Declarant rights
The developer that built your community kept special powers on paper. Here is what those powers are, and when they run out.
A declarant is the developer that recorded your community's original declaration. During a defined period of declarant control, the declarant, not the elected owners, appoints and removes board members, sets the budget, and approves architectural changes. That period is not indefinite: it ends automatically once a trigger set out in your declaration or state statute is reached.
What can a declarant actually do?
During the period of declarant control, the developer holds rights that ordinary owners never get. It commonly appoints and removes the board's directors directly, rather than owners electing them. It controls the budget and reserve decisions. It also typically holds final say over architectural review decisions for new construction. None of this is unusual or improper by itself: it is how a developer builds and sells the last phases of a project while it still owns unsold lots and has the biggest financial stake in getting the community right.
These rights exist only for a defined window, not forever. New Mexico's statute is one example of how a state spells this out for common-interest communities that fall under it.
How does the control period end?
The period ends at whichever trigger arrives first, and the list of possible triggers usually includes a percentage of lots sold to outside owners, a fixed number of years since the declarant stopped actively selling, or the declarant simply recording a document that voluntarily gives up its control rights early.
The exact percentage, the exact number of years, and even which triggers apply at all vary by state and by your own declaration. New Mexico's statute, for example, sets its own combination of a lot-sale percentage and backstop timeframes for developments that fall under it. That is one state's formula, not a national default. Your association's actual answer is whatever your declaration says, read together with whatever your state's statute requires if the declaration is silent.
What changes once control ends?
Once the trigger is met, the declarant's special rights end. Board seats that the declarant used to fill directly become seats the membership elects. This shift is often called the transition, the point where the association moves from developer-run to owner-run. The declarant does not lose its rights as a property owner of any lots it still holds, only its extra governance powers.
Boards approaching this point often find that document review, budgets, and reserve studies inherited from the declarant period need a fresh look now that owners, not the developer, are accountable for them.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
Your community is newly built. The builder has appointed all five board members, and owners have no vote on the budget or architectural approvals. What is this arrangement called?
An owner asks exactly when the declarant will stop controlling the board. Where should the board look for the real answer, not a guess?
A declarant records a document voluntarily giving up its special control rights years before any statutory deadline would otherwise apply. What happens to the control period?
Sources
- New Mexico Statutes Annotated Section 47-16-8, Declarant control of board, State of New Mexico, via Justia
Related elsewhere in the Academy
Governing Documents
Not sure what your own declaration says about declarant control? Learn how to research a governing-document question next.
The percentage of lots sold, the number of years, and the exact list of triggers that end declarant control all vary by state and by your association's own declaration.