No Successor Developer so there is no architectural control

by John
(Round Rock, TX)

Visitor Question: I live in a neighborhood in Texas that was developed 30 years ago. The original deed restrictions state that changes to the property need to be submitted to a three-member Architectural Control Committee (ACC) that will serve at the pleasure of the Developer or the Developer's successor.

All of the latest ACC members have resigned and the Developer never designated a successor to appoint the ACC. The last time the Developer appointed ACC members was 2004, and the Developer no longer owns any property in the neighborhood.

The Municipal Utility District (MUD) that runs the wastewater and other utilities in our area, and is run by a Board of Directors of neighborhood residents, attempted to contact the Developer to get it to assign them as the successor so that they can appoint the ACC, but the Developer never responded.

The MUD has decided to do it anyway. It's unclear to me that the MUD can do that though. They've also tried to change the deed restrictions to make it a five-person committee even though the deed restrictions state that it's a three-person committee and that the deed restrictions can only be changed by a majority vote of the homeowners.

The deed restrictions state that the ACC has a month to make a determination and that if the month goes by without the determination, then the homeowner can go ahead and make the changes. So is it possible that homeowners in my neighborhood can make whatever changes they want? They can theoretically be in compliance with the deed restrictions by submitting changes to a non-existent ACC and then when they don't receive an answer after a month, can they go ahead and do it?

Editors Reply: John, it seems that you have a good understanding of the situation already. Yes, we are afraid that neighbors could make whatever changes they wish until the situation is cleared up. This is a great cautionary tale about what happens when seemingly strict guidelines are established, but then a developer does not follow through with its responsibilities.

Ultimately it becomes the homeowners' problem as they deal with the consequences of no architectural control when some folks probably found design control to be an important feature when considering a home purchase decision.

We share your doubt that the MUD has the power and authority to do this. It could be that under the Texas enabling legislation for this kind of district, they have been given such power. But we doubt it. (Also we cannot resist commenting that people who can run a utility district may not be the best ones to set up an architectural review process. Those two things usually represent different skill sets.)

The simplest and most direct way to fix this seems to be to have a homeowners meeting to debate the issue and then take a vote on how you and your neighbors would like to change the deed restrictions. Not changing the restrictions seems like a very poor option, and you can and should make it clear that the consequence of indecision is no architectural control at all.

At issue should be whether to get rid of the successor developer idea, which seems very reasonable to us since the developer doesn't seem to care and hasn't appointed anyone. Get the developer out of your lives then, and have a straightforward HOA with an elected board and officers.

The second issue is whether you folks want architectural control, and if so, how to achieve that. Do you want a three-person committee? That is fairly common if all three are architects, or even if two of the three are architects. Or do you want a five-person committee with some people who are not architects? (We think a five-person committee, all of whom are architects, would be a nightmare. They probably would not agree on much of anything, and getting them to "meet," even virtually or serially via email, would be tough.)

You are on the right track here, so hopefully you can organize a well-attended homeowners meeting. If that seems impossible, given vacation season, absentee owners, and apathy, you might have to look into what other voting methods would be considered official, given your particular deed restrictions.

If you feel inexperienced in organizing such a meeting, find a neighbor or two who like to do such things.

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