Definition
The formal process of transitioning HOA control from the developer to resident-elected boards. This transition includes establishing reserve funding and selecting management companies.
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Transitions occur when construction completes and sufficient properties are sold. Developer-controlled boards transfer to elected resident boards. Transitions include certificate of occupancy issuance, reserve funding establishment, and management company selection. Proper transitions prevent disputes and governance problems.
Pro Tip
In new developments, confirm when the transition happens. Transitions often involve reserve fund establishment and fee increases.
Example
A HOA transition occurs when 75% of units are sold, allowing residents to elect board and assume control.