RealManage Insight

What to Do After a Developer Relinquishes Control

by Amanda Causey on Jan 7, 2015 8:00:59 PM


A community is often managed by its real estate developer until board members from the community are ready to handle management duties. The developer relinquishing community governance to board members is one of the most important events for any planned community, as it signifies financial autonomy. To make the transition as seamless as possible, board members should consider taking the following steps after the developer relinquishes control.

Choose a Management Provider

After the board takes control of the community, it should hire a condo management provider that provides essential services that many board members cannot, such as professional financial investing, project management, and legal advice pertaining to community issues. With the provider handling these services and others, board members have more time for other duties.

Perform a Financial Audit

When a developer governs a community, it typically has access to the community’s financial accounts. Consequently, it is important to perform an audit after the transition of governance occurs. Board members or the condo management provider should examine the community’s financial records to make sure that the developer didn’t inadvertently put money toward unrelated expenses.

Retain an Attorney

Some management providers offer legal advice. If the management provider for your community is not one of them, the board should ideally hire an attorney. In addition to handling the daily legal needs of the community, the attorney will also assist with perfunctory legal issues that pertain transitioning the community from being managed by a real estate developer to being governed by a board of directors.

Physically Inspect Property

The community should hire an experienced architectural engineer to inspect common buildings in the complex to ensure that there are no problems that should be brought to the attention of the developer. The engineer can also project the cost for maintaining and repairing buildings over the course of time. This information helps the community establish a properly funded reserve fund.


After a developer relinquishes community governance to a board of directors, taking the measures above helps new, association-governed communities start off on the right foot. For more information about the process of transitioning the management of a planned community from the developer to the community’s board of directors, contact a condo management company today.

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