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By CondoAssociation.com • April 7, 2018

New HOA worries about liability regarding developer

We have a controversial issue going on within our HOA at this time in that it was recommended that we carry insurance protection for our BOD's, this was recommended by the developer who has been quite controversial as to how he makes his decisions. Right now, we know that he is not in good graces with the city that our HOA is located in. He's battling them to have his bond money returned to him so he can start building again. They've tried to tell him that until he completes our subdivision, the county will not refund the money to the city so it can be returned to him. He's not provided things like landscaping, lights, signage at our entrance, fire lane markings on the roadway and several other items that he agreed to before having his proposal approved by the city.
The city is saying that until he pays for them to send a camera through the sewer system to make sure nothing got into it to create any blockage, they will not release his bond money. Now he says that he'll sue them if they don't release it. Speculation is that there is something wrong and he wants this insurance policy in place to protect him in the event that the city finds something in the sewer system so us as homeowners don't come back to sue him. The insurance policy would have to pay for any damages. Not sure how that works but I do know that he's a slippery piece of soap and not a clean on either.
So the other BOD's are wanting to table the decision of adding this insurance to our all ready high insurance premium. The question is: can they table this decision until more information is gathered to make a sound decision and can they make this decision without having all the co-owners vote on this?
We are a small HOA (only 5 homes as of now) located in Michigan with 2 vacant lots not yet sold. Also, how do we know if there is an ombudsman that we can contact for help on our issues with this developer? He says that he has control over us until he gets past the sales and construction part of our subdivision. He has two lots left to sell but doesn't seem to be in any hurry to sell them due to the price on these lots (more than twice of what they are valued at). He's been offered fair market value but walked away from them on several occasions.

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Please note that blog comments and postings are not legal advice, rather only the opinions of our readers.

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