Declarant control in violation of 33-1243
We have a condo in an association that will not relinquish Declarant control. The current Declarant has the management company handling renting of his units and running the association. This creates conflict of interest as they benefit by Declarant control. The current Declarant purchased his units from original declarant over 8 years ago and has never sold a single unit. In fact this declarant has only purchased units. The Declarant owns only about 47% of the units in the complex. How do we force the Declarant and the Property Management company to comply with AZ statute 33-1243? Do we have to file an expensive law suit to correct this situation? Can the Property Management company also be named in the lawsuit as they are violating an Arizona statute? The key issue here is how do the 100’s of condo owners correct this illegal situation without too much legal cost?
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Huch,
There is no way to enforce the law without going to court. The condominium statute is clear, the period of declarant control ends 4 years after the declarant ceases to offer any unit for sale. Leasing is not offering a unit for sale. The law applies to both the original declarant and any assignee that is your specific situation. If in fact your declarant has not offered any unit for sale in the last 8 years the period of declarant control ended 4 years ago. The declarant was required by law to turn the condominium over to the board of directors that was elected by the unit owners. Because the declarant still owns 47% of the unit he carries a significant voting power but get only one vote for every unit that he owns. Based on this even if he did turn the association over to the elected board he stall can very much dictate the makeup of the board based on his voting power. But that board has no allegiance or obligation to the declarant and must act in the best interest of the community. as a whole. This has long been a problem in these communities with declarants refusing to relinquish control over the community. We need stronger laws to prevent this from happening and the resultant abuse of the fundamental property rights of the unit owners and members to self governance. What district are you in or if you can send me your community address and your specific CC&R’s I’ll review your documents and get you the contact information for your legislators for you and other in your community to contact your legislators and ask that they sponsor or support legislation to end this rouge abuse of declarant control and protect the property rights of the homeowners. I’ve already drafted legislation to address this issue and pitched that proposal to two different legislators, that have active communities being abused the same way yours’s is.
Dennis
Thanks Dennis for the response. I had our realtor check and recently the declarant has offered one unit for sale (985 N Granite Reef Rd #140) at price way above market value. This clearly is a recent attempt to subvert the statute. However there are records of the same declarant buying units (not selling) several years back. It is clear we need better legislation. The legislation should also hold the AZ licensed property management companies liable in any lawsuit since they are violating the established statute. We have a homeowners FB group and can get owners to also write to legislators in district 008. Some owners rent out their units, so they can write to their legislator also.
– Huck
Huck,
The good news is that just today I spoke with two legislators that were willing to sponsor legislation to address this abuse of power, I’ve provided them a draft proposal that address your specific case and the same issues that affect so many communities in this state. What the final bill will actually look like is yet to be determined, but at least a solution is in the works.
Dennis