The Declarant Plans to Stay Forever
Our Community has 79 lots, 6 are owned by the Declarant. All others are owned provately. While the Community is nearly complete and 14 years old, the Declarant ammended the CC&Rs 13 years ago to allow the annexatioon of adjacent land owned by the Declarant and land enough to build 300-500 more homes was added and left undeveloped. The Declarant also rejggered the number of votes his lots carry to 9 vs 1 for each homeowner’s lot.
The Declarant provides no management outside of our HOA comapany, does not come to annual meetings yet continues to keep assessmnts to $870. Roughly half of this money goes into a long-term reserve fund.
Also no homeowers are on the board and have no say about anything.
The Declarant is the guest who came to dinner and never left.
How can we get rid of this paracite?
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Frank;
Unfortunately your community is still under declarant control. While the change that your declarant recorded 13 years ago actually violated Arizona Law without unanimous consent of all homeowners in the community at that time you are now beyond the statute of limitation for that violation of the law to challenge that amendment in court. I’ve had very similar situations in communities south of Tucson and those communities have been continuing to chip away at what the declarant is attempting to do with he ill gained power.
Because of the very strong lobbying power of the Arizona Builders association and the fundamental property rights of the declarants to sell their properties as they see fit, the period of declarant control is absolute hell on all homeowners. You relinquish all rights when buying a home in a community under declarant control. You will be taxed (assessments) totally without representation. The single issue that initiated the creation of this great country in the first place.
The one saving grace is that Arizona law does have one provision that stipulates that irrespective of any provision in the declaration (CC&R’s) the period of Declarant control will terminate 4 years after all declarants have stopped active sales of any property in the community. While the declarant may have annexed the adjacent property if he has not actively tried to sell any of that property for 4 years or more he will have given up his rights as declarant and the association will be free to elect new board members. Any remaining lots in the community under the declarants name will be counted on a one for one bass relative to voting power. This may still give the declarant considerable power based on his superior voting power, but at least the homeowners have a chase if they work together.
Dennis
I winter in a community with four associations – a Lot Owners Association (LOA) comprised of RVs and Park Model Homes, a Homeowners Association (HOA) comprised of manufactured homes, and two other associations with RVs and Park Models SHCA and CTCA. All lots are for sale with deeds to the city. I’m in the LOA. The LOA is comprised of 75 lots that have been sold and deeded to owners for a number of years. There is no new development. Likewise, the HOA is comprised of 81 lots that have been sold and deeded to new owners. The SHCA has 74 lots with about 70% sold. Lastly, the CTCA has 69 lots with about 50% sold. So my question is; Because the LOA lots are all sold, and have been for a number of years, does the declarant still exercise control within the Lot Owners Association due to the fact that properties are still being sold in the associations within this park? Or is the LOA now a separate entity?
Brian
It is impossible for me to answer that question without more details on the specific provision of the CC&R’s. Are their separate CC&R’s for each community? is there a master association under which all the separate communities exist? If your LOA is a totally separate entity and all the lots are sold than the period of declarant control has ended for that community and the association board elected by the community runs the association. Your CC&R’s must explain all of this.
I would venture to guess that the park is established as a master community and the declarant under the master declaration still retains control of the master association even though individual associations have turned over control to their elected boards. Once again, the Individual and master association CC&R’s would provide you all the information that you need. Arizona law established the period of declarant control ending either when 75% of the lots are sold or 4 years after the declarant ceases to offer lots for sale. But in your case the percentage of lots would depend on how the community was first set up by the declarant in the CC&R’s.
Dennis
We were under Declarant control of our HOA until just last year here in Arizona.. and more than 75% of the properties have been sold for quite a while… However, the Declarant owned two lots and would not relinquish control to the Homeowners until it filed a new Plat map Dedicating the two lots to the HOA common area.. but at the time giving the Declarant an easement for entirety of the 2 lots and all common area adjoining the two lots for the Declarant s exclusive use… So in reality the Declarant really didn’t add to our Common area but actually took away a Portion of our pre-existing Common area for itself… We the Homeowners did not vote for or agree to the this.. and were not made aware of what the Newly Recorded Plat map contained until after it was recorded by the Declarant in Secrecy… The Declarant did not turn over control of the HOA to the Homeowners until 4 months after the Recording… So I believe the Declarant violated more than one Arizona statute but I’m not an attorney… So my question is.. can we reverse what the Declarant did before giving up control to the Homeowners…
Richard,
What your declarant did is illegal under Arizona law. Ther plat is part of, and integral to the CC&R’s and cannot be modified without the required approval of the specified number of members. It may also be argued that for the declarant to increase his rights over land he needed unanimous consent of all homeowners at the time. You have one and only one option and you must move fast. If you want to change this, you must get an attorney and file a suit against the declarant. Under current law the statute of repose is limited to one year after the recording of the amendment to the plat or declaration. After that no matter if the action was right or wrong you have to live with it forever.
Speak to an attorney today.
Dennis
Dennis, above you say, “The one saving grace is that Arizona law does have one provision that stipulates that irrespective of any provision in the declaration (CC&R’s) the period of Declarant control will terminate 4 years after all declarants have stopped active sales of any property in the community.”
Where is that in state law? And would the state water department ruling a couple of years ago that essentially stopped development atop the Hassayampa aquifer (without other water sources) give a developer a bit of an out, so to speak. I live out in the Tartesso community atop the aquifer in Buckeye. Our Tartesso developer sold our last available lots in our first and last available phase to DR Horton in June 2017. It has talked once in a while about developing more lots out here but has not done so in the eight years since selling those last available lots to Horton. It is insisting that under the law it retains declarant control but, in actuality, is doing a very poor job of maintaining our common areas, including a large Sports Park.
And, finally, would this legislation passed in 2024 change everything. “HB2698 adds A.R.S. §33-1820 to the Planned Community Act to require that a declaration identify a date or method for calculating when termination of declarant control will occur. If a declaration is silent, then declarant control ends on the date when the declarant sells the second to last lot to a buyer….” That is info from a “Travis Law Firm” website.
Garth,
The condominium act has had provisions terminating declarant control when 75% of the community is sold. I’ve developed comprehensive legislation to enhance those statutes and implement them in the planned community act for the last three years. However the Builders association have been successful at killing that legislation every year. What was allowed to be considered by the legislature in 2024 was a token and essentially useless piece of legislation. We had my bill introduced again last year but the builders got to the spineless legislator that chaired the committee that it was assigned to and he pulled the bill at the last minute after I had lined up half a dozen homeowners to speak to the committee that day. We will try again this year and every year until the legislature finally get the intestinal fortitude to actually pass needed and well structured statute that protect developers basic rights but also protect the rights of homeowners to self rule. While I never support anything from the Travis
As firm they are actually correct on what that law does. The problem is the development rights of the declarant. Depending on how your communities declaration is written along with your plat, your developer could be allowed to continually change the goal post, buy simply adding more development to the community. Send me your CC$Rs and plat and I’ll be able to tell you more.
Dennis
Dennis, thanks for the quick reply, and thanks for your efforts on behalf of us HOA victims. Our CC&Rs are at https://www.tartessocommunityassociation.org/pdf/Tartesso_Declaration_(CCandRs).pdf. Not sure what a “plat” is but my parcel info/number from the Maricopa County Assessor’s Office is 504-75-072. I’ve waded thru that legalese a couple of times, and it sure seems that our developer could keep control for decades, thru about seven more phases of Tartesso development.
But, first, could you please answer my original question about declarant termination after four years of not having any more active sales? Is that stipulation still in effect, or has it been superseded by later legislation, perhaps the planned community stuff in 2024 or thereabouts? It has been about eight years since our developer sold all available lots out here. No more have been, how do you say, platted/offered since then although he owns several more parcels nearby.
Garth,
The only statute relative to the termination of declarant control for planned communities like your is the one implemented in 2024. The Condominium act always had the other provision including the one for 4 years after the last lot offer for sale, but that never applied to your community. You CC&R’s limit declarant control as 40 years after the original recording of the declaration which was in 2005 which would mean the year 2045, or when the voting rights of the declarant match the voting rights of the members. Since the declarant get three votes for every lot owned and the owners get one vote per lot than when 75% of all the lots made subject to the declaration are sold transition occurs. Because the declarant identified several additional development rights in Appendix B the total number of lots can change significantly over time. But for any of those additional lots to be added to the community the declarant must record an amendment to the declaration to annex that property into the community. The target number for transition of declarant control will change based on every amendment to annex development rights. While this is not unusual the number of annexable properties identified are fairly large for your development.
Something that is important for your community to understand is that once the % owners ship becomes close to forcing the developer release control of the association he can simply record an amendment to add one of the available annexable lots and continue control. What the developer cannot do is modify the list annexable lots or change the 40 years provision without unanimous consent of all homeowners. Those actions would constitute an increase of the declarants’ rights and would require unanimous consent.
You have a very long ordeal ahead of all of you, where the declarant will have total dictatorial control over your community where you have no say whatsoever over the governance of your community, He can appoint all board members, and they work for him and not any of you. Nor do they act in your best interest they can run the community in any way desired by the declarant and you have no recourse but to do what you are told and pay what you are told to pay. So many people fail to understand these issues and sell their souls to the devil to buy a home in those communities.
I suspect that no one in your community truly understood what they were committing to when they bought there. The 40 year limit for control is extreme but I’ve seen them in many of the most recent communities. Most earlier communities ended control around 7 to 10 years after recording the declaration. Most of you will never have any control over the governance of your communities in your lifetime.
While, as I stated earlier I’ve worked on providing legislation to regulate these transitions of declarant control but even those proposal were limited to 75% ownership to address the situations where declarant control is extended until 100% of all lots are sold or to times when some aspect of control never ends at all. While I believe that eventually we can succeed at getting that legislation passed changing the designated time period is highly unlikely you will always be stuck with 40 years. Hopefully people see this post and look carefully at the membership rights provisions of this declaration and think carefully about that will mean to them and their families and if outrageous like this one simply look elsewhere for a home. Eventually Declarant will change these draconian requirements when they can’t sell any homes.
Dennis