Practice Area

Underfunded HOA Reserves at Developer Turnover

Texas Courts · Property Code § 209.00591

Situation — How This Comes Up

When our HOA was turned over to homeowner control, we discovered the reserve fund was nearly empty.

What You Need to Know First

A developer who transfers control of an HOA with an underfunded reserve fund may have breached fiduciary duties owed during the control period. The turnover audit is the document that exposes the problem — and begins the clock on the claim.

Full Analysis

Developers who control HOAs owe fiduciary duties to the association and its members. An underfunded reserve at turnover — the result of inadequate assessments or misuse of funds during the control period — can support both breach of fiduciary duty and fraud claims against the developer.

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The information on this page is for general informational purposes only. Nothing here constitutes legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney–client relationship. © 2026 Silachi Law Firm, PLLC · Texas Bar No. 24118480