Several Country Club residents have expressed their concerns about when turnover occurs and what they can expect when that happens. Hopefully, this post will provide you with some detail. I have not reviewed the Hampton Lakes Declaration, but it is probably similar.
After reading it, you may have concerns and want to know what actions, if any, the residents can take now to protect their interests and avoid any negative consequences as the turnover process takes place. Those potential actions will not be posted online since that would be like a football coach posting his game plan before an important game. With that said, I will be more than happy to discuss any potential courses of action with any residents who are interested.
This post on turnover, and the subsequent one on the golf course, will refer to various sections of the “Declaration of Covenants and Restrictions for River Hall Country Club”, which will be referred to simply as the Declaration.
Bear in mind that the Declaration is a legal document. Therefore, the language can be somewhat confusing. I will do my best to clarify the language, when necessary. Some of this information may be boring to some but should be of interest to any and all Country Club residents who are looking ahead.
Article VI of the Declaration is titled “Membership and Voting Rights”. Paragraphs 2a and 2b describe the two different membership classes, A and B. Class A members are individual lot owners, who are entitled to one (1) vote for each lot owned by the lot owner. The Class B member is the Developer, “who is entitled to five (5) votes for each Developer-owned Lot existing or ultimately planned or proposed for the development within all phases of the Project.” One can now see why the Developers of projects initially control what happens, and when, in the developments they control.
Paragraph 2b of Article VI describes when the Class B membership ceases, and those memberships are converted to Class A memberships, which means those memberships will then be entitled to just one vote per lot, and not five as the case before turnover. The transition from Class B memberships to Class A memberships occurs when turnover to the residents takes place. At that time, even if the Developer controls most of the lots, it only has one vote per lot.
Unfortunately, some River Hall Country Club residents believe that even after turnover, a Developer can control everything because it will still have five votes per lot. Those residents are obviously incorrect, since the Declaration clearly points out that the ability of the Developer to cast five votes per lot ceases at turnover.
In addition, Paragraph 3 of Article VI clearly states that once the Class B memberships are converted to Class A memberships, the Developer cannot use the votes assigned to those lots to re-take control of the HOA or elect a majority of the members of the HOA Board.
Following turnover to the residents, the landowner is entitled to elect one member of the HOA Board as long as it has for sale at least five percent (5%) of the lots ultimately planned or proposed for the development in all phases of the project.
According to the Declaration, the Class B membership ceases, and turnover to the residents takes place, when one of the following first occurs: (1) When 90 percent of all lots ultimately planned within all phases of the project have been conveyed to owners who are not the Developer, i.e., individual homeowners; (2) Twenty years from the date the Declaration was recorded; or (3) the effective date of the Developer’s written waiver of the Class B voting rights, i.e., when the Developer voluntarily gives up control.
The Declaration was recorded on December 6, 2005 at 10:47am. The instrument number is 2005000153067. How is that for detail? Twenty years from that date is obviously December 2025, a date which will approach faster than one thinks.
Section 720.307 of the Florida Statutes covers turnover of HOA’s to residents and provides additional details about when turnover can occur. I will not offer specifics about that statute, but if you choose to read it, simply Google Florida Statutes 720.307.
What is not mentioned in either the Declaration or the statute is another way for turnover to occur. A judge can order it for various reasons, which I will not go into here.
Many resident questions center around when they will acquire control of the golf course and Amenities Center. In theory, that should occur at the same time the various associations are turned over to the residents. However, since neither the golf course nor the Amenities Center is owned by their respective associations (as they should be), and instead are privately owned by the person who purchased the River Hall assets, the timing of turnover to the residents is unclear.
The next post covers turnover as it relates to the golf course.