Taking over the control of a homeowners’ association from a developer is one of the biggest milestones for a community. However, the transition can be tricky without proper guidance, especially when it comes to knowing which HOA turnover documents you will need to complete.
What are HOA Turnover Documents?
These documents are records and materials that the developer transfers to the HOA board during the transition of control. These records generally provide all the information the newly elected HOA board would need to govern the community.
The required documents can depend on state law and the HOA’s governing documents. Usually, developers provide the new board with the necessary association records, including financials, instruction manuals, and warranties, among others, that may relate to the common properties.
HOA Developer Turnover Documents
During the transition where the board expects a complete developer handoff, the documents turned over should reflect how the HOA was developed and how it operated up until that point.
It should also provide the board with up-to-date information they need to ensure that the takeover is successful and has no room for mistakes.
Here are the turnover documents your HOA board should expect:
Governing Documents
The first, and probably most important, set the board should receive during the handoff is the HOA’s governing documents. These generally include the association’s CC&Rs, bylaws, articles of incorporation, and any existing policies.
Along with these, the developer should also include all the adopted amendments made to these documents, if there are any. If these are missing during the turnover, the board may get confused and have a different idea of how assessments, maintenance oversight, financials, and other functions should be done.
The governing documents provide the foundation of the elected board’s authority. It also usually outlines how the community must be run and governed.
During the handoff, the board needs to confirm that the documents they got matches the HOA’s current recorded govenring document.s
Meeting and Corporate Records
During the developer transition, any meeting minutes and other corporate records should be turned over to the newly elected board.
These documents, especially the meeting minutes, help the board understand how certain decisions were made. They also outline any pending issues and ongoing commitments the association may have while in the developer’s control.
In cases where directors appointed by the developer are stepping down as part of the transition process, this should also be reflected in the corporate records, specifically the resignation records.
Financial Records
Another important document to turn over is your HOA’s financial records. This should be provided immediately, as the elected board of directors will also be responsible for the money going into and out of the association’s accounts.
Part of these records are the financial statements covering the developer control period. It should also include bank records, ledgers, the current budget, reserve information, and tax information.
During the handoff, the developer should also identify and disclose any outstanding obligations. The assessment records should indicate any unpaid homeowner balances and other amounts owed to the HOA.
Beyond the records, the developer should also transfer control of all bank accounts to the new board.
Contracts and Vendor Information
Another HOA turnover document that the developer should hand off involves contracts and other vendor information. These documents usually include management agreements, employment arrangements, landscaping contracts, and maintenance agreements, among others.
The new board, however, should remember that existing contracts don’t necessarily end when the transition happens. Some contracts may renew automatically, while others may require advance notice before termination.
When receiving these documents, the HOA board should review them and check the dates, provisions, the work performed, and any associated payment obligations.
In addition to contracts, information about hired vendors should be provided. These may include your contractors’ contact information. Additionally, vendors should be notified of the transition to ensure continuity.
Insurance Policies
The developers should also hand over any current insurance policy covering the association. The board needs access to all policy documents and all insurance information.
Once these records have been provided, the HOA board, along with an insurance expert, would need to review the policies. They will need to check whether the policies still cover what the HOA needs to be protected.
If there are missing insurance documents, things can get tricky in the event of incidents following the transitions.
Construction Records
As part of the transition document package, your developer should also provide all records regarding construction and maintenance. These may include plans and permits.
The HOA board should have the as-built plans immediately, as they provide information on whether improvements were made compared to the original build.
Warranties and Equipment Information
For any equipment or common-area components that the HOA handles, the developer should provide the new HOA board with information on how to operate them and their warranties.
From these, the board can identify the key requirements for maintaining any warranty coverage. The documents should also indicate when the warranties have expired. It should also indicate which components need maintenance soon after the transition.
Owner and Membership Records
Of course, the incoming board should also have access to information about homeowners. As such, it needs access to accurate membership records.
Having these records is crucial in managing key HOA functions and obligations. The information found in them is needed by the board in multiple ways, including sending notices and collecting dues.
Once they receive them, directors need to verify that the membership list is up to date during the transition.
Additionally, after receiving them, the board should ensure these records are handled properly. They need to be stored and managed in accordance with the applicable privacy requirements.
What Should the Board Do if Documents are Missing?
Once receiving an HOA transition documents package from the developer, you must immediately create a written inventory. Doing this will help your board spot missing HOA developer turnover documents as soon as possible.
If any documents are missing, the HOA will need to request that the outstanding records be provided immediately. This should be done in writing so that the association will have a clear record of requests and whether the developer responded.
Smooth Transitions
Receiving HOA turnover documents is only the first step. A thorough turnover can help directors identify missing information early and give the homeowner board a stronger foundation for managing the community.
CWD Group offers HOA developer transition services to community associations in Oregon and Washington. Call us today at 503-488-2008 or contact us online!
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