THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, November 12, 1994 TAG: 9411100515
SECTION: REAL ESTATE WEEKLY PAGE: 28 EDITION: FINAL
SOURCE: G. Robert Kirkland and Michael A. Inman
LENGTH: Medium: 84 lines
Q. I live in a new condominium not yet complete.
Eight out of 12 phases are finished and as time has gone on, the builder has slowed down substantially and no new foundations have been poured for about six months
A number of my neighbors and I think it's time that the homeowners took over the association.
What can we do to make it happen?
A. This is certainly not the first time we have heard this question. Unfortunately, under the Virginia Condominium Act, there is little guidance regarding transition from developer control to homeowner control.
One section of the act states, in essence, that at such time as the developer has sold 75 percent of the project, or upon the expiration of the five years from the sale of the first unit, then the developer must relinquish control.
The current law does not state how this is to take place. There is a ``model act,'' which has been written by experts in the real estate field involving specialists in the community association field, which provides more detailed transition provisions.
This law has been enacted in a few states. It requires that the developer bring unit owners onto the board as the phases are developed, so that the more unites he sells, the more unit owners must be on the board.
Another problem that we have encountered is the turnover of proper and adequate records from builders who self-manage the associations they have created.
Legislation in some states requires that specific types of records be maintained and that those records be turned over within a certain time from the date of transition.
The Virginia Legislative Coalition of Community Associations Institute plans to sponsor legislation in the General Assembly in January that would create such requirements for condominiums in this state.
If you are interested in knowing more about that proposed legislation, or want to participate in the process, please feel free to call or write us.
In order to give you a more practical answer in light of current laws, if the statutory time period is not close to expiring, we would strongly urge you to gather together with a committee of your neighbors and approach the builder about creating an advisory council of homeowners, or place a unit owner (or two) on the board of directors.
Developers are generally reluctant to relinquish control as long as they have a significant stake in the development and completion of the project; however, one would hope that most builders would see the wisdom of allowing a representative homeowner group to have input into some of the administrative decision-making with respect to the association affairs such as parking, landscaping and other community policies, rules and regulations.
Hopefully, they will recognize that happy unit owners will help them sell the units more quickly by making referrals. The same committee could approach the builder with a list of items they wish to be provided at transition, including the following:
An accounting of association funds and financial statements from the date the association first received funds and ending on the date the period of declarant control ends.
All of declarant'a tangible personal property that has been represented to be the property of the association.
A copy of any plans and specifications used in the construction of the improvements on the condo property, including landscaping plans, if any.
All insurance policies then in force in which the unit owners, the association or its directors and officers are named as insured persons.
Written warranties of the contractor, subcontractor, suppliers and manufacturers that remain effective, if any.
A roster of unit owners and mortgagees and their addresses and telephone numbers as shown on the declarant's records.
Let us know if this strategy works and we invite other readers similarly situated to do likewise. MEMO: G. Robert Kirkland, president of a Virginia Beach property management
consulting firm, and attorney Michael A. Inman specialize in Virginia
community association issues and are affiliated with the Southeastern
Virginia chapter of the Community Associations Institute. Send comments
and questions to them at Real Estate Weekly, 150 W. Brambleton Ave.,
Norfolk, Va. 23510. To submit questions by phone, call 446-2033; fax:
446-2531.
by CNB