A Primer on Declarant Transfer of Control to Association

Image result for transfer imagesThe topic of when the developer plans to transfer control of the Association invariably comes up at the Annual meeting. It is understandable that Members want to know when they can take control of the Association. If the subject comes up in the future, Members will be referred back to this post for answers.

The Village is an Arizona planned community, and planned communities have no statutory limitations regarding transition from the developer (“declarant” under the CC&R’s) to owners/members. Each planned community’s documents control. The Covenants, Conditions and Restrictions (CC&R’s) for each unit in The Village contain an article pertaining to declarant’s rights. Before close of escrow, each Member was given a copy of the CC&R’s. For the convenience of Members, the CC&R’s for all units are on the Village People website under the Documents, Forms and Downloads link.

The language in each document is essentially the same. Until all of the Lots within the Village have been conveyed to ultimate purchasers, any and all rights and authorities granted to the Association shall remain in Declarant. Additionally, the membership in the Association by all other Owners of Lots shall be non-voting.

The Board has considered how to address the transfer of control when the last lot has been conveyed to the ultimate purchaser(s). A process has been determined and is as follows:

  • Board of Directors will appoint a three to five member Transition Committee
  • Reserve Study will be updated if older than two years
  • The financials will be audited by a Certified Public Accountant
  • The Transition Committee will review all pertinent information regarding the Association
  • When the Transition Committee is satisfied with the information, statements of interest will be sent out to owners and those interested in running for the Board will return them by the deadline date
  • Ballots will be sent out with the names of those interested candidates
  • Annual Meeting will be held
  • Declarant Board will conduct Annual meeting
  • After other business, an election vote will be conducted and ballot results will be announced
  • Control of the Association will be turned over to the new Board

The process allows for an orderly transfer of the Association to the Members. The bylaws govern the Association. That document covers the number of directors and how the officers are elected. The bylaws can be found on the Village People website under the link for Governance. You are encouraged to review the document for any questions about how the Association operates.

Unfortunately, there is no accurate way to determine when the last lot will be sold. At this posting, there are less than forty lots owned by the developer. A lot of hard work has been done over the years to get the lots sold, including the reduction of lot prices to under $10,000 to entice buyers. The transfer of control of the Association will begin as soon as lot sales conclude.

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5 thoughts on “A Primer on Declarant Transfer of Control to Association

  1. Any idea when the lots in the Mountain Lodge that are designated to have shared car ports will be advertised for sale?

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  2. I agree It would be nice to know how many lots still need to be sold and if these lots are on the market and available now? Maybe a listing of unsold lots could be presented at the meeting.

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