Condominium Owners May Seize Control…
Condominium Owners May Seize Control
of Developer Controlled Associations
By: Thomas E. Cardone, Esq.
Generally, condominium associations are governed by owner-elected boards of directors. New communities, however, are controlled by the developer or “declarant”. During developer control, the developer has the right to appoint and remove the members of the association’s board of directors. Sometimes, developers are remiss in their duties and fail to govern the association in a manner that is in the best interests of the community. Because the developer’s right to control the association is prescribed by statute and the community’s governing documents (drafted by developer), owners in communities where the developer failed to properly establish or operate the association previously lacked a clear legal means to seize control of their communities. A recent change to the Georgia Condominium Act may provide some relief.
Section 44-3-101(a) of the Georgia Condominium Act provides that the developer’s right to appoint and remove officers and directors of the association occurs upon the earlier of (1) the expiration of any time limit stated in the community’s governing documents; (2) unless the developer has an unexpired option to add additional property, the date as of which units to which 4/5 of the undivided interests in the common elements pertain have been sold and conveyed by the developer; (3) the expiration of seven years after the recording of the declaration in the case of an expandable condominium or three years after the recording of the declaration in the case of any other type of condominium; or (4) the voluntary surrender by the developer of the authority to appoint and remove officers and directors of the association.
A recent change to the Georgia Condominium Act allows owners to cut short a developer’s right to control the association if it fails in its duties to properly govern the community. Section 44-3-101(c) now provides that the right to appoint the board of directors and control a condominium association may pass to the unit owners if the developer fails to do any of the following:
(1) Incorporate the association, as required by O.C.G.A. § 44-3-100(a);
(2) Cause the board of directors to be duly appointed and the officers to be elected pursuant to O.C.G.A. § 44-3-100(b);
(3) Maintain and make available to owners, upon written request, a list of the names and business or home addresses of the association’s current directors and officers;
(4) Call meetings of the members of the association in accordance with the association’s bylaws, and at least annually pursuant to O.C.G.A. § 44-3-102; or
(5) Prepare an annual operating budget and distribute the budget and notice of the annual assessment to the owners in accordance with the association’s governing documents no later than 30 days after the beginning of the association’s fiscal year.
In the event the developer fails to meet one or more of the above obligations, any owner, acting individually or jointly with other owners, may send the developer written notice of the failure to comply and provide the developer with a 30 day opportunity to cure the failure. The notice must be sent by certified mail or statutory overnight delivery to the developer’s principal office. If the developer fails to cure any or all of the deficiencies identified in the notice within 30 days of its receipt of the notice, then any owner, acting individually or jointly with other owners, may file a petition in the Superior Court of the county in which the condominium is located for the purpose of obtaining an order to grant the owners control of the association. The Superior Court has the authority to hold a hearing and issue a summary ruling on the petition at any time designated by the Court not earlier than 20 days after service of the petition, unless the parties consent in writing to an earlier trial. If the owners prevail in the action, the statute requires the Superior Court to award the owners all reasonable attorney’s fees and costs incurred by the owners in the prosecution of the action.