Turnover

Turnover is the critical event in a new HOA community's life cycle when the developer's control of the board ends and homeowner-elected directors take over. Triggers for turnover are defined in the CC&Rs and state law — typically when a set percentage of lots (75% in most states) have been sold, or after a fixed number of years. At turnover, the developer must hand over all association records (financial accounts, governing documents, contracts, insurance policies, as-built plans, warranty information) and convene an organizational meeting for homeowners to elect a board. A post-turnover audit often reveals deferred maintenance, underfunded reserves, or sweetheart vendor contracts that the new board must address.

Turnover is when the community's actual financial and physical condition becomes fully visible. Homeowners in transitioning communities should insist on an independent reserve study and financial audit immediately after gaining control.