By Miki Mullor
Editor

For years, homeowners in developer-controlled communities like Hideout have been told, implicitly or explicitly, that the developer’s control of the homeowners association gives it extraordinarily broad authority over the community.

But “broad authority” and “absolute authority” are two very different things.

Disclosure: Aaron Pacini is the author’s attorney. I believe readers should know that relationship when considering both his article and my comments about it. The observations below are my own unless specifically attributed to Pacini or his article.

Pacini’s original article can be read here:
Administrative or Absolute? A Developer’s Checklist of Duties During the Period of Administrative Control

Pacini begins by acknowledging that Utah law permits a developer—also called a declarant—to reserve substantial powers during the period of administrative control. Those powers can include appointing and removing board members, setting budgets and assessments, entering contracts on behalf of the association, and adopting rules and design criteria.

But he then makes the central point:

“Each of these powers is a power to administer and is not absolute.”

Pacini explains that a developer’s authority exists alongside contractual obligations, the covenant of good faith and fair dealing, fiduciary duties, and statutory requirements.

For Hideout homeowners, that distinction should prompt some important questions.

Does the Developer Follow the Same Rules as Everyone Else?

One of the first questions in Pacini’s checklist is whether the developer follows the same rules it enforces against homeowners.

He specifically asks whether a developer exempts itself from design or architectural requirements and whether board members receive exceptions that ordinary owners do not.

That is an important principle.

Developer control shouldn’t mean one set of rules for homeowners and another for the developer or people associated with it.

If architectural standards, design requirements, fees, deadlines or other restrictions are imposed on individual homeowners, residents have every reason to ask whether those requirements are being applied consistently and fairly.

Are Homeowners Getting the Records They Are Entitled to See?

Pacini also emphasizes transparency.

His checklist asks whether the association maintains governing documents, meeting minutes, budgets, financial statements and appropriate accounting records—and whether supporting agreements and documentation are made available to owners.

This matters enormously in a developer-controlled association.

When homeowners do not elect a majority of the board, access to records becomes one of the few mechanisms they have to understand what the association is actually doing with their money.

A financial statement showing that money was spent tells homeowners only part of the story.

Homeowners should also be able to understand why it was spent, who received it, what agreement authorized the payment, and whether the transaction benefited the association.

What About Conflicts of Interest and Private Dealings?

Perhaps some of the most important questions in Pacini’s article concern conflicts of interest.

He asks whether conflicts have been disclosed and whether procedures exist to prevent improper private dealings among the board, developer, property managers and other interests.

He even asks whether board or committee members are paying themselves and, if so, whether those arrangements and payments have been disclosed to homeowners.

Those are not abstract governance questions.

A developer-controlled HOA inherently creates the potential for conflicts because the developer may simultaneously control the association while having its own separate financial and development interests.

That doesn’t mean every transaction involving the developer is improper.

It does mean those transactions deserve transparency and scrutiny.

Who Is Actually Making the Decisions?

Pacini raises another fascinating governance question: whether a developer principal who isn’t actually a board member is nevertheless dictating what the association will do.

That gets to the heart of what a board of directors is supposed to be.

Even during developer control, there is still an association. There is still a board. There are still directors. There are still meetings, votes, minutes and governing documents.

Developer control shouldn’t reduce all of that to ceremony.

Homeowners should be able to determine who actually made a decision, when it was made, who voted for it and what authority permitted it.

And Then There Are Reinvestment Fees

For Hideout homeowners, one item in Pacini’s checklist is particularly noteworthy.

Under the heading Financial Management, Pacini asks:

“Do the reinvestment fees directly benefit the association?”

He then gives this example:

“Are you using reinvestment fees to illegallyillegaly pay for amenities owned by you, the developer?”

That question should immediately get the attention of Hideout homeowners.

Our community has had extensive debate over reinvestment fees and the use of those funds. Pacini’s article doesn’t decide whether any particular transaction in Hideout is lawful or unlawful, and neither does this article.

But his checklist illustrates why homeowners are justified in asking detailed questions about where reinvestment-fee money goes, who ultimately benefits from those expenditures, what contractual authority supports them, and whether the expenditures directly benefit the association.

Those aren’t hostile questions.

They’re governance questions.

And according to an attorney whose practice includes Utah community-association law, they’re precisely the kinds of questions a developer-controlled association should be prepared to answer.

Design Review Fees Deserve Scrutiny Too

Pacini separately addresses design-review fees.

He asks whether such fees are based on the actual cost of review rather than, for example, simply being calculated according to the square footage of a proposed home. He also raises the question of whether owners are reimbursed when fees collected exceed actual review costs.

That issue should be familiar to anyone who has gone through the design and construction process in Hideout.

Again, the point isn’t that the existence of a fee itself establishes wrongdoing.

The question is whether the fee is properly imposed, how it is calculated, what costs it actually covers and whether the association can substantiate those costs.

Developer Control Is a Custodianship, Not Ownership of the HOA

Perhaps the most important sentence in Pacini’s article comes at the end.

He describes the period of administrative control as a “temporary custodianship” governed by contractual, fiduciary and statutory duties.

That’s a fundamentally different way of thinking about developer control.

The HOA does not become the developer’s private company simply because the developer currently has the right to appoint its board.

The association belongs to the community it was created to serve.

Administrative control is temporary. The decisions made during that period, however, can affect homeowners for decades.

Contracts can survive turnover. Financial obligations can survive turnover. Deferred maintenance can survive turnover. Precedents established during developer control can survive turnover.

That’s exactly why transparency and accountability matter before homeowners take control—not merely afterward.

Hideout Homeowners Should Start Asking the Checklist Questions

Pacini wrote his article as a checklist for developers. Hideout homeowners might consider reading it as a checklist for themselves.

Are the same rules being applied to everyone?

Are conflicts of interest fully disclosed?

Are HOA records and the agreements underlying major expenditures available to homeowners?

Are board decisions actually being made by the board?

Are meetings, votes and minutes being handled properly?

Are transactions involving parties connected to the developer transparent?

Do reinvestment-fee expenditures directly benefit the association?

Are design-review fees tied to legitimate review costs?

And, perhaps most importantly:

Is our period of developer control being administered for the benefit of the association and its homeowners—or is “administrative control” being treated as something closer to absolute control?

Those are questions every Hideout homeowner has a legitimate interest in asking.

And the developer-controlled board should have no difficulty answering them.

Source and attribution: This commentary was prompted by Aaron Pacini’s July 2026 article, “Administrative or Absolute? A Developer’s Checklist of Duties During the Period of Administrative Control,” published by Maxwell & Morgan. Pacini is a Utah-licensed attorney and partner at Maxwell & Morgan. He is also the author’s attorney. This article represents my commentary and should not be attributed to Pacini or Maxwell & Morgan except where their original article is specifically quoted or referenced.