Transition Best Practices

The general process by which control & responsibilities of the governing board of a community association are transferred from the developer to the persons who bought homes in the community association. Transition is not a single event, such as the election of an owner-controlled governing board or the execution of a settlement agreement regarding construction defects (snags) in the common property. Its a multi-stage process of many events taking place over a period of time.

Transition begins many times as each new owner moves into a community association. This process overlaps occupancy, construction & sales departments.

The Development Process

Prior to the creation of a community association, the developer begins the development process. Once a tract land has been identified, the developer must control of it. Developer will enter into a contract to purchase land, with certain conditions. Once the developer decides to proceed with the project, more detailed engineering plans are finalized.

The Challenges

Construction: Construction is the phase of development on which the board directors generally focuses as they control association. This is the time when the quality of the workmanship and the adherence to plans and specifications can minimize the potential for construction defects to become an issue. Historically, this has also been the point that conflicts with the intent of a builder to obtain the highest profit such that the oversight of the construction may be ignored or minimized, since this may only slow down construction and will cost additional funds.

Governance: A primary component of the transition process is the assumption of responsibility for the governance of the association through control of the board, which is responsible for the operation and administration of the community association and the maintenance of the common property.

Financial Control: A financial accounting and transfer of financial records is another element of the transition process. Usually this occurs when the owners assume majority control of the board.

Maintenance of Common Property by the Association

The assumption of responsibility by the association for the maintenance of the physical assets is another key element of transition. Normally, it does not take place until after 22 owners have assumed control of the governing board, but this should not necessarily be the case, especially in larger projects where the common property can deteriorate for a variety of reasons, including use, improper maintenance, and the effect of the natural elements. Therefore, the actual responsibility for maintenance of the physical property can and should be assumed by the association during the period of developer control to minimize future problems between the developer and owners as to who is responsible for repairs and replacements.