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Phone: 818-889-4426 Local to Camarillo Ventura County and Oxnard, consultation services Nationwide.
The Developer (Deaclarant)/ Owner Transition typically hires a Management Company to handle the required maintenance, Owner issues, accounting, and the myriad of other tasks involved in the running of an Association. As each phase of the development is completed, the new Owners take over the responsibilities previously handled by the builder. Since the developer hires the initial Management Company, there are inherent conflict of interests for the Management Company. Although the builder is bringing in the business to the Management Company, their fiduciary duty is to the Owners. How can the buyers know if their best interests are being represented by a company that owes a portion of their business to the entity that is supposed to adhere to the City’s approved plans. Developers have many methods of creating financially beneficial cost cutting that the City Inspectors fail to catch and the City can not in any way be held liable for the builder’s failure to comply with the approved plans. That leaves it up to buyers without experience to determine if the developer is fulfilling all the requirements and to catch items left undone or incomplete. It’s difficult to count on the Management Company to catch the builder’s failure to perform because they don’t want to alienate a source of business revenue and lack the time. The City can not be held liable for work that is not done according to the approved specifications. This is where a proponent of the Owners becomes invaluable, as your proponent they have the objective to catch failures to perform before these issues become the Association’s future nightmares. Associations are well served having a knowledgeable Owner representative to make sure the buyers are not being shortchanged by developer omissions or cost cutting.
At one Association I managed, the developer failed to install root guards around Mellaleuca Trees as required in the approved plans. If the developer had installed them at the proper time, the cost would have been about $8,000. Just as the developer’s 10-year statute of limitations expired, the trees began uplifting concrete and asphalt as well as invading the plumbing. The solution cost the Association over $100,000 dollars to install the guards after the utilities and pavement was in place. Another example involved the developer’s failure to properly prepare a rocky slope for landscaping as per approved plans, they just purchased inexpensive plants days before the final walkthrough. The Association signed off and the plants died quickly. In order to make the slope suitable for permanent landscaping, the Homeowners Association spent almost a quarter million dollars, the developer saved about $200,000 using this method without liability.
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