What are a developer’s rights to useHOA assets?

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What are a developer’s rights to useHOA assets?

The developer in our community has control of the HOA. He is about to begin selling lots in another phase of the development (not part of the HOA yet) and is renting out the HOA club house to the builders sales agents while pre-selling homes in the new phase. The homeowners don’t want him to use the HOA facilities for this purpose but he said that since he controls the HOA he can do whatever he wants with the HOA assets. Is there a way for the homeowners to restrict him from using our clubhouse as a sales center?

Asked on March 1, 2011 under Real Estate Law, North Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Ok.  Home Owners Association laws are so particular often so bizarre that an entire set of lawyers now sub-sepecialize in them under the general Real estate Attorney heading.  And laws differ so greatly from state to state that you will really have to seek consultation in North Carolina.  I would of course start out by reading the agreement so that you have an understanding of what it says about the rights and liabilities of the parties.  And if in fact he does not appear to have the right then you and your fellow association members need to file an injunction against him to have him stop.  Good luck to you.


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