Hostages To The HOA Board

Building dream homes in a planned development is a smooth and uninterrupted process for most of our clients. It’s a fairly simple process despite a few additional steps involved – we do most of the heavy lifting for you.  In the rare problematic cases, issues are usually related to HOA management or the HOA board members.

In some cases, the delays have prolonged more than a year, but with a few tips from us, you can easily prevent such things from happening. Here are a few tips for builders/developers:

Have an Attorney on Your Side

Your attorney should have extensive experience in common-interest developments. Your attorney will help you in the preparation of development articles, bylaws and CCRs; the attorney you hire must have approved MMD (Master Management Documents) with the DRE (Department of Real Estate). Here is why these documents are important:

  • You can greatly reduce the DRE review time with these documents because of your attorney’s prior acceptance of the DRE required info and review process.
  • You will have documents that are designed to help you with many issues that developers face as a part of common interest development.

Know Your Rights as an HOA Board Member

Maintain your position on the board for as much time as possible. Know your rights and exercise them. Here are the common issues that you can better deal with when you’re an HOA Board member.

  • If your filings reach the DRE after the common area is completed, prepare yourself for a detailed review. The DRE will inspect the HOA budget, its current financial condition through financial reports, and require a Reserve Study to complete the process.
  • Sometimes, the HOA managers aren’t aware of the DRE process and end up giving you insufficient information.
  • Many professional management companies aren’t experienced in working with developers and can make changes to the budget that can void your DRE Public Report.
  • Worst of all, the HOA might use funds in activities, events, and campaigns that don’t seem to add any value to the project and instead end up being only expenses. Take the example of HOAs spending the money on holiday decorations.

 The Invaluable Services of a Management Company

Hire assistance from management companies that have specialized experience in dealing with startup HOAs. Here is how you will benefit from their services.

  • The company will act as a liaison between the HOA and you, making sure that everything goes smoothly – not only for you, but your clients as well.
  • They will help you maintain all the necessary paperwork for the building process to ensure that no conflicts arise between you and the HOA.
  • By acting as the guiding entity at the first meeting of HOA board members, the right HOA manager ensures what the future meetings will look like in light of the bylaws and CCRs.
  • The right manager protects the HOA board by helping them understand and comply with the MMDs. He/she will also facilitate timely Reserve Studies to be in full compliance with the regulations.
  • The experienced manager also works proactively to resolve any issues that may come up along the way with the HOA board before they turn into unmanageable problems.

 

Many builders have some level of anxiety when selling homes that fall within a homeowners’ association. The surveys show that the majority of owners who live in a community that has an association are actually happier than those in a standard development.  The same can be true for builders, as long as you do it the right way – our office can walk you through it and provide excellent resources for your next common interest development.