Homeowner association developers sometimes trip and fall into avoidable "tiger traps". Besides the usual hassles of land use requirements, building inspections, contractor scheduling, quality control and construction financing, there is also a critical component called "transition from the developer to a homeowner controlled board" that too often proves to be full of pit falls for developers. Here’s what often takes place:

The new homeowner Board is usually comprised of well meaning volunteers who want to do a good job but have little experience in managing homeowner associations. Add to this their general lack of information and the developer’s unwillingness or inability to help. Predictably, confusion and suspicion leads to confrontation with the developer. And confrontation too often leads to lawyer jousting. Gadzooks!   So, how can a developer avoid these unsavory results? Here’s a few suggestions:

• Use Management Consultants. Much grief can be avoided by using a knowledgeable homeowner association management consultant from the get-go. For example, management consultants craft real life budgets that take into consideration normal operations and long term reserve needs. Consultants also advise developers on ways to reduce monthly assessments by using different materials or finishes in the construction. Lower assessments make the homes more salable and at a higher price.

• Reduce Conflict of Interest. By using an outside consultant, the developer avoids an inherent conflict of interest that comes from a desire to keep assessments low to make sale prices more attractive.

• Use Attorney Specialists. Like most areas of law, homeowner association law is a specialty. Typically, there are only a handful of attorneys that are actively engaged in it. "Real Estate" law doesn’t cut it. And some specialize on developer issues, while others don’t. See your State Bar Association for referrals.

• Don’t Plagiarize Governing Documents Never use governing documents from another project assuming they are all "boiler plate". Like fingerprints, each homeowner association property is unique and locality requirements vary. State statutes change frequently as well. This demands a specialist attorney to draft original documents that conform to current statutes.

• Avoid High Maintenance Materials. If the association has significant exterior maintenance responsibilities, there are ways to reduce ongoing maintenance, repair and replacement costs and reduce assessments:

  ~ Consider vinyl siding to eliminate need for expensive cyclical painting.

  ~ Substitute architectural composition shingles for cedar shakes. They are much cheaper, have a longer life and much lower maintenance cost.

  ~ Avoid using cedar shingle siding. Again, high maintenance and short life.

  ~ Avoid synthetic stucco (EIFS -Exterior Insulation Finishing System) like the plague. While it looks great, it has a long history of promoting accelerated dryrot and structural problems. For more on this, go to www.eifsinfo.net.

  ~ Decks are notoriously poorly built and cause huge structural damage and repairs. Pay extra close attention to deck design, material, flashing and positive drainage to prevent leaking and dryrot.

• Carefully Choreograph Your Turnover Meetings The meeting where developer control is turned over to a board of homeowners is a pivotal point in time and marks the tone of the future. What happens there largely determines how well the new board handles business. Here are the basics for pointing them the right way:

  1. Assemble all association related information and documents required by state law. For more on this subject, see www.regenesis.net

  2. Request, seek out and confirm director candidates 30-60 days prior to the meeting.

  3. Give ample written notice of the turnover meeting so all owners can attend (30 days minimum).

  4. Provide an written agenda including a slate of nominees for the board and a short bio on each.

  5. Hold the meeting on a week day evening in a nearby facility equipped to hold all owners.

  6. Have a sign-in sheet to verify who showed up and keep a copy in your records. Quorums are necessary for a legal meeting so the record must show that the minimum number of bodies or proxies were present.

  7. Hold the elections of new directors.

  8. Formally turn over all relevant information and documents to the new board at the meeting.

  9. Provide food and non-alcoholic beverages to leave a good taste.

• Provide for Board Training. Providing resources to the new board to get them up and running as soon as possible is a great way to ensure their success. CAI-Community Associations Institute offers educational and networking opportunities to homeowner association boards. Regenesis is the world’s largest resource for homeowner associations with articles, forms and sample policies, books, videos, newsletters and much more.

• Stand By Your Work Leave the new board with the feeling that you will be there to help. Be accessible, especially during the warranty period. Unanswered phone calls stir the pot of discontent.

As you launch your new homeowner association on the road to success, make sure you clear that road of potholes and tiger traps. Above all, avoid falling in a tiger trap of your own making. Remember, mess with a homeowner, you get "the claw"; mess with the Board, you get "the whole tiger".

Published: January 10, 2001

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .