A Case Study: Transitioning from a Developer to a Homeowner's Association

On October 2005, a developer handed over a subdivision to an individual to implement a homeowner's association. These transitions are best made when a developer and a board work a strategy for the best way to transition. This board was not given such luxuries. What was this new board to do? They are residents, volunteers that have full-time employment elsewhere. Few volunteer residents are educated in such matters. Here is a true story of how a very "green" volunteer board made the best of a bad situation.

This transition did not come because the timing was right. It came because the developer wanted to escape from difficult situations. Residents were threatening to sue and the developer, knowing he was facing legal battles (which he probably would have won), chose to turn the board over to a new entity, a volunteer board.

The board quickly assembled and assessed the situation. They had been given only $126 from the developer. These were not even enough funds to create an association. The board decided to move the annual dues due date to the beginning of the new year to generate funds quickly to pay the lawyer's fees. Moving a dues date is never fully appreciated. However, the board communicated, in full, the rationale for the need of money.

Throughout the transition, the board actively opened a variety of creative communication channels. One of the best communication devices was to develop a subdivision website. The president of the board knew how to construct websites and set on his own to do so. The website featured a number of different communication devices. Probably the most effective tool was a forum. The board put forward a number of engaging topics. Since the developer left the association with some unfinished issues, the board put forward these topics as point of discussion. Clear rules were established so that the discussion would not degenerated into a personal attack on either the developer or board members. Positive discussion was encouraged. Positive discussion was had!

Within six months from the time the developer handed over authority, a website was created for communicating with the residents. For those residents who did not have Internet access, and for those residents who like to meet in person, open chats were held in the living rooms of various board members. These chats were productive, sometimes heated, but generally speaking, raised many issues that opened more discussion on the website forum and helped create a plan for the community to proceed.

It was only after three open chats, six months of website discussion and many hours of meeting people in person that the first plenary subdivision met. This meeting was well attended. If it were not for the open communication, this meeting could have turned ugly as subdivision meetings can do.

For those who are faced with a similar situation, the lessons in this case study should be clear. It does not take a lot of money, experience or an outside management company to correct a potentially explosive situation. It took a few volunteers who understood the importance of communication and opened channels of open communication in creative ways.

Barry Pendley, of Evmikna Graphics, develops subdivision websites.