The condominium structure has been built, the infrastructure and amenities are in order, and unit owners are starting to buy – it’s transition time. And while it may seem inevitable that control of a condominium will somehow shift from a developer to an association of the unit owners, failure to attend to many crucial considerations can lead to inefficiency, uncertainty, and contentiousness between all the parties involved. This article explores some of the transitional matters involved in the process, and suggests ways to ensure a smooth handoff from developer control to unit owner governance.
Condominium Creation and Transition
The person creating the condominium is known as the “declarant,” but is more commonly referred to as the “developer.” The developer can record a Master Deed before, during, or after the actual construction of the building, and the developer does not actually convey any property through the recording. Typically, the by-laws of the Declaration of Trust authorize the developer to appoint the initial trustees, allowing the developer to control the operation and management of the condominium during the developmental phases. These by-laws will also generally regulate the transition from a developer-controlled association to a unit-owner controlled association.
Unlike many other states, Massachusetts does not regulate the timing of the transition from developer to unit owner control. Usually, however, the by-laws will provide for a “triggering event” that sets the time limit on the transition of control to a unit owner-controlled association. Quite often, the triggering event will be some combination of the amount of units sold and a specified period of time.
For example, the by-laws could establish: