Should Builders Be Required to Pay Assessments on Lots Without Houses?
In the current residential real estate market, I am frequently asked by boards of directors if they should collect assessments from builders who own lots that do not have houses built on them yet. The answer? Generally yes.
Refer to your declaration of covenants, conditions, and restrictions to determine if a formula exists for reducing the assessment on lots without houses. All members of an association are required to pay assessments. Generally, a builder is not immune from this requirement. Further, many declarations require that construction begin and be completed within specified time frames or face fines.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Refer to your declaration of covenants, conditions, and restrictions to determine if a formula exists for reducing the assessment on lots without houses. All members of an association are required to pay assessments. Generally, a builder is not immune from this requirement. Further, many declarations require that construction begin and be completed within specified time frames or face fines.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Posted by Ryan McCabe at 6/30/2008 11:03 PM 
Categories: Property Owners Association, Assessments, SC HOA Law, Homeowners Association, liens, SC Community Association Law, Collection law, Condominium Association
Categories: Property Owners Association, Assessments, SC HOA Law, Homeowners Association, liens, SC Community Association Law, Collection law, Condominium Association
What can homeowners do when declarant (developer), prior to turning the HOA over, stops maintaining grounds, pool, etc. and says he is going out of business? Seventeen out of 80 homes have sold.
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Seek legal counsel!
Has the developer turned over control to the association? Who owns the "unsold" lots? Has the developer declared bankruptcy?
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
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"Declarant shall be exempt from payment of any Annual Assessments, Special Assessments, and Emergency Special Assessments with respect to unimproved and unoccupied properties owned by the Declarant.."
Does this exemption obtain even after the "turnover" date has passed? Does the exemption obtain even if the Declarant insists upon casting votes for POA board members based on its holdings of unimproved properties?
Are there precedents in this regard?
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It depends. The SC Supreme Court had held that a developer owes certain fiduciary duties to its community associations. So long as the developer has adequately funded the community association in other respects and turned over the common areas in good repair, this provision may pass muster. Note that it only applies to undeveloped lots.
Click here for post that discusses case.
It is important to consider all applicable provisions in the governing documents and to consider the actions of the developer. This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
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