The Developer Turnover — Why HOAs Should Act Early to Protect Their Rights
The Critical Moment: Transition from Developer to Homeowners
When a new condominium or planned community is completed, the developer typically controls the HOA during the early phase of the project. As homes sell and a majority of units or lots transfer to owners, control of the association shifts from the developer’s appointees to the homeowner-elected board.
This “transition period” is one of the most important — and risky — times for an HOA. It’s the first opportunity for the board to act independently to review how the project was built and whether any construction defects or maintenance issues exist.
Common Issues That Surface After Turnover
The following problems often emerge soon after the developer hands over control:
Water intrusion from balconies, windows, or roofs
Cracking in stucco, concrete, or foundations
Improper drainage causing standing water or erosion
Mechanical system failures (plumbing, HVAC, electrical)
Incomplete or missing maintenance records
Deferred repairs that were never properly funded by the developer
These issues may be early warnings of deeper defects — but without proper investigation and legal guidance, an HOA may miss the opportunity to pursue the responsible parties before statutes of limitation expire.
Why the New Board Needs Independent Legal Counsel
If any of the early warning signs exist, the new board should promptly retain independent legal counsel experienced in construction defect and HOA law — not the law firm that represented the developer during setup.
Here’s why:
The developer’s counsel and consultants owe duties to the developer, not the association.
There may be conflicts of interest when evaluating construction quality or warranties.
Legal counsel can help the new board review records, retain experts, and preserve critical deadlines for defect claims under the Right to Repair Act (SB 800) or other laws.
Having the right attorney early ensures that the HOA is acting in the best interests of the homeowners — not relying on information prepared by those responsible for the project’s construction.
What the Attorney Will Do During Transition
An experienced construction defect attorney will:
Review Developer Records: Examine contracts, warranties, maintenance manuals, and turnover documentation to identify missing or incomplete records.
Coordinate Expert Inspections: Retain engineers, architects, and other specialists to inspect common areas and building systems — under the attorney’s direction to preserve the work product privilege.
Evaluate Potential Defects: Determine whether observed issues may stem from design or construction defects.
Preserve Evidence and Deadlines: Ensure that statutory notice and claim procedures (like SB 800) are followed before time runs out.
Advise the Board: Help the HOA make informed decisions about warranty claims, repairs, and communication with the developer.
By engaging counsel right away, the association can begin building a confidential and privileged record of its investigation — something that cannot be done if the manager or board hires consultants directly.
Why Acting Quickly Matters
Under California law, deadlines for construction defect claims begin running when defects are discovered — and they can expire in as little as one to ten years depending on the type of defect.
If the HOA waits to act, it may lose its ability to recover repair costs from the developer, builders, or insurers.
Bottom Line – The developer turnover period is the HOA’s first — and best — chance to protect homeowners’ investment. If there are signs of potential construction defects, by hiring experienced construction defect counsel early, the association can conduct a privileged investigation, identify potential issues, and preserve all available claims before it’s too late.