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Category: Real Estate Law
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Can the Delarant (The Developer) of a housing development legally

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Can the Delarant (The Developer) of a housing development legally authorize amending the Covenants he created via a letter prepared and adjudged by his attoney of record to a legal act?

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First, the North Carolina Planned Community Act, Chapter 47F of the General Statutes, provides the enabling legislation for the creation of HOAs. It is not optional. If there are more than 20 lots in a planned community, there must be an HOA. The act specifies the powers of an owners’ association. They basically are two: (1) manage the common areas, and (2) enforce the covenants.

From developer originationn to the transition over to the HOA:

HOAs typically pass through two phases. The initial phase is during development. The developer—known as the “declarant” in the law and the covenants—has exclusive control during this phase. The declarant appoints the HOA board, sets and modifies the rules, determines the HOA fees, hires a management company (if one is needed), determines when common areas will be transferred to the HOA and has the authority to determine or overrule any decision recommended by the HOA board.
The declarant’s authority continues until most of the community is built. In some cases, that can be until the declarant has sold every parcel of land or transferred it to the HOA. For most people buying into an HOA, the optimum situation would be to find a developer who is a benevolent dictator—a reasonable person who wants to do the right thing and build an attractive, workable community using his rules.

Once the developer is out of the picture, residents do run the HOA—often with the help of a professional management company. The HOA board has additional protections in North Carolina from incorporation as a non-profit under Chapter 55A.
Section 47F, combined with Section 55A, allows board members to dictate all the rules, including those for succession and election to the board. A board can perpetuate itself year after year and use the CC&Rs and weight of law to block any opposition.

So, yes, the declarant can make those amendments.
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