Remember that old saying about what happens when you ASSUME?  Well… it’s still true. We have a client who bought close to 100 lots on a take-down schedule last year in an older planned development that had been stalled out.  It was a “broken” project, with 50 lots in Phase 1, with a half dozen existing homeowners who were very happy that our client was going to save the subdivision. Being ca...
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By in DRE, HOAs, Home Building, Permitting, Regulations

DRE Regulations allow for HOA assessments to be waived for HOA-maintained improvements that are not complete. Regulation 2792.16c, in a nutshell, allows a complete deferment of costs associated with improvements that are not being maintained by the HOA.  It’s actually illegal for the HOA to charge assessments for expenses that they do not incur. IF the CCRs allow for this deferment of assessmen...
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By in DRE, HOAs, Home Building, Permitting, Regulations

Do you develop your project in one company/entity, and then sell homes from another entity? If so, this article is for you! When the Department of Real Estate (DRE) processes an application for a public report, the application is anticipated to be in the name of the Subdivider.  “Subdivider,” in this sense, represents the name under which the public report will be issued. Example: "In the ma...
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By in DRE, Home Building, Permitting, Regulations

Selling homes in phases?  Consider structuring your next subdivision map to include multiple road lots.  Asphalt streets are definitely one of the most expensive items that HOA's maintain.  Breaking the road lot into multiple lots to match your sales plan can save thousands. Think of it this way; if you have all of the streets in one lot, it can "front load" the HOA dues program, causing assess...
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By in Budgeting, DRE, HOAs, Home Building, Permitting, Regulations

Filing bonds on subdivisions are one of those requirements that you can’t often avoid, without delaying getting your project to market.  Subdividers under a Final Public Report must be diligent to ensure compliance with the DRE process when releasing bonds. An early or “illegal” release creates a material change to your development, necessitating an Amended Public Report filing. Each Bond is ac...
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By in DRE, HOAs, Home Building, Permitting, Regulations

Last night, before going to bed, I saw the S&P Homebuilders Index (XHB) was up over 8% in after-hours trading. This morning, I checked and the Index was holding up over 4%!   Why the jump?   That’s after the NAHB and Wells Fargo released worse than expected housing data showing the effects of the shelter-in-place orders are having on the housing market. Their prelimina...
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By in Blog, Budgeting, DRE, HOAs, Home Building, Permitting, Regulations, Reserve Studies

When times are good – phasing your marketing program can be a headache.  When times are slow, however, Phasing can be a lifesaver!  I’ve always thought of marketing Phasing like an insurance policy: it’s a necessity that’s good to have in place just in case you need it later on. We’ve been receiving phone calls and emails from concerned clients over the past two weeks, inquiring about what need...
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By in DRE, Home Building, Phasing Predictor, Regulations

Any time that the common area improvements will not be completed in a development at the time of the first sale closing, a financial security must be posted to guarantee the eventual completion of the improvement.  The financial security amount is 120% of the estimate cost to complete. While most development planning involves the completion schedule of improvements, and estimates the improvemen...
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By in DRE, Home Building, Regulations, Timeline

According to Wikipedia, a fiduciary “is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person.” In the case of a Subdivider/Developer/Builder, the relationship of trust may include proper set up and operation of a homeowner association.  In a...
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By in DRE, Home Building, Regulations, Timeline

In September, a revised RE 618H form was published by the DRE. This revision allows for budget assessment changes in the Public Report. With the new process, we simply need to file an amendment application and $600 fee, then the DRE will approve use of the RE 618H form to be used with the existing report. The result is that our clients can then continue to open escrows without waiting for the b...
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By in Budgeting, DRE, Home Building, Regulations, Timeline