During the continued nationwide economic issues, more associations every day are discovering the answer to that very question, and discovering the answer is a resounding yes.

Declarant Control relates to the Declarant’s right to control the operation of an association by means of appointing members to the Board of Directors.  The Declarant Control provision permits the Declarant to establish budgets, execute contracts, retain vendors, etc.  This authority allows the Declarant to maintain costs related to the operation of the community.

The Declarant Control period phases out over the course of the development, with final termination occurring upon the earliest to occur of:  (i) the sale of 75% of the units that may be created to owners other than the Declarant; (ii) two years after the last time the Declarant added property to the community; or (iii) two years from the date the Declarant last sold a unit.

Reserved Declarant Rights are rights that the Declarant may retain to ensure the community is completed.  Reserved Declarant Rights typically include the right to annex additional property into the community, the right to expand the community, the right to amend the Declaration, and the right to maintain sales offices, signs and perform marketing for the community.

Reserved rights do not expire upon the expiration of the Declarant Control period but, rather, may continue for a number of years after the Declarant surrenders control of the property.

If the Declarant is unable to complete the community, the Reserved Declarant Rights may be assigned to a subsequent developer.  The new developer will than have a period of time to complete the development.  This means that a community may lie dormant for a number of years and then become active again.

As indicated above, Declarant Control is the right for the Declarant to control the operation of the Association while the developer is building the community.

Reserved Declarant Rights, on the other hand, are reserved rights to complete the community.  With the slow down in construction, these rights may be used by a subsequent developer in the future

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