Keepers of the covenants
When developers turn over control of a homeowners' association, homeowners find there's a lot of responsibility involved in keeping the community running.
Courtesy of The Jacksonville Times-Union
Vernon Gwynne got lucky.
The 78-year-old businessman, who gives financial service seminars, headed up a committee to transfer control of a homeowners' association from the developer to the homeowners which, so far, has gone off without a hitch.
Kleinsmith said that several homeowners want to take control of the association and feel that they have the right to, but that they've had trouble striking a dialogue with the developer.
Earthmark, for its part, is in the process of transferring association control to the homeowners, said Chief Financial Officer Doug Cordello. Cordello said that the company is awaiting final inspection of the community by the St. Johns River Water Management District compliance department.
Once those permits are earned, the developer will turn control over to the association, he said. He said he has submitted all the necessary paperwork to the department, but he said inspectors will probably not arrive for two to three weeks.
He declined to comment on specific issues brought up by the homeowners.
Once a transfer does occur, homeowners must decide whether or not they want to keep a management company to collect dues and handle the day-to-day clean-ups and legal issues that can bog down association members.
"If you're not a managed community, you're an unhappy community," said Scott Steffen, vice president of Property Management Systems Inc, a Yulee-based property management company that maintains several communities in northeast Florida.
Steffen said that homeowners need management companies to act as a buffer between individual homeowners and the board. If there's a problem in the community, a management company can keep neighbors from personal confrontation.
But for communties of fewer than 100 units, hiring the company might not make financial sense, he said.
Homeowners of the Confederate Crossing II subdivision, a new community of 90 homes near Whitehouse on the Westside whose first board was elected late last year, decided that hiring a management company was simply too expensive, said Tod Wood, the association's first president. Management companies gave the board estimates that ranged from $3,600 to $6,000 per year, a cost that could be defrayed if the board was willing to take on additional responsibilities.
None of the board's new members had ever served on an association before, and when Walter Williams, the developer, completed the association's turnover on Oct. 29, board members picked the brains of executives from management companies for advice, he said.
"You think that when a homeowners' association is turned over that everything is set up," Wood said. "There were a lot of things that we didn't think about -- like getting insured or a business address -- that we found out quickly we had to do."
Members of new associations may be luckier than they think.
Sometimes, builders are motivated not to release an association to the homeowners at all, said Ellen Hirsch de Haan, a past president of the Community Associations Institute and a Tampa Bay-area attorney who represents several homeowners' associations.
"They don't want a community to turn around and change things that might impact sales," she said. "Associations could not allow construction trucks or put limits on pets or a lot of other things that might hurt construction or slow down sales."
Once the turnover does occur, the new association can face a litany of problems, said Richard Roll, president of the American Homeowners Association, a national homeowner advocacy group.
Developers, sometimes keep homeowners association fees artificially low while they are in control, he said. Once the homeowners have sole power, they find that the costs of maintaining the community are much higher than they are accustomed to paying.
"The builder has one motivation, and that is to sell the properties," he said. "It's a big challenge for both the builder and the homeowner. Sometimes the transition works. But sometimes, it can seem like nobody's minding the store."