Can Successor Developer Ignore Covenants

by jude
(spring hill florida)

Visitor Question: We have an unusual situation where the community prior to completion was foreclosed and resold to a secondary developer. The developer has control of the "hoa" since the percentage of completed homes has not met the threshold for relinquishment to the residents.

The residents were told when the community was sold that the new owner must honor the established covenants and by-laws. The covenants have specific requirements for minimum size of homes and roof pitch. The developer has brought in builders and allowed them to build homes not meeting these covenant requirements.

What can the existing residents do to stop this and force compliance?

Editors Comment: At the heart of this issue is whether the second developer has to follow the covenants set forth by the first developer. We know that you say the residents were told that this second successor developer is required to do so, but the key is what the law provides, and perhaps what the current developer was told.

We suggest that you and your neighbors move very swiftly to take three steps, to be undertaken in this order:

1. A possible ally in this battle will be your county or city government. Florida has some good regulatory structures in place, in spite of many having been repealed in recent years. If you have not spoken to the city's attorney (if you are in an incorporated area) or the county's attorney (if you are located outside the incorporated area) about this matter, make an appointment to do so immediately.

If you are friendly and not belligerent with this attorney, he or she probably will offer you some good advice at a minimum, and may even have all the information needed to resolve your situation.

It would not be surprising to find that your second (successor) developer conferred with that city or county attorney prior to purchasing the development.

The city's or county's planners, while not having power over this situation in all probability, may be a source of information or encouragement.

2. The next step would be to try to have a simple conversation with the current developer if you have not done this already. Many times people seem to be afraid to try to resolve problems through face-to-face conversation, but that is always worth a try unless violence has been threatened.

As we have implied, perhaps the current developer was told a different story than you were.

Perhaps when faced with a group of you--and you should try for as close to 100 percent attendance of the individual owners as possible--the developer will start thinking more creatively about how to honor the original covenants while still making a profit.

3. Lastly and probably most importantly, we conclude that you the individual property owners need to find an attorney immediately if you want to stop this. With luck you may have one among you, but if not, this may be one time when it is really worthwhile to pool your funds and hire one to work on behalf of all of you.

Providing you are unsuccessful in direct negotiation, please help the attorney that you hire get up to speed quickly with any and all information available to you. You may want to have several of you meet with the attorney in someone's living room, as together you are more likely to remember and have command of relevant facts. If litigation is contemplated, the attorney will appreciate having a variety of claims from which to construct the suit.

If none of this is very successful or feasible, at a minimum be sure you are keeping tabs on how close the sales are coming to allowing the homeowners association (HOA) to be controlled by the residents rather than the developer.

We can only hope that the quantity of housing being built out of conformance with the covenants will be limited.

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