Declarant Control

The period during which the developer (declarant) retains the right to appoint or control the board of directors of a newly created homeowners association. Declarant control is a standard feature of community development: the developer needs to manage the association during the construction and sales phase when most units are unsold and there are few homeowners to serve on the board. This control typically ends when one or more triggering events occur, as specified in the governing documents and state law: a certain percentage of units have been sold (commonly 50% to 75%), a specified number of years have passed since the first unit was sold (often three to seven years), or the developer voluntarily relinquishes control. During the declarant control period, the developer appoints board members — often employees or associates of the development company — and makes all governance decisions. However, the developer-appointed board has the same fiduciary duties as any homeowner-elected board: the duty of care, the duty of loyalty, and the obligation to act within the scope of its authority. This means the developer cannot use its board control to benefit itself at the expense of the association — for example, by setting artificially low assessments to make units easier to sell while deferring necessary maintenance and underfunding reserves. In California, the Davis-Stirling Act and the Subdivided Lands Act regulate the declarant control period and impose specific obligations on the developer, including requirements for reserve funding, disclosure to buyers, and eventual transition of control to homeowner-elected directors.