Navigating the Developer Turnover Process: A Complete Guide to Understanding & Managing Your Community's Developer Turnover

The transition from developer control to resident control is a challenging time for any community. Reality is that a majority of people buying into deed restricted community associations don't truly understand the extent to which they are binding themselves to the covenants, conditions, and restrictions inherent to their new home ownership. What's worse, homebuyers purchasing into a community association while still under developer control fail to understand the degree to which the developer maintains control over their community, or the complexity of the process for transitioning to resident control.

Residents living in developer-controlled communities have a natural tendency to assume the worst of the developer's actions and motives. So when the time comes for the developer to hand off an association to resident control (the developer turnover), more often than not, residents feel an overwhelming need to protect themselves and their community from the developer during the turnover process.

The anxiety surrounding developer turnover can be mitigated by better understanding the process and everything that may be involved for the residents taking control. Clarity of association responsibility versus developer responsibility is the basis of any turnover negotiation, and knowledge of your association assets, infrastructure, and equipment will go a long way toward sidestepping typical pitfalls and you navigate the process.

This guidebook is written for the community volunteers that recognize the need for resident involvement and oversight through the turnover process. Those that step up to form early governance for their community during a developer turnover need all the help they can get while planning and preparing for assumption of control.

If your community is a condominium or a homeowners association, this guidebook will provide you detail of all that a turnover committee need consider, both in pre-turnover planning and diligence, as well as post-turnover guidance and business requirements. In addition to the text, readers will find included sample committee charters, board resolutions, cash flow template, document turnover checklists (condo and HOA), infrastructure checklist, turnover committee diligence checklist, post-turnover board business checklist, and more.

This is the complete guide for any brave sole involving themselves in a developer turnover for their community's benefit. The information provided will invariably help educate and organize efforts for all those involved.

About author(s):Matt Leukroth, MBA, LCAM, has been in the property management and developer industries for more than twenty years. After beginning his career in food & beverage management, he began his experiences with developers and property management by spending several years with a public developer of lifestyle and golf club communities. As general manager of several developer owned assets, such as elaborate community town centers, private food & beverage operations, lifestyle amenities, and golf club & course operations, he gained extensive development and operational knowledge of private club facilities, in addition to participation on multiple association boards as a developer appointed director.
During the real estate market downturn, while developers were struggling and making massive layoffs, Matt migrated to the property management side of the real estate arena, working with a large successful state-wide management company. As a regional director of a business unit comprised of mostly developer accounts (many of which being those of the same developer for which he'd previously worked), he gained extensive experience and knowledge in the developer turnover process by working through multiple transitions from the property management and association side of that process.
After several years in property management working primarily with developer-controlled associations, and with recovery of the local development and homebuilding industry, Matt then made a move back to the developer side as an executive with a private developer/homebuilder in southwest Florida. In this role Matt acted as division financial manager, project manager, and association manager for the company's regional development projects. This role provided experience and extensive insight into the developer side of community association development, including document drafting and recording, entitlement and permitting, community planning, land development, and much more. In this role Matt also managed several developer turnovers, but this time from the developer side of the process, adding to the experienced gained previously from managing transitions from the property management and association side of the process, and providing invaluable perspective of how developers plan and manage their potential liabilities through a turnover.
Some years later, Matt again made a career move to join a large, nation-wide property management company as a regional vice president, overseeing a portfolio that did not include any developer accounts. Based on experiences to date, and because there were no developer relationships to maintain, Matt decided to exercise the knowledge gained from prior experiences by working to educate and provide guidance for communities under developer control and attempting to plan for turnover. Matt has done several public presentations on the developer turnover process, all of which have been highly attended and highly commended.
These combined experiences, and perspective, have provided Matt a unique and extensive knowledge base that includes comprehensive understanding of the development process, the mindset and considerations of both associations and developers during turnover, and the many potential pitfalls and potential concerns for associations when working through a developer turnover. All of this experience and knowledge (or at least most of it) he has now compiled into this guide to provide a substantial resource--a resource not often found in property managers or their management companies--for developed community residents anxious about turnover of their community association from a developer.