TRANSITION IS A PROCESS, NOT A SINGLE EVENT.

Transition is not:

1. When property is conveyed to the co-owners.  In the typical condominium, the Association owns no real estate.  Rather, an undivided portion of the common element is conveyed with the sale of each unit.

2.  Mean turnover without any recourse against the Developer.

3.  Mean that all the Developer’s warranties and obligations have been met.

B. Good transition requires:

1. Good Developer and co-owner communication.

2. Good co-owner training in preparation for serving on the Board of Directors, which may include serving on the Advisory Committee.

C. Smooth transition means:

1. No expensive and extended lawsuits.

2. Enhances Developer reputation.

3. A well managed Association with enhances property values

4. A well trained and functioning Board of Directors.

5. The Ideal transition begins at the creation of the project, with the Developer thoughtfully designing the physical layout, the structure of the Association and the involvement of co-owners.

II. FIRST ANNUAL MEETING

A. Election of the first non-Developer Directors.

1. Hopefully those who have served on an Advisory Committee, those with prior condominium experience or those properly educated in the management of condominium.

III. DUTIES OF THE FIRST BOARD OF DIRECTORS

A. Learn how to manage the Condominium

1. Interpretation and enforcement of the Condominium Documents and Restrictions.

a. Set parameters for co-owner modifications and permissible activities.

B. Analysis of the physical aspects of the condominium.

1. What are the common elements, and who is responsible to maintain them?

2. What is the condition of those common elements?

a. A complete inventory of the physical aspects of the condominium

b. Perhaps utilize a survey to the co-owners.

c. Determine construction defects or building code violations.

d. The Board should obtain:

i.  all site plans and drawings from the municipality that were approved for the project

ii. all guarantees or warranties from the Developer or contractors

iii. existing insurance coverages

iv. sales literature or promotional pieces which may contain representations or promises from the Developer

C. Analysis of the Condominium Documents

1. What do they provide?

2. Are they consistent with the project as constructed?

3. Should the Documents be amended?

4. Consolidating Master Deed and As-Built Drawings

D. Analysis of the Financial Condition of the Association

1. Are all of the fees current?

2. What responsibility does the Developer have to pay assessments?

3. Are there adequate reserves?

4. Have the expenses been proper or have the funds been spent on sales or construction efforts?

5. Is the budget adequate?

6. A certified audit is recommended.

7. Obtain complete books of the Association, including financial records, contracts and Minutes (if any).

8. Obtain a complete list of all co-owners and their mortgagees.

9.  Obtain a copy of the construction drawings, if possible.