Every new HOA starts under the control of its developer. At some point, control passes to a board elected by the homeowners. That handoff, called turnover or transition, is one of the most consequential moments in an association's life, because what the new board inherits, or fails to inspect, can shape the community's finances for years. This guide explains how it works and what the incoming board should demand.
Not legal advice. Turnover triggers, deadlines, and developer obligations are heavily state-specific. Engage an attorney experienced in association transitions.
During the early life of a community, the developer (the declarant) typically controls the board so it can finish building and selling. Turnover is the point at which that control transfers to a board elected by the homeowners. From then on, the owners run their own association.
The trigger is set by the governing documents and state law, and it usually takes one of two forms: a sales threshold, such as when the developer has conveyed a defined percentage of the units, or a time limit, such as a maximum number of years after the first sale. Many states impose a backstop deadline regardless of sales pace. Check the declaration and your state statute for the exact trigger that applies to your community.
Turnover is the moment to collect everything the association owns and is owed. The incoming board should receive and review:
Two problems sink more post-turnover boards than any others. The first is an underfunded reserve: a developer may have kept dues artificially low to ease sales, leaving the new board facing increases or special assessments. The second is construction defects: claims often carry strict time limits, and a board that does not inspect promptly can lose the right to pursue them. Address both early. See our reserve study and annual budget guides, and our how to start an HOA guide for the broader lifecycle.
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or start your free trialDeveloper turnover, also called transition, is the point at which control of the association passes from the developer (the declarant) to a board elected by the homeowners. It typically happens after a set percentage of units is sold or a set time passes, as defined in the governing documents and state law.
It varies by state and by the governing documents, but turnover is commonly triggered when the developer has sold a defined percentage of the units, often somewhere in the range of 75 percent, or after a maximum number of years. Check the declaration and your state statute for the exact trigger.
At minimum: the governing documents, complete financial records and bank accounts, the membership roster, vendor and insurance contracts, warranties, as-built plans, a current reserve study, and any permits. A transition review by an accountant, engineer, and attorney is strongly recommended.