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Name the Steps in a condo or coop to transition the association from developer to member control.
When must a developer turn control over to the members in a condo, coop and HOA?
Condo & coop
Can a developer retain any members on the board? If so how many and what are the restrictions?
- Condo & Coop - When 15% of units conveyed, members other than developer elect 1/3 of board.Developer continues to control 2/3 of board until members become eligible to elect a majority of the directorsDeveloper must provide association with an audit of association financial records within 90 days after transition (turnover)A developer is entitled to elect/appoint at least one board member as long as developer meets any of the following requirements: - In a project with less than 500 units and the developer owns at least 5% of units- In a project with more than 500 units and the developer owns at least 2% of units.
- HOA - Developer is entitled to elect at least one member of the board of directors as long as developer holds for sale in ordinary course of business at least 5% of total parcels in all phases of community
What must the developer turn over to the association after he has turned over control and in what time frame?
- A) An audit of association financial records within 90 days after transition meeting.
- B) The records and property of association no more than 90 days
What records are the members entitled to?
All formal, informal and legal documents.
A) Bulk Assignee
B) Bulk Buyer
- A) Purchaser who acquires more than 7 parcels in a single condo after July 1, 2010 and prior to July 1, 2015 as determined by county records; receives assignment of some or all of rights of developer as set forth in declaration or statute by written document recorded in county records.
- B) Purchaser who acquires more than 7 parcels in a single condo after July 1, 2010 and prior to July 1, 2015 but does not receive assignment of developer rights other than right to:
- - Conduct sales, marketing & leasing activities within association
- - Be exempt from payment of working capital contributions arising out of or in connection with bulk buyers acquisition of units.
- - Be exempt from any rights of first refusal from association.
Who may assign developer rights to a bulk assignee?
- Previous bulk assignee
- Court on behalf of developer or previous bulk assignee
Define responsibilities of bulk assignee.
Page 140 line 29-38
What must the bulk assignees have?
- Updated prospectus or offering circular
- Updated FAQ&A
- Executed escrow agreement if required
- Financial report for prior year unless he cant obtain records in which case he must include disclosure that records are not available
- Disclosure statement with description of rights developer has assigned to bulk assinee or bulk buyer.
- Statement regarding responsibilities for warranties.
- If a conversion, statement regarding obligations for converter reserves or warranties
What exemptions do bulk assignees have?
- Warranties of developer unless performed by or on behalf of bulk assignee.
- Obligation to:
- - Fund converter reserves for units not acquired by bulk assignee.
- - Provide converter reserves on any portion of condominium property except as provided in contract for purchas & sale with purchaser and pertaining to design, construction, development, or repair work performed on behalf of bulk assignee
- Requirement to provide cumulative audit from date of formation of association.
Define the steps to create a receivership.
- Member may petition court if board fails to elect or appoint sufficient directors to establish a quorum of the board and use required form of notice as described in statutes
- - Member soliciting receivership must give 30 days after notice sent. Member may proceed with receivership petition.
- If association fails to fill vacancies within 30 days after notice sent, member may proceed with receivership petition
- Upon appointment by court, receiver must notify all member in writing within 10 days.
Define the 3 reasons to terminate a condo.
- Economic waste
- Disrepair of property
- When continued operation made impossible by law or regulation
What % of member is needed to terminate?
80% TVI needed to approve termination of association or in not more than 10% object to termination.