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If you lose your properties with a deed in lieu as a developer do you lose your right as the declarant of the CC&R's.

Longview, WA |

The developer had in the CC&R's he could change them with his sole signature up until all but four lots sold. He lost all but two lots which he owns, and all the other unsold lots to deeds in lieu. He had written an amendment to the CC&R's prior to the foreclosures, but did not have it notarized or recorded until 6 months later. His LLC had also dissolved 20 days prior to the recording of the amendment.. So my question is because he didn't actually sell the properties did he still have declarant rights to change the CC&R's. Thanks

the declaration stated "all but four lots sold or unless declarant elects otherwise" The LLC license fee had not been paid in over three months so it had expired. Then the amendment that was written and signed was resigned in front of a notary and then recorded

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Attorney answers 1

Posted

I understand events in the following order

Original CC&Rs recorded
Amendment written but not notarized or recorded
Deeds in lieu to lender for all but two lots
LLC dissolved (you don't say how)
Amendment notarized and apparently recorded

Not quite sure what you mean when you say that he "didn't actually sell the properties." If he gave the lender deeds in lieu of foreclosure, he sold them. The deed in lieu of foreclosure works like any other deed. The bank acquires title subject to encumbrances of record and others of which it has sufficient notice. if it did not know about the amendment that you had written, it would not be bound by them. Even if it did, the amendment was not perfected before the transfer. After he was down to two lots, he did not have even theoretical power to change the CC&Rs. So I would think that his amendment is void.

The problem is that if they are recorded, he will have to sign a document acknowledging that they recording was ineffective or someone will need a quiet title action to remove it. Title companies will pick it up and make it a special exception. Getting it removed may prove difficult without some formal action.

This is legal information and not legal advice. The final answer to your question will depend on more facts than you can include in your question and some that you probably would not think to include. Treat this as a starting point, not the answer.

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