HOA Nut House

If its one thing I have noticed about all the issues I read in these blogs is that there is a seedy incestuous relationship between Developers, rental management companies (owned by the developer???) and Association Boards. My latest task verify whether or not the Developer of our Condo Association has the right to Appoint a director to the Board I will submit the post for your enjoyment.

First to you question Gene:

I do not know how it was handled or if it was even an issue and if it was an issue whether or not it was even addressed.

I was discussing this topic with other owners yesterday while reviewing the tax records and realized my argument may have been slightly off point.

While I focused on the sales issues and the fact that Boyne does not have any units for sale I realized that according to the tax records the Boyne Properties Inc the Developer only owns two units in the Mountain Grand Lodge. I feel that it would be safe to say that they own less than 10%.

Thus making the sales issue a mute point.

Now the Mountain Grand Lodge and Spa (AKA Stephen Kircher) owns 24 whole units and 11 quarter units, However according to the Bylaws and master deed the Mountain Grand Lodge and Spa is not the Developer.

Now Boyne Properties, Inc may be and investor or partner in the Mountain grand Lodge and Spa but that is irrelevant.

The Bylaws specifically state the Developer not the Developer and Partners or companies that the developer has an interest in etc.

"the developer shall have the right to designate at least on director as long as the developer owns and offers for sale at least 10% of the units in the condominium or as long as 10% of the units that remain may be created."

So we know the Lodge is built and no more units can be created.

We know that the developer only owns 2 units in the Mountain Grand lodge.

Folks:

When the Master Deed was first recorded (prior to the start of construction) Boyne Properties, Inc. was named in the Master Deed as the Developer, but in 2003 prior to the sale of any units title of all units was conveyed to the Mountain Grand lodge and Spa, LLC (MGL&S. The Michigan Condominium Act (section 135) automatically makes MGL&S a successor Developer. Also, the second amendment to the master deed recorded in 2003 stated that MGL&S was assuming the role of Developer for the project. Then all sales of units were by MGL&S to the new co-owners. MGL&S is the Developer and still owns enough units to have a representative on the board. We have selected Cindy Johnson as the Developer Board representative. Cindy's financial background will be a good resource to the Board in helping control costs and grow occupancy for the MGL&S.

All of the residential units held by the Developer are for sale. In consideration of co-owners in the MGL&S that have their unit up for sale the Developer has withheld aggressive marketing and advertising of Developer owned residential units. To advertise all Developer residential units for sale would bring the number of units for sale in the project to number that would diminish the values of project as a whole.

I assure all co-owners that we are doing our best each and every day to run the MGL&S facility as efficiently as possible. We don't mind being held accountable and are always open and appreciative of comments and suggestions from co-owners on how we can continue to improve.

Ed

Ed,

Thanks for the update and clarification on the developer and successor developer. You will have to forgive my misinterpretation. Apparently, when the Developer sold me my unit they did not feel it important enough to give me a correct and complete copy of the condominium documents.

Maybe you could be so good as to send me a complete and updated hard and electronic copy I will post the electronic version so that all owners can be sure they are reading the right documents. This will certainly help to reduce any future misinterpretations. On the topic of sending stuff we never received a breakdown of the packages like you promised us, do we have an expected delivery date for that?

I guess that brings us back to my original argument then about the exact wording and intent of the bylaws. The developer under whatever name he would like to use does not have the right to appoint a director to the Board just because he owns the required number of units. The units as stated in the Bylaws must be for sale.

You state that all of the residential units are for sale. Do you have documentation to support this? Have the units been rented to guests? Has the developer received income from these units? If the developer has received income from these units then they are no longer new. If the units are no longer new and are not for sale then the developer has taken ownership of the units (not just post development possession with intent to sell) making his possession no different from any other owners. By taking ownership of the units and not continuing to have them for sale the developer loses his right to appoint a director to the board.

Now I know you stated that out of consideration for owners who have their units for sale the developer has withheld aggressive advertising and marketing. However, Ed I am going to have to call B.S. on that statement.

First, the developer through his real estate company has been marketing and advertising in the lobby of the hotel since the doors opened. Some owner’s tried to sell their units through the real estate company owned by the developer, however the real estate company would not sell them, or is it could not sell them, because they were too focused on trying to sell the new Creekside development (kind of like steering in real estate terms). Now I could digress and go into supply and demand as affected by new developments (like the chalets) and the effects it has on property values, rental income / heads in beds, but I can start a whole other discussion on that, so I won’t.

I will digress to point out that the developer did use false and misleading statements and documents during the original sale of MGL units; Is that what you meant by aggressive marketing and advertising?

Let’s review on your statements regarding the value of our units. You stated that if the developer markets for sale the units all the units he has, all our units will decrease in value. Well that implies that we overpaid to begin with (the benefits of aggressive marketing and advertising I guess?). It also implies that the developer in order to manipulate the market in an attempt to price fix Boynes real estate market pulled units off the market or never released for sale certain units.

And further digression:

Ed, when you asked to be part of this group, you asked, as a representative of Boynes interest. So let me ask you. Are you representing Boyne or The Mountain Grand Lodge and Spa? Or are they one in the same?

I realize your job is to manage the hotel and some of the issues and questions presented here are beyond your scope of authority. Unfortunately you have been tasked you with the chore of addressing said issues presented in this forum so the accountability is yours. If I am misguided in this respect please clearly define your role and responsibilities as the relate to the MGL.

I am glad the developer has selected Cindy Johnson as the replacement for Phil Jones. Is there any explanation for the sudden departure of Mr. Jones? Owners have right to know why Directors are replaced or removed.

Your assurance is to the effort you put forth in running the hotel is always appreciated and acceptance of accountability is always reassuring.

I will continue to question Boyne/MGL&S actions on all fronts as I will question actions of the Board of Directors. Unfortunately for the owners the MGL&S or Boyne realty or Boyne Properties INC. and its affiliates have developed a pattern of behavior that requires owners question their actions.

To Gene's point maybe a Laywer or Judge should review our situation.
Fellow owners,