Ask the Attorney
Q:
In our association, we are still being run by the original developer (declarant). When does that end? What does the declarant have to turn over to the board? Do we need to remove the references to the declarant in the declaration?
by Nigel H. Mendez, Esq. | Carlson & Associates, Ltd.
This column is comprised of questions that have been posed to me by homeowners, property managers and related professionals regarding legal issues that they have encountered with respect to their associations. Discussion of these questions, as well as prior questions, can be found on the CAI-MN LinkedIn page: www. linkedin.com/groups?gid=1769135
A:
Minn. Stat. §515B.3-103(c) states that a declaration may provide for a period of declarant control. During this time, the declarant, or a person designated by the declarant, may appoint and remove the officers and directors of the association. However, this control does not continue indefinitely. The period of declarant control will end upon the earliest of: (1) If the association is a flexible CIC1, five years after the date of the first conveyance of a unit to an owner other than the declarant; (2) If the association is not a flexible CIC, three years after the date of the first conveyance of a unit to an owner other than the declarant; (3) upon the declarant’s voluntary surrender of control, which is performed by giving written notice to the unit owners; or (4) the conveyance of 75 percent of the units to owners other than the declarant2. Within 60 days of one of these four events occurring, the existing board shall call a meeting of the unit owners to elect a new board3. At that meeting, all unit owners are entitled to cast the votes allocated to their units — this includes the declarant being able to vote for each unit it still owns4. Unless approved by a vote of the unit owners other than the declarant, the majority of the directors elected at this meeting must be unit owners other than the declarant5. The declarant can have representatives on the board, but it is no longer allowed to control the board, unless the members vote to allow that to continue. 1 A flexible common interest community is one in which additional units may be added to the existing association. 2 This percentage shall be calculated by using as “a numerator the number of units conveyed and as a denominator the number of units subject to the declaration plus the number of units which the declarant is authorized by the declaration to create on any additional real estate.” Minn. Stat. §515B.3-103(f ). 3 Minn. Stat. § 515B.3-103(d)(1) 4 Minn. Stat. § 515B.3-103(e) 5 Minn. Stat. § 515B.3-103(e)(1)
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Minnesota Communit y Living