What declarant control is
A condominium is created when a declarant — the developer or sponsor — records a declaration. At that moment the declarant owns every unit. Because governance is by unit owners and the declarant is the only unit owner, it necessarily controls the association at the outset. State condominium acts and the project's own documents then define a period of declarant control, during which the declarant may appoint and remove the officers and members of the board, and they set the terms on which that period ends.
Two features of that arrangement drive everything else on this page.
The declarant is on both sides of every transaction. The entity that built the building also controls the board that would decide whether it was built correctly, whether to accept the common elements, what the budget and reserve contribution should be, and whether to assert a claim against the builder. That is a structural conflict, not an allegation about anyone's conduct.
The declarant's economic interest is to sell units. Selling units is easier when the monthly assessment is low, and a low assessment is produced by an optimistic operating budget and a modest reserve contribution.
So the numbers a pre-turnover buyer sees have not been tested by anyone whose interests align with the owners. That is the risk, and it is document-checkable.
How control ends, and where the answer lives
The mechanics are set by state statute and then implemented, sometimes tightened, in the declaration and bylaws. There is no national rule, and both documents have to be read, because a declaration can end control earlier than the statute requires but not later.
In states using the framework derived from the Uniform Common Interest Ownership Act the shape is consistent even though the numbers are not. Such statutes typically provide that the control period may not exceed a stated number of years from the first conveyance, with a longer outer limit where the declarant reserved development rights; that control terminates earlier once a stated high percentage of units has been conveyed to other owners; that by termination the owners must elect a board of at least three people, a majority of whom are unit owners; and that a declarant may surrender its appointment rights early while reserving a right to approve specified actions.
Many state acts also require staged owner representation before full turnover — a minimum number of owner-elected seats once a lower conveyance threshold is passed, and a larger share later. Agency guidance points the same way without setting a threshold, stating that the developer should provide for and promote the unit owners' early participation in the management of the project.
The statutory outer limit is a ceiling, not a schedule. Where a project sells out slowly, or where the declarant reserved development rights over additional phases, control can persist for years — and the reserved-rights case is precisely the one in which the longer limit applies. Ask for the date control is projected to end and the basis for that projection, not simply whether turnover is coming.
What turnover delivers, and the transition study
Turnover, or transition, is a delivery of control, records, money and legal claims. Statutes and documents typically require the declarant to hand over the recorded and organisational documents; financial records and the association funds, including reserve balances; contracts and common-element leases in force; insurance policies and claims history; as-built plans and maintenance information; warranties, with what is needed to enforce them; and owner files, permits and certificates of occupancy. Several states additionally require a turnover audit or transition financial statements from an independent accountant covering the control period, but that requirement is state-specific — the list above is a reading guide, not a national schedule.
The practical question is not whether turnover happened but whether it was completed. A turnover delivering keys and a bank balance but no as-built drawings, maintenance manuals or warranty documentation leaves the association unable to run or defend its own building.
A transition study — also called a transition inspection or building conditions assessment — is the independent engineering and architectural review the owner-elected board commissions afterwards. It establishes whether the building was constructed in accordance with the plans, specifications and code; identifies latent defects while warranties are still enforceable and any statute of repose is still open; produces an expert record capable of supporting a claim or a reasoned decision not to bring one; and feeds the first genuinely independent reserve study.
Every state has a statute of limitations and, separately, a statute of repose cutting off construction claims a fixed number of years after substantial completion regardless of when a defect is discovered. Repose periods differ substantially by state, so the number is not one to take from a national page. What generalises is the consequence: a study commissioned late can find defects that are real and unrecoverable. A board that skipped it did not save money — it converted a potential developer liability into a certain owner liability. A study that found nothing significant is one of the few genuinely clean pieces of evidence about a young building.
Turnover is a discovery event
The most under-appreciated feature of this subject is that turnover is when the truth arrives. While the declarant controls the board it controls the budget, the reserve contribution, the disclosures, the choice of manager and the decision whether to investigate anything. The first independent board, the first independent audit, the first independent reserve study and the transition study frequently land inside the same twelve months, and they frequently land together.
- An operating budget that was never adequate. Where the declarant subsidised operations, guaranteed a maximum assessment, or set assessments at a level that helped sell units, the real cost of running the building appears only when the subsidy stops, and the correction is a step change in the first or second post-turnover year.
- Reserves funded to a schedule nobody independent validated, and deferred maintenance already accrued — even a three-year-old building has consumed three years of sealant, coating and equipment life.
- Construction defects, found by the transition study, on a clock set by warranty expiry and the statute of repose.
- Contracts that do not serve the association — long-term management, service or amenity agreements entered into by the declarant-controlled board, sometimes with related parties, or long-term leases of common elements. Some states give the owner-elected board a right to terminate declarant-era contracts within a window after turnover; whether that right exists is state-specific.
- Unpaid declarant assessments on unsold units, and common elements never formally accepted or built differently from the recorded plats and plans.
The risk profile of a condominium is therefore not a smooth curve. Buying shortly before turnover means buying into numbers that have not been tested; buying one to three years after, with the transition study and the first independent audit and reserve study in hand, means buying into numbers that have. Neither is wrong — they are different risks, and a buyer who knows which one they are taking is far better placed than one who assumes new construction carries none.
Phasing, annexation and the project that is not finished
Many declarations reserve to the declarant the right to expand the condominium by adding land, buildings or units in later phases, or to annex adjacent property. These reserved development rights sit in the declaration and are usually limited in time by statute or by the document itself. An incomplete project differs for a buyer in six specific ways:
- The denominator is not fixed. Assessments, votes and each owner's percentage interest in the common elements are allocated across the units in existence. Adding units shifts the allocations, and whether that helps or hurts depends on whether the added units carry their share of costs already incurred.
- The amenities may not exist yet. A buyer can pay a price and an assessment premised on a pool, clubhouse or garage that is on the plan and not on the ground.
- Common elements may not have been accepted. Until the association formally accepts them, responsibility for defects is contested.
- The declarant still votes. Unsold units carry votes, so control persists while phasing persists.
- The declarant may stop. Market conditions, financing or insolvency can leave a partially built community with a budget scaled for a project that will not exist. Whether the declarant is obliged to complete later phases or merely permitted to is answered by the declaration and state law, and the answer is very often permitted rather than obliged.
All of it is checkable in the declaration before an offer is made: over what land the rights run, until when, and how many units may be added.
What it means for financing, and what to ask
The secondary-market definitions state plainly why completion and turnover matter. An established project is one where a high percentage of units have been conveyed to purchasers, the project is 100 percent complete including all units and common elements, it is not subject to additional phasing or annexation, and control has been turned over to the unit owners. A new project fails any of those tests. The definitions sit at Selling Guide B4-2.1-01, version dated 5 August 2026.
That classification is why developer control complicates financing rather than blocking it. New projects are financeable; they are reviewed harder. The additional requirements include a presale requirement — a minimum share of units in the project, or in the subject legal phase, conveyed or under contract to principal residence or second home purchasers, with investor purchases excluded, the percentage being a published threshold that gets revised; a rule that there may not be more than one legal phase per building; a definition of substantially complete requiring a certificate of occupancy or similar and completion of all units in that phase, subject only to buyer-selection items; and, where the phase is not fully complete, acceptable completion assurance arrangements guaranteeing future completion of the common elements — in practice performance bonds or escrowed funds.
Completion assurance protects the lender, not the buyer, but a buyer can borrow the idea: what instrument guarantees completion of the unbuilt common elements, and when does it expire.
- Is the declarant still in control, on what basis, and when does control end under the statute and the declaration? If turnover has occurred, on what date, and was there a turnover audit?
- Was a transition study performed — by whom, when, what did it find, what was done?
- Does the declaration reserve development or annexation rights; over what land; until when; for how many units? Are declarant-era contracts still in force, and any with related parties?
- Compare the current budget with the declarant-era budget line by line. Which lines moved, and why?
Name the boundary. Whether a declarant has met its statutory turnover obligations, and whether any claim survives, is a question for an attorney licensed in the state. Whether the building was built correctly is a question for a licensed engineer.
Common questions
When does developer control of a condo association end?
It depends on the state statute and on the declaration, and there is no national answer. The common structure sets an outer limit expressed in years from the first unit conveyance, with earlier termination once a stated high percentage of units has been conveyed to owners other than the declarant. A declaration can end control earlier than the statute requires but not later, so both have to be read. Where the declarant reserved development rights for later phases, the longer statutory limit usually applies.
Is it a bad idea to buy in a condo the developer still controls?
Not inherently, but it is a different risk from buying after turnover. Before turnover, the budget, the reserve contribution and the disclosures were prepared under the control of the entity that built the building, and no independent audit, reserve study or transition study exists yet. After turnover those documents exist and can be read. A pre-turnover buyer is accepting untested numbers in exchange for a new building. That is a trade, not a mistake, as long as it is made knowingly.
What is a transition study and who pays for it?
A transition study is an independent engineering and architectural review commissioned by the owner-elected board after turnover, to establish whether the building was constructed in accordance with plans, specifications and code, and to identify latent defects while warranties and the statute of repose are still open. The association pays for it as a common expense. Skipping it does not avoid the cost of a defect; it only removes the ability to recover that cost from anyone else.
Why do condo assessments jump after turnover?
Because the declarant-era budget was set while the declarant was selling units, and a low assessment helps sell units. Where operations were subsidised, or a maximum assessment guaranteed, or the reserve contribution simply set low, the real cost of running the building becomes visible only when the first independent board prepares its own budget. A step change in the first or second post-turnover year is a common and largely predictable correction rather than evidence of mismanagement.
Does developer control make a condominium non-warrantable?
No, but it changes which review applies. A project where control has not been turned over, or that is not 100 percent complete, or that remains subject to additional phasing or annexation, is classified as a new project rather than an established one. New projects are financeable, but they face presale minimums measured against owner-occupant and second-home purchasers, a one-legal-phase-per-building rule, and a requirement for acceptable completion assurance where the phase is not fully complete.
What happens if the developer never builds the later phases?
The association is left with a common-element budget and infrastructure scaled for a project that will not exist, spread across fewer units than planned. Whether the declarant was obliged to complete the later phases or merely permitted to is answered by the declaration and by state law, and it is very often permitted rather than obliged. Ask what completion assurance instrument exists for the unbuilt common elements, who holds it, what it covers and when it expires.