HOA collected fees from some, waived fees for others

In 2010 our HOA, which was operated unilaterally by the developer, increased the quarterly assessment from $310 to $620 to offset the costs of litigation. This was the case for one year -- totaling an additional payment of $1,240 for each homeowner. I and numerous other neighbors paid this additional fee to remain members in good standing, but a number of homeowners who were in a dispute with the developer did not pay HOA dues. Eventually the developer went bankrupt and the remaining lots in the area were sold at auction, along with the developer's declarent rights. Under the leadership of the new declarent, the HOA has decided to NOT collect the added $1,240 from those who did not pay in 2010. Those of us who did pay are left holding the bag. Aside from the fact that this rewards bad behavior, my question is -- is it legal for an HOA to arbitrarily forgive fees from some in the neighborhood that have been collected from others?

BrianB: Thanks for the response. If the new developer has decided that the additional fee was without merit or assessed without basis, it seems like that decision would apply to everyone including those who already paid. Back out those past payments so everyone is on equal footing and then assess whatever amount is needed to operate moving forward. At least that's what I would feel is fair to all parties.

Daniel

Me again........LOL

Why would my compasny (new owner) credit you with money you never paid me? Like it or not, would you consdier this sound business practice?

Daniel, you are right. It's not fair. However, as a Realtor, the things I've seen "developers" get away with before the HOA is "of age of majority" and "turns 18" so to speak, they get away with murder. I've seen the HOA 'teased' with ridiculously low intro fees, only to triple or quadruple fees for the community upon turning over the HOA to the Community for "them" to run when enough lots were sold. When "they", the new Board realizes that that "intro rate" of $750, my words, won't buy squat. They were duped because deep in the belly of those CC&R docs they didn't read that they were going to have to cover all maintenance that the Developer didn't cover. So, those low fees they paid for five years while he sold enough lots and built enough homes in this huge community, along with a school, club house, tennis courts, etc... These people had some hideous fees. And oh, by the way, the Developer all along, paid the CDD fees on all lots! What's that? The Community District Development Fees, which in turn, added on an average home with a nominal tax bill then of maybe, $1800.00, soared to almost $6,000.00 per year! That's right! HOW could this happen? HOW? Because people did NOT read the CC&R's. Depending on 'which' areas of the neighborhood they bought in, for 3 to 5 years, they paid $750/year for HOA fees, increased yearly by $350 to year 5, when it doubled. So, follow me, just for years 1-3, $750/year (intro rate), year 4, $1000, year 5 $1350, year 6-$2650 + CDD FEE kicked in of anywhere between $2300 to $2400/year depending on where you live, PLUS YOUR TAXES. The county we live in collects our taxes and the CDD fees and PM (Property & Maintenance Fees) which are NOT HOA fees), as well as garbage, on our tax bill, but of course, the latter are Non-Ad Valorem Assessments.

So, Daniel, those of you that did the right thing got screwed. It's not fun. But think of it this way, the Developer created a club called the HOA and he asked you to pay to join the club and he promised that it was going to be an honest, legitimate club; but he lied to you and the others. It was his party, you bought into it, now he sold it. The best that you can all hope for at this point is that this developer is honest, trust worthy, and successful. I would do everything to get involved so that he would chose YOU to be on the Board of Directors when the Association is handed over to the Community so that YOU have a 'say so' and YOU can instill integrity from the very beginning when it's handed over to the people. I would be doing exactly what you're doing now: listening and learning about HOA in my area, state, and community. I would find out the Laws in my state and STUDY THEM MYSELF. I WOULD STUDY MY ASSOCIATION LEGAL DOCUMENTS AND BYLAWS. They should be in your closing docs or online at the courthouse.

You can be screwed once unknowingly. Don't let it happen again. Make every "oops" and opportunity to learn a lesson. With the right attitude, you will chalk that money up that you all paid as money spent on a "Seminar". YOU DID THE RIGHT THING. You PAID. Had you not, the HOA had right to lien your property. Now that would have really been a game over and painful le$$on had you NOT paid and it gone in another direction, right? Now, that's the OTHER Way to look at this. How it turned out sucks, but I gave you my two cents. Just keep your 'enemies' very close. Get to know that new Developer.

FYI: It's a real chance people take moving into a community that has not turned over control of their HOA to the people. Just you be in line for the Take Over. Is the community going to be managed by a company or self-managed? These are all important things to think about and learn. Have to run. Best to you.

SheriC1: Thanks for your input. What a mess. I think this developer is pushing to complete the development within the next 12 months or so, at which time they will transition the HOA to the owners -- some of whom have been here with no say in HOA activities for seven years. I do suspect that we'll have some significant catch-up projects -- gate in back of development, pond maintenance, irrigation in certain common areas -- that we will have to deal with at that time.

What was the dispute these non-paying homeowners had with the previous developer?

KevinK7: There were a number of different issues -- mostly related to the HOA's strict rules, enforcement actions and exorbitant fees for submitting changes to plans.

Here's how the Dallas Morning News (http://www.dallasnews.com/news/community-news/colleyville/colleyville-grapevine-southlake-headlines/20100327-Colleyville-homeowners-divided-over-developer-s-8806.ece) described it: "The homeowners assert that Bagwell and his associates run the HOAs in an arbitrary, capricious and discriminatory manner."

The story goes on to describe the grievances this way:

• Bagwell's real-estate partnerships, which own vacant lots in the still-developing neighborhoods, are the only property owners who have voting rights in the HOAs. That means homeowners have no way to participate.

• Homeowners are not allowed to select their own homebuilders, pool contractors, roofers, irrigation companies, fence builders or landscape architects. Instead, Bagwell and his associates require them to select those contractors from an HOA-approved list.

• Covenants, conditions and restrictions that govern the HOAs' structure and activities "contain provisions which vest Bagwell with the putative authority to amend or abolish any aspect of the CCRs, in his sole discretion, at any point after their filing," according to the CHORA lawsuit. Bagwell calls all the shots and his rules amount to a constantly "moving target," according to the suit.

• A fee - ranging from $50 to $600, depending on the issue - must accompany each building plan or exterior-modification design submitted to the architectural committee. If the committee rejects a plan, resubmissions require another fee. This creates "the obvious incentive to deny submitted plans and proposals on an arbitrary and capricious basis to force homeowners to pay additional review fees with each additional submittal," according to the CHORA lawsuit.

--

It is our understanding that the new developers (Toll Bros) have decided not to pursue the collection of the $1,240 from those who did not pay and has no plans to refund or credit those who did pay when it was originally invoiced/assessed.