INDUSTRY FOCUS
INDUSTRY FOCUS
HERE ARE SOME OF THE MORE IMPORTANT GUIDELINES.
• Draw up governing documents that focus on the developer’ s right and ability to control the development of the project and sale of the units, rather than to control the board, and that enable rather than impede the business.
• Create a governance structure that encourages involvement by owners and other residents.
• Include the appointment of a transition team in the governing documents. A transition team of owners assures other owners that the directors appointed by the developer have managed the affairs of the community properly.
• Include alternative dispute resolution in the governing documents.
• Keep scrupulous financial records during the period of developer control, with annual audits, and a clear segregation of association funds and employees from developer funds and employees.
• Consider appointing an owner board member to serve as treasurer before the transfer of control, in order to minimise the concerns of the owners, and to encourage better discipline in keeping the association’ s books.
• Avoid using association employees for developer work such as the completion of“ snag-lists”, the preparation of properties for sale or property maintenance.
• Conduct construction contracts, sales and marketing in such a way as to minimise the possibility of litigation.
• Ensure that there is no gap in insurance cover at any stage of the transition process.
For a full report please contact louise @ estate-living. co. za
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