Over the last
two weeks, we spoke about the events that trigger turnover and
what the developerís responsibilities to the association are at
turnover. Now comes the hard part. It is important to
understand that the first Board of Directors comprised solely of
the unit owners has an awesome responsibility.
It is their job to ensure that the developer delivered all that
was promised and that the physical property and the
associationís finances were properly maintained during the time
period the developer was in control of the association. Your
law firm, engineer and accounting firm should coordinate their
efforts to determine issues like:
developer improperly fail to pay the associationís bills or fail
to pay assessments on developer owned units?
developer improperly failed to fund reserve accounts?
developer improperly charged unit owners for services never
developer failed to deliver possession of the property to the
unit owners free from structural, electrical, mechanical or
developer failed to build the amenities as promised?
If the experts
find that the developer has failed in regards to any of the
above matters, the association's law firm must be prepared to go
to court if necessary and protect the associationís rights. The
association needs to be careful, however, because again, there
are strict statutes of limitation in regard to pursuing money
owed by the developer to the association and forcing the
developer to honor its warranty and make necessary repairs.
Sometimes the association needs to act quickly in order to get
results. You may also want to strike early before the developer
has the opportunity to divest itself of any ownership in any
remaining unsold units so the association is not left chasing an
empty shell who suddenly packed its bags and got out of Dodge
with no other assets to attach. This is a very legitimate
concern with lesser known fly by night developers. Florida law
does not quire developers to post any bond to ensure the
developer meets all of their obligations and that the unit
owners have a source of funds to seek if the developer fails in
that regard. Another potential pitfall is that these cases
typically do not provide for prevailing party attorneyís fees.
So, you have to be careful to not spend $10.00, chasing 5.
tremendous amount of new construction throughout Florida over
the years, the turnover process and developer responsibilities
to Florida community associations will no doubt be the subject
of much litigation in our courts, both now and certainly into
the foreseeable future. The important thing to know is that the
Board should seek professional help at this crucial period of
time, because the decisions made will have a long lasting effect
on the community.