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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 115464
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Deane The problem is a developer turning over a sewer system

Customer Question

Customer: ***** ***** Deane The problem is a developer turning over a sewer system that serves two neighborhood HOAs. It is twenty to thirty years old. The system came with 10K debit and is in deplorable condition requiring hundreds of thousands of dollars to repair at this point. Twice fines have been levied to the HOA for inadequate standards of discharge by the county.
JA: Thanks. Can you give me any more details about your issue?
Customer: The ownership was transferred in May 2015. The state is North Carolina. The system is on the grounds of a Trailer Park, who's HOA the system was transferred to with no notice, meeting or legal representation by lawyers for the HOA.
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Customer: Can I get back to you at a better time for me.
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Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
What do the covenants and bylaws of this association state about the developer turning over the system to the association?
Customer: replied 1 year ago.
I don't believe there is anything in the bylaws about it which were written by the developer.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Please do not "think" you need to check your CC&R (your covenants) and your bylaws both to see what they say first and then we can proceed.
Customer: replied 1 year ago.
Sorry for my inattention, I was experiencing PC gremlins. There is two HOA on the sewer system. There is nothing in the bylaws of my neighborhood HOA. I need to check with an officer of the other HOA that has the system on there grounds to find out if anything is in there bylaws. They are the ones that had everything turned over to them and have been trying to pay the monthly bills and fines since 5-2015. Our HOA has not had any correspondence with them until the last month when they informed us about this mess that was dropped on them. The monthly sewer fees don't cover the bills, debit payments and fines. They are presently robbing from Peter to pay Paul monthly. I will contact you Monday with more information. Bruce
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Please do, because the developers generally turn over everything to the association once the majority of the lots are sold.
Customer: replied 1 year ago.
Nothing written in bylaws in regards ***** ***** of HOA or sewer system of our partnering HOA. Bylaws are very basic and general.
Expert:  Law Educator, Esq. replied 1 year ago.
What about the covenants? The covenants filed with the state?
Customer: replied 1 year ago.
I don't know for sure if the covenants were filed with the state for either of the HOAs involved. The other development was built in 2000-2001. A HOA wasn't formed by the developer until 2006. The developer is very lax in every way. He didn't know which houses were on the sewer system in my neighborhood and which had septic systems. Neither of the two HOAs function normally with regular meetings, proper procedures etc. The other HOAs bylaws only mention the sewer system stating a private system is provided. He lives just in front of the other development. They couldn't get him to meet with them for a year until there lawyer got involved. They have had two law firms working for them and they both state what he did was legal. Can I get in touch with the state to find out if the covenants were filled?
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
To have a valid HOA he has to file the covenants with the state. However, if the association has accepted the sewer system, then they become liable to make repairs to or upgrade the system and that means they can assess the owners for these costs. So the members need to step up through the bylaw process to pass a bylaw to not allow the board to accept the system and leave it with the developer. If not, the members could sue the association as well for breaching their duty to the association by taking on such a damaged system from the developer.
Customer: replied 1 year ago.
That answer doesn't make sense. The board already excepted control of the sewer system.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
It actually does make sense, if the board ACCEPTED the control over the system, then the HOA is liable for the system, but my answer actually covered both scenarios accepting or not accepting the system yet. As you re-read the last line of my answer, if they took on a damaged system from the developer without making an investigation or getting the developer to agree to pay for repairs as part of the deal, the board can be sued for negligence and breach of fiduciary duty to the association and members, since they had a duty to not harm the HOA and taking on such a damaged system causes harm to the association and members.

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