HOA. We have 300 of the 1,200 planned units built. I'm told the homeowners do not gain control of the HOA until 2037 or 95% build out according to the paperwork.

My question is this: can the developer legally do this? I've seen the financials. The developer pays $0 per month to the HOA. The only money coming in comes exclusively from the homeowners. How can a developer unilaterally control everything like that without paying any dues? Is there any type of legal recourse we can take to gain control of our HOA and govern how we want? The developer pays no attention to our feedback or petitions.

Thank you in advance!

 

[LdiJ]

What is the name of your state (only U.S. law)? Utah

I live in a master HOA that has several smaller neighborhoods. Currently we have 3 neighborhoods, but the full development plan will eventually have 8. All will have their own dues for pools, landscaping, etc. but everyone will also pay the master HOA due as well.

I have spoken with the property management company of the HOA. The developer controls and owns the entire HOA. We have 300 of the 1,200 planned units built. I'm told the homeowners do not gain control of the HOA until 2037 or 95% build out according to the paperwork.

My question is this: can the developer legally do this? I've seen the financials. The developer pays $0 per month to the HOA. The only money coming in comes exclusively from the homeowners. How can a developer unilaterally control everything like that without paying any dues? Is there any type of legal recourse we can take to gain control of our HOA and govern how we want? The developer pays no attention to our feedback or petitions.

Thank you in advance!

It is common for a developer to retain control of an HOA until a certain percentage of the units have been sold. Its in the developer's best interest to do so to keep the neighborhood as attractive as possible so that the developer can continue to sell units. That generally benefits the existing homeowners as well.

You might have some valid gripe if the developer is using any of the HOA monies to do initial landscaping and things of that nature in the neighborhoods that are not yet developed, but as long as the HOA monies are being used only for elements benefits the established neighborhoods then it should not be a problem.

 

[quincy]

What is the name of your state (only U.S. law)? Utah

... I'm told the homeowners do not gain control of the HOA until 2037 or 95% build out according to the paperwork.

My question is this: can the developer legally do this? I've seen the financials. The developer pays $0 per month to the HOA. The only money coming in comes exclusively from the homeowners. How can a developer unilaterally control everything like that without paying any dues? Is there any type of legal recourse we can take to gain control of our HOA and govern how we want? ...

As LdiJ said, a developer initially incorporates the HOA and will initially control the HOA. Also initially, the developer's representatives will generally serve on the Board of Directors. A developer often retains control of the development for years, often not relinquishing control until a certain percentage of units are sold, this to protect his investment.

A development's Declaration of Covenants, Conditions and Restrictions is recorded and the CC&Rs will provide the details of the membership and property ownership rules - so these are not something you were "told" but something you agreed to when you purchased your property.

You can have the CC&Rs for the development reviewed to see if they comply with Utah state regulations but, to answer your question and based strictly on what you have posted so far, yes. It is generally legal for a developer to do what your developer has done.