The Transition

“Life is pleasant. Death is peaceful. It's the transition that's troublesome.”

- Isaac Asimov

Much like being a parent who raises a child, only to have the heartbreak of dropping that child off at college, there comes a time when a declarant, after building the units; getting the grounds landscaped in the spring/summer and plowed in the winter; paving the roads; and opening the clubhouse; says goodbye and hands over control and operation of the property to the owners.

This is usually a relief to the owners who, sometimes for years, have had little to no idea how the association has been operating or where their money has been going. There are a few things to help in the process, but first a few words of caution.

Technically, there is nothing that exempts a declarant from having meetings of the board of directors, even though the declarant is on the board and appoints the board members. But most do not. If that's the case in your new association, reach out to the declarant and ask who the declarant's attorney is and/or gather a group of owners and start looking into hiring an attorney to represent the new association. That attorney will contact the declarant and make sure there is, at least, an occasional board meeting at which the declarant will give a status update on the progress at the association; where money is going; when the board will be created; when the transition from the declarant to the owners will occur; and more.

That's not to say a developer will keep owners in the dark, and a good one will not. But developers rarely live in condominiums, so they may not have an understanding of how in the dark owners feel when a project extends for more than a year. These new owners may have no idea of who is moving in, who to call if the lawnisn't mowed or the plow person hasn't sanded the walkways, etc. Rightly so, owners simply don't like paying condominium fees to someone, yet having no idea of how their association is operating or where their money is going.

Eventually the time will come when the declarant, either by the passage of time or the sale of a certain number of percentage of units, will have to pass control to the owners. When that does happen, you should be ready. A few points may help.

Get an accountant. The accountant doesn't have to do a full audit, but it's not a bad idea to engage someone (who will have to file annual tax returns for the association anyway) to look at the books as soon as received by the declarant. Most developers are very good, have very good accountants and have done nothing illegal or shady, but it doesn't hurt to check. Doing so will ease the minds of the new board of directors, which can then let the other owners know it has done its due diligence and all is well.

Depending upon how involved an association wants to get, it's not a bad idea to hire an architect or engineer to review the property. It's not often there are construction defects, but when there are, they need to be found quickly, and the larger point is that frequently one owner who has a defect in construction thinks s/she is the only one with that problem. But by hiring an architect or engineer who canvasses all buildings, that one owner may find there are several others with the same issue. Put simply, if there is a construction defect in one unit/building there may well be defects in others as well, and the power of multiple people approaching a declarant to resolve issues sooner rather than later helps.

One thing often overlooked is that many, but certainly not all, developers don't really care about the declaration or bylaws. They realize they will sell their units and move on, and how an association operates after that is left to the association. That attitude can result in documents that are, frankly, bad. (I once tracked a declarant down and asked, out of curiosity, where he got the really bad documents I was dealing with. There was a pause. And then you could almost see the smile on his face over the phone as he said he had downloaded them from the internet for $200.00. You often get what you pay for, and this was one of those times.)

Just as you should have an accountant look at the books and an architect/engineer look at the buildings, you should have a condominium attorney review the documents and explain why they are good or bad and what may need to be changed or tweaked in order to set you up well as you begin your new life.