Real estate transfer fee

TimG2 (South Carolina)
Posts: 15

Posted:

Does anyone have any experience implementing a "new" fee on the sale of real estate in an HOA? WE currently don't have one but some board members want to impose a .25% fee, to be paid by buyer. Since this is not in our Covenants or By-laws it would at least have to be approved by 75% of our residents and the covenants and/or by-laws changed.(in my opinion)
Someone told me that a court in Beaufort SC ruled a similar attempt illegal since the fee wasn't there from the beginning.
I'd appreciate and first hand knowledge or information on any court cases involving this matter.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

The HOA does NOT own that property. A HOA is a GROUP of owners who share common property/costs. So the HOA charging such a fee doesn't seem right to me.... Just sayin....

Former HOA President

MelissaP1 (Alabama)
Posts: 13,836

Posted:

The HOA does NOT own that property. A HOA is a GROUP of owners who share common property/costs. So the HOA charging such a fee doesn't seem right to me.... Just sayin....

Former HOA President

TimB4 (Tennessee)
Posts: 21,062

Posted:

What is the purpose of the charging the transfer fee?
Is it just because the law allows it?

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By TimG2 on 08/07/2013 4:48 AM
Does anyone have any experience implementing a "new" fee on the sale of real estate in an HOA? WE currently don't have one but some board members want to impose a .25% fee, to be paid by buyer. Since this is not in our Covenants or By-laws it would at least have to be approved by 75% of our residents and the covenants and/or by-laws changed.(in my opinion)
Someone told me that a court in Beaufort SC ruled a similar attempt illegal since the fee wasn't there from the beginning.
I'd appreciate and first hand knowledge or information on any court cases involving this matter.

Keep in mind that such a fee, assuming it is legal, is taxable non-exempt income since it is not an assessment levied against all homeowners. If the fee creates enough income you could also lose your tax-preferred status as an HOA and be required to file the standard corporate tax form, 1120. If that happens, money you set aside for reserves represents profit and also becomes taxable.

Complicated world, isn't it?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

An HOA-assessed deed transfer "tax" is a rotten idea that will depress sales and property values. This HOA board is not looking after its members' interests if it's engaging in this line of thinking.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Transfer fees are not uncommon. Some are a fixed fee, Some are a % of sale price.

I know several associations that have them. One association I was in tried to get member approval for one and it failed. I for one voted for it.

KarenT (Washington)
Posts: 250

Posted:

We don't really call ours a transfer fee but a fee for our bookkeeper for their time filling out the information sheet to the closing agent - so more an like an "administrative fee".

KellyM3 (North Carolina)
Posts: 2,239

Posted:

This is a tax in a practical purposes and a quarter-percent "fee" is real money for what purpose? To pay an HOA bookkeeper for bookkeeping? Sorry, I represent my dues payers to much to buy that one.

ErikaB2 (Florida)
Posts: 36

Posted:

Excuse my ignorance.

What does the transfer process entail? Who handles it (PM, Accountant, Attorney, Board)? What is the average costs and time involved, (not fee cost)?

I am asking because we (our HOA) started getting charged "closing costs" by our PM and was told we would be refunded by the buyer, however, we are still waiting months later to get refunded, I thought these costs are paid at closing by process of escrow, hence closing costs.

Thanks.

FredS7 (Arizona)
Posts: 927

Posted:

The Sun City HOAs in Arizona have a fee that they call a preservation and improvement fee. I guess it is intended to help maintain/ improve the common facilities.

So in at least one state it appears to be legal and reasonably well accepted. To start something similar in another HOA would probably require a vote of the homeowners.

Some states allow a fee upon transfer (to cover costs) but limit the size.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Preservation and improvement. I like that better then brace yourself darling.......LOL

PenneyM (Washington)
Posts: 41

Posted:

Quote:

Posted By KellyM3 on 08/07/2013 12:56 PM
This is a tax in a practical purposes and a quarter-percent "fee" is real money for what purpose? To pay an HOA bookkeeper for bookkeeping? Sorry, I represent my dues payers to much to buy that one.

We recently upped our transfer fees from $25 to $299 because of the large volume of recent bank foreclosures. All of us that work in the office are unpaid volunteers. We simply do not have the time to deal with this new problem. So we had to hire a temp from local employment agency to deal with this.

So we upped the x-fer fee to offset the cost for having to bring in a temp employee. It was either that or raise the dues again.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Penney,

You're making a conscious decision to volunteer your time in the HOA. If the board members are compensated for their lost time doing office work, I guess that carry some logic. But, if you're still working for free, then squeezing money out of the bank or private buyers for amenities they haven't used yet seems like bad business. Besides, the fee isn't discouraging the bank activity of foreclosure in your community.

I'm uncomfortable making buyers - who are still non-residents - prepay for the existing community's HOA operations and amenities use. It seems as fundamentally flawed as a special assessment for an amenity upgrade where new buyers pay a large lump sum because long-time residents voted themselves dues rates so low they didn't save for property maintenance, then possibly sold and moved before the assessment, thus using the amenity at a subsidized rate.

All told, it's legal and it works for many communities but complaining of having too much volunteer responsibility because of an active real estate market (one way or the other) is not selling the fee in the appropriate light in my opinion. I don't see the sympathy strategy for volunteers who willingly choose to operate a property management office. I'd almost bet the HOA fee isn't much talked about until the real estate closing where the buyer and seller are too invested to haggle....or the seller just eats the fee to make the sale in the event the buyer is paying full market price with little equity to incorporate fees in the loan or bring cash to closing.

The fact is that straight-forward business will easily inform dues payers that their dues are set a rate to pay for operations and save for Reserve Funds. Most other income sources, if budgeted as necessary cash flow, is unstable. I do recognize there may be regulations that vary from state-to-state.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Great idea Penny about the temp agency! Buyers are getting nickeled and dimed by everyone at closing. Another $299 fee is not going to make or break a sale.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

That said..... I do think a percentage of the home sale is unfair. The HOA should not make money on this and should only cover costs associated with the work that needs to be done. It needs to be a flat rate.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I agree with you KellyM 100%. If you say you volunteer you volunteer. If there is cost for materials then charge for those NOT the work. Habitat for Humanity works that way. The volunteers and owners do the sweat equity and the HFH pays for materials. That is the way I view how to run your HOA as well. Only exception may be a Treasurer who really does the books. Most Treasurer positions are just in name. Thoase who do the books do deserve some comps for some items dependent on the situation. (Tax filings etc...)

Former HOA President

PenneyM (Washington)
Posts: 41

Posted:

Quote:

Posted By KellyM3 on 08/09/2013 6:13 AM
Penney,

You're making a conscious decision to volunteer your time in the HOA. If the board members are compensated for their lost time doing office work, I guess that carry some logic. But, if you're still working for free, then squeezing money out of the bank or private buyers for amenities they haven't used yet seems like bad business. Besides, the fee isn't discouraging the bank activity of foreclosure in your community.

I'm uncomfortable making buyers - who are still non-residents - prepay for the existing community's HOA operations and amenities use. It seems as fundamentally flawed as a special assessment for an amenity upgrade where new buyers pay a large lump sum because long-time residents voted themselves dues rates so low they didn't save for property maintenance, then possibly sold and moved before the assessment, thus using the amenity at a subsidized rate.

All told, it's legal and it works for many communities but complaining of having too much volunteer responsibility because of an active real estate market (one way or the other) is not selling the fee in the appropriate light in my opinion. I don't see the sympathy strategy for volunteers who willingly choose to operate a property management office. I'd almost bet the HOA fee isn't much talked about until the real estate closing where the buyer and seller are too invested to haggle....or the seller just eats the fee to make the sale in the event the buyer is paying full market price with little equity to incorporate fees in the loan or bring cash to closing.

Kelly, you seem to misunderstand a couple of points here.

1) I am not trying to sell the transfer fee by asking for sympathy because we are unpaid volunteers. I am merely stating that we do not have the time. There are limits to how much time we can volunteer. I'm not going to quit my paid job to handle this huge problem. I am not a slave. So we absolutely had to bring in a temp just for the large volume of bank foreclosures. The temp's salary costs money. The money has to come from somewhere. Right now we upped the transfer fee to cover it.

2) The buyer and bank are not paying the transfer fee for amenities they haven't used yet. Again... The transfer fee is covering our additional costs of hiring someone to deal with all these bank foreclosures.

You argue that new buyers and banks are paying for this transfer fee is a bad thing. IMHO it's a GOOD thing. Actually we are billing it to the seller(usually a bank) and not the buyer. How they deal with it at closing, with the seller or buyer paying it, is none of my concern. But let's turn this on its head. Why should everyone else have to have their dues raised or special assessed for the Board having to bring in paid labor for the extra work load? All because of this fluke in the real estate market... For banks finally foreclosing on people that they probably should have never made loans to in the first place...

We didn't force these banks to make all these bad loans. So yes... We are squeezing them... Mercilessly...

I'm not shedding a tear here.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Hiring a temp to do paperwork is no different than hiring people to do anything else like lawncare. Sure volunteers could also do lanwcare, but when it becomes too much for the volunteers, its hired out. Just like everything else.

TimG2 (South Carolina)
Posts: 15

Posted:

Hi, I posted the original question but have since found out the state of SC has outlawed any new real estate transfer fees.
No new transfer fees can be made after 2/01/2012. The new act covers how older ones must be handled but I didn't read about that part since I just didn't want any new fees imposed on the sale of property within our HOA.

GnomeX (Washington)
Posts: 253

Posted:

Now this is interesting.

http://www.cai-padelval.org/blog/2011/09/20/fha-reignites-transfer-fee-battle

Couple years old. Wonder if it ever went through? Also says condos but nothing about HoAs...

KevinK7 (Florida)
Posts: 1,343

Posted:

What paperwork would a HOA have to do in regards to a bank foreclosure that is so time consuming?

PenneyM (Washington)
Posts: 41

Posted:

Quote:

Posted By KevinK7 on 08/11/2013 1:32 PM
What paperwork would a HOA have to do in regards to a bank foreclosure that is so time consuming?

Well here let's think about that for a minute and give you one of the worst examples.

One foreclosure the bank was contesting we were even a valid HoA. The bank wanted copies of everything. For example all our ccrs, articles of incorporation, copy of our bylaws as well as the county auditor filing numbers for each. They wanted last years budget and financial statements and well as copy of our last tax return. Then there are the demand letters for current years dues we have to fill out. They also wanted our insurance policy and info on the bond. There was also a lot of email writing when they were requesting more info. Any charges and payments from the bank have to be entered into our accounting software.

And on top of that most of the bank foreclosed properties have an HoA lien on it which the bank demands we release. So that entails someone writing up the lien release, driving to a notary to get it notarized, then another trip to the county courthouse to actually file the lien release. Just the round trip travel time to the court house is almost 2 hours.

That was one of the worst examples with all this back and forth wrangling with the bank over about a 1 week period. I didn't log my total time but I would say it probably was one and a half days total.

We have no full paid time staff here. It is all just volunteer with other jobs. I am not a slave to my HoA. I volunteer as much time as I possibly can. When the work load became too much we started falling behind on these bank foreclosures and the banks were pushing us to move faster. We had to bring in a temp to handle this.

It isn't just this snap our fingers and fill out a couple of pieces of paper. The time does add up more than you might expect.

KevinK7 (Florida)
Posts: 1,343

Posted:

Couldn't you create a boiler plate document for foreclosures with all the information presented? If they dispute let the HOA attorneys handle it. If the bank is in the wrong couldn't the HOA recoup any costs, in effect being less then a transfer fee?

I'm of the mindset that what you described is the duty of the board members. Thee treasurer deals with the financial documents, or a member-at-large drives to the courthouse. Instead of farming out the work establish an efficient and effective method for dealing with such situations.

I volunteered for organizations and school groups (serving officer positions) and sometimes it took up entire days or several days for a particular situation. I didn't see those situations as something beyond the scope of my job.

PenneyM (Washington)
Posts: 41

Posted:

Kevin,

With all due respect you are out to lunch on this one. You do not know what is involved. This isn't some school group. We are a non-profit corporation that are taking on all aspects of running this corporation. From accounts payable & receivables, legal problems and court attendance, community property maintenace, dealing with all member complaints, etc.

This is a full time business run by volunteers that also have to support to our own families with other paid jobs. We are not slaves. We do what we can and when it becomes too much to handle, we do outsource tasks and if needed bring in a temp for inside tasks.

But that being said. Your idea to hand this off to our attorney at $280 an hour when we have an office temp at $22 an hour just seems fiscally absurd to me. Ideas like that are what cause costs to spin out of control and break budgets leading to unneeded dues increases and special assessments.

SharonH9 (Virginia)
Posts: 216

Posted:

Quote:

Posted By PenneyM on 08/11/2013 5:02 PM
Kevin,

With all due respect you are out to lunch on this one. You do not know what is involved. This isn't some school group. We are a non-profit corporation that are taking on all aspects of running this corporation. From accounts payable & receivables, legal problems and court attendance, community property maintenace, dealing with all member complaints, etc.

This is a full time business run by volunteers that also have to support to our own families with other paid jobs. We are not slaves. We do what we can and when it becomes too much to handle, we do outsource tasks and if needed bring in a temp for inside tasks.

But that being said. Your idea to hand this off to our attorney at $280 an hour when we have an office temp at $22 an hour just seems fiscally absurd to me. Ideas like that are what cause costs to spin out of control and break budgets leading to unneeded dues increases and special assessments.

Didn't you say some of your neighbors want to dissolve. Since it is so much work why don't you look at that as an option. You can be a nonprofit corporation whose purpose is to maintain the roads in XYZ subdivision. You don't need to have an HOA to manage it. Just the nonprofit to maintain the roads. That is how my subdivision is (common sewer)and close relatives from Colorado the same. They have no HOA but pay dues to maintain the roads and pay for water from a common water source. No rules. No fines. No covenants. It's not the perfect solution either but it may simplify things for you.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By TimG2 on 08/11/2013 6:42 AM
Hi, I posted the original question but have since found out the state of SC has outlawed any new real estate transfer fees.
No new transfer fees can be made after 2/01/2012. The new act covers how older ones must be handled but I didn't read about that part since I just didn't want any new fees imposed on the sale of property within our HOA.

Tim

I believe if you read the regulation/law a bit closer it does allow for transfer fees/cost to be charged. What it seems to do is prohibit an arbitrary amount like say 1% of sale price versus actual costs.

There is more then one way to skin a cat.

PenneyM (Washington)
Posts: 41

Posted:

Sharon,

Oh that is a whole other can of worms. As I mentioned, the county will not take over the roads without numerous upgrades. I and others entertained the idea of disbanding and reform as a road association. The problem with that is if the corporation is dissolved, you cannot force people to join a road association. Some have said they will not join.

That is just one problem. The other is per Washington Non-Profit Corporation Act, to dissolve we would have to sell off the other common area properties (Clubhouse, Parks, etc.) We cannot sell the other common areas. We have clouded title. The original developer never deeded over any of the common areas to the HoA and only gave us a beneficial interest in all common areas with the requirement the HoA will maintain them.

Not insurmountable as it will require a quiet title action but our attorney states if any party fights it, he cannot give us a price tag. If no one fight it it would be cheap. If any party fight the quiet title, it could literally drain all our reserves.

Some have said just shut down the corporation, say the hell with even the all the common areas and everyone fend for their own part of the roads and snow plow ourselves out in the winter.

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

JonD1
Posts: 2,350

Posted:

Quote:

Posted By KevinK7 on 08/12/2013 3:34 AM

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

Because of course Kevin you know more than the lawyer.

Your "highly doubting" this means little in a court of law.

And opinions carry little weight in the legal system.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By JonD1 on 08/12/2013 5:35 AM

Posted By KevinK7 on 08/12/2013 3:34 AM

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

Because of course Kevin you know more than the lawyer.

Your "highly doubting" this means little in a court of law.

And opinions carry little weight in the legal system.

Penney wrote: "The original developer never deeded over any of the common areas to the HoA and only gave us a beneficial interest in all common areas with the requirement the HoA will maintain them. "

So by your logic I could "give" my neighbor a beneficial interest in my property requiring them to maintain my home (because if my home turns to garbage then their values would theoretically go down) and if they didn't I could make them liable?

I never claimed to know more then a lawyer. I stated that I "highly doubted" the attorney's statement - that a property owner could be held liable for property that was maintained but never owned by a defunct organization. I would consider getting a second opinion.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Hi, I posted the original question but have since found out the state of SC has outlawed any new real estate transfer fees.
No new transfer fees can be made after 2/01/2012. The new act covers how older ones must be handled but I didn't read about that part since I just didn't want any new fees imposed on the sale of property within our HOA.

I would simply charge an adminitrative fee for all the paperwork needed.

Copies of ccrs, articles of incorporation, copy of our bylaws as well as the county auditor filing numbers for each, last years budget and financial statements and well as copy of our last tax return. Then there are the demand letters for current years dues we have to fill out. They also wanted our insurance policy and info on the bond. In some states a Resale Certificate is required by law, stating current monthly dues, anticipated capital expenses, reserve fund statement, lawsuits, outstanding judgements.

This takes alot of work to gather for the buyers. A mgmt company will certainly charge for this. If the buyer refused to pay the administrative fee, they will simply not get any paperwork from the HOA. Simple as that.

PenneyM (Washington)
Posts: 41

Posted:

Quote:

Posted By KevinK7 on 08/12/2013 3:34 AM

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

See thinking like yours is prevalent in our community of members of the disband crowd. They don't listen to anyone of superior knowledge including our attorney. They think they are attorneys themselves.

PenneyM (Washington)
Posts: 41

Posted:

Quote:

Posted By SteveM9 on 08/12/2013 5:48 AM

Hi, I posted the original question but have since found out the state of SC has outlawed any new real estate transfer fees.
No new transfer fees can be made after 2/01/2012. The new act covers how older ones must be handled but I didn't read about that part since I just didn't want any new fees imposed on the sale of property within our HOA.

I would simply charge an adminitrative fee for all the paperwork needed.

Copies of ccrs, articles of incorporation, copy of our bylaws as well as the county auditor filing numbers for each, last years budget and financial statements and well as copy of our last tax return. Then there are the demand letters for current years dues we have to fill out. They also wanted our insurance policy and info on the bond. In some states a Resale Certificate is required by law, stating current monthly dues, anticipated capital expenses, reserve fund statement, lawsuits, outstanding judgements.

This takes alot of work to gather for the buyers. A mgmt company will certainly charge for this. If the buyer refused to pay the administrative fee, they will simply not get any paperwork from the HOA. Simple as that.

I know Steve. A management company would certainly charge for this.

It absolutely amazes me some of the comments here. We should NOT bring in a temp if the workload for volunteers becomes too much?!

What do these people think? We should quit our paid jobs?

PenneyM (Washington)
Posts: 41

Posted:

Here is an editorial from one of the Board members of one of the largest HoAs in Washington State. They are dealing with the same thing. Owners wanting to disband. Read the editorial "Dissovle SVCA, Not a Good Idea" on Page 3 which continues on page 5.

http://www2.suddenvalley.com/valley_views/2012/sv-views-2012-05.pdf

A quote: "If we gave up our corporate structure, we would no longer be protected from individual liability, and should someone be injured on our jointly owned property, this would put at risk each owner's assets"

Seems Mrs. Sample is getting similar advice. Now in our case, it is slightly different. We don't appear to have an outright deed. We have clouded title over these common areas. Our covenants state the developer would deed over the common areas after a certain number of lots were sold but he never did that. Other sections of the covenants and plat maps conflict and state we only have a beneficial interest, BUT as a condition of that beneficial interest, "shall henceforth carry with it the obligation to pay real property taxes, operate and MAINTAIN such roads, parks, common areas, and utility easements."

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

What do these people think? We should quit our paid jobs?

People think of manual labor differently than jobs that require thinking.

No hoa officer would ever spend 5 days a week maintaining the lawns, they would hire it out. But the same people think volunteers should donate the same amount of time to drawing up paperwork. LOL. A little perspective people!!! Its the same thing!

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

Unfortunately the law doesn't agree with you. When someone sues you, the law is all that matters. It's not how you feel, or if you're right or wrong. That is percicely why the corporation exists.

SharonH9 (Virginia)
Posts: 216

Posted:

Quote:

Posted By JonD1 on 08/12/2013 5:35 AM

Posted By KevinK7 on 08/12/2013 3:34 AM

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

Because of course Kevin you know more than the lawyer.

Your "highly doubting" this means little in a court of law.

And opinions carry little weight in the legal system.

Actually JonD1, opinions carry a lot of weight in the legal system. Most decisions are based on opinions because laws are often ambiguous. It's how a lawyer can argue their points and then a judge or jury rules on those points. A good lawyer will sway the judge or jury to form an opinion based on what and how it was presented. Then there is also the weight judges and juries give to an expert witness giving opinions.

The law is not an exact science. That is my opinion on the weight opinions carry in the legal system. ha ha!!

RichardP13 (California)
Posts: 1,767

Posted:

Very well said Sharon!

KevinK7 (Florida)
Posts: 1,343

Posted:

I disagree with the comments made about me that I either know more then a lawyer or refuse to listen to people of "superior knowledge." I find such comments to be insulting. I may not be an attorney but I have some legal background and am capable of reading and understanding laws and court cases.

Sharon - I agree. Our legal system is based on opinions. Two parties will come together because they have two different set of opinions. They acquire legal representation to argue those opinions in front of a judge. A judge will then take those opinions and formulate one of their own. That opinion could then be used in other cases.

Now the part about "superior knowledge:"

In my neighborhood someone with "superior knowledge" told me I had to pay an association any amount of money at any time at the discretion of the BoD regardless of membership or face legal action. I questioned that and the answer I got from this person with "superior knowledge" was that it was me paying my "fair share" and they cited a court case. That court case was a completely unrelated collections case in another neighborhood that had no bearings on my argument.

I went to court and witnessed this person with "superior knowledge" and see their argument play out in front of a judge. They argued they could do the things they were doing because people believed in the association, because of condo and trailer park laws (not HOA), and because they had no documentation for over twenty years but they wanted to continue doing things they way they have always been done (which was always wrong).

The judge did not agree with that opinion and ruled that the association had lacked any authority since the 80s.

Just because someone has a law degree doesn't mean they are an expert or someone with "superior knowledge." Not all lawyers are created equal. Also, a lawyer doesn't always give the right response - sometimes they give the response that either benefits themselves or benefits their party. When an association down the street from me wanted to convert to a mandatory association they contacted the attorney with "superior knowledge" that I mentioned before. That attorney told the BoD that it was a "gray area" of the law and that if nobody challenged it they could get away with it. Well someone did challenge it in another neighborhood and look what happened.

Another instance: I found that the BoD and their volunteers were notarizing their own documents and filing them with the comptroller. They were then using these documents as proof that they can enforce their rules (that they notarized themselves). I filed a complaint to the Office of the Governor citing applicable statutes and numerous documented examples. The association had their person of "superior knowledge" respond saying that because they were board members they could do what they wanted and that the Office of the Governor could not hold them liable and therefor their notarizations must stay. Their attorney also claimed that I was only filing this complaint out of revenge and that I had no interest in the neighborhood because I owned another property (irrelevant). The Office of the Governor agreed with me and found the documents to be improperly notarized, invalidated their documents, and warned the board members of their actions.

What I find funny is that some of the responses I had received from the posters of this website was contrary to what my attorney had stated and what the judge had ruled. For my Florida-specific posts I have mentioned the Marketable Record Title Act numerous times and I still get responses from people claiming that the covenants and restrictions did not expire and still apply despite an extremely specific citation and example. It seems to be that someone only has "superior knowledge" when they share the same opinion as yourself.

All I stated was that I disagreed with the opinion of the lawyer. I can see both sides of the argument but I find the one where the homeowners are not held personally liable more compelling and would think there would be a better case against the developer for not deeding the property in an instance where harm was done. I would think it would then be the responsibility of the developer to seek out restitution from an association, but if there was none, the developer could go after the individual homeowners, but even in that situation I think the homeowner would have a better case. The developer would have unclean hands in this situation - they failed to deed over the property.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By SharonH9 on 08/12/2013 3:46 PM

Posted By JonD1 on 08/12/2013 5:35 AM

Posted By KevinK7 on 08/12/2013 3:34 AM

Posted By PenneyM on 08/11/2013 6:10 PM
Sharon,

Well something our attorney informed me of last week. Should that happen and the corporation go belly-up, if anyone is harmed on those common areas, they could not sue a defunct corporation. Instead ALL OF OUR INDIVIDUAL PERSONAL ASSETS can be up for grabs in any litigation in the event someone is damaged on that common area property as we are still responsible for them.

There is no easy solution to any of this and every single avenue available to us is going to incur massive costs for all of us.

I highly doubt that an individual homeowner would be held personally liable if anyone is harmed on a common property (that is not deeded to the corporation), especially if they are no longer a member to said belly-up corporation (because its belly-up)

Because of course Kevin you know more than the lawyer.

Your "highly doubting" this means little in a court of law.

And opinions carry little weight in the legal system.

Actually JonD1, opinions carry a lot of weight in the legal system. Most decisions are based on opinions because laws are often ambiguous. It's how a lawyer can argue their points and then a judge or jury rules on those points. A good lawyer will sway the judge or jury to form an opinion based on what and how it was presented. Then there is also the weight judges and juries give to an expert witness giving opinions.

The law is not an exact science. That is my opinion on the weight opinions carry in the legal system. ha ha!!

My opinion would be you have been watching to many tv court shows.

And I would not plan my course of action because Kevin or someone else decides it is doubtful the community might face liability.

But feel free to do so yourself.

KevinK7 (Florida)
Posts: 1,343

Posted:

No need to be condescending. People like Sharon or I offer differing viewpoints. You may not like what you hear but it is important to keep an open mind.

It is always good to get second opinions especially involving serious circumstances such as the legal ramifications of disbanding. Besides, it is never wise to blindly follow. I would think for smaller matters, such as covenant enforcement or routine filings it wouldn't make a difference. It is also good to become acquainted with every angle of a matter to better defend your position. To disregard an opposing opinion as hogwash and continue can be potentially more damaging to the community.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By KevinK7 on 08/13/2013 7:34 AM
No need to be condescending. People like Sharon or I offer differing viewpoints. You may not like what you hear but it is important to keep an open mind.

It is always good to get second opinions especially involving serious circumstances such as the legal ramifications of disbanding. Besides, it is never wise to blindly follow. I would think for smaller matters, such as covenant enforcement or routine filings it wouldn't make a difference. It is also good to become acquainted with every angle of a matter to better defend your position. To disregard an opposing opinion as hogwash and continue can be potentially more damaging to the community.

"some legal background" Kevin just what does that mean?

It would suugest you have some above average knowledge of the law. How about HOA/Condo law? How much knowledge have you acquired?

The poster suggested their attorney stated the property owners may become liable in the case where the HOA were disbanded.

YOU suggested that was doubtful. Based on what laws, case law, decisions?

Than Sharon went on to detail how she sees the legal system working and explaining how the opinions of LAWYERS play a role in the legal system.
That had nothing to do with my point. IT WAS YOUR OPINION I STATED WOULD NOT MATTER. Not the lawyer's, not the judge's not those serving in the jury.

You can't appear in court and use Kevin from the HOATalk forum, is of the opinion the homeowners are not liable. That won't get you very far.

Sight unseen, I would go with the lawyer's opinion rather than someone I don't know or know from a internet website, someone who doesn't have any direct knowledge of the circumstances of this particular case, someone who might not know those particular state laws.

What you FEEL in court most times does not matter.

SharonH9 (Virginia)
Posts: 216

Posted:

JonD1 said:

My opinion would be you have been watching to many tv court shows.

Jon,

What superior knowledge about me do you have to form that opinion? (just kidding.)

We all have life experiences that give us knowledge about certain subjects. I worked in a law office when I was young, so I do have knowledge that others may not have because of that experience. I was also involved in a lengthy lawsuit between myself and my Association. It involved some legal proceedings, filings, motions, discovery, etc. I didn't just leave it up to my attorney to give the advice and manage the lawsuit. I was very involved by reading, listening, observing. It sounds like Kevin has had some similar experiences where he gained a lot of legal knowledge about the same. You seemed fairly certain that Out would lose her lawsuit as she was up against a paid professional attorney. But she won.

This is just a discussion forum. No one has to take anyone's advice on this forum. It's just the participants opinions.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By JonD1 on 08/13/2013 10:44 AM

Posted By KevinK7 on 08/13/2013 7:34 AM
No need to be condescending. People like Sharon or I offer differing viewpoints. You may not like what you hear but it is important to keep an open mind.

It is always good to get second opinions especially involving serious circumstances such as the legal ramifications of disbanding. Besides, it is never wise to blindly follow. I would think for smaller matters, such as covenant enforcement or routine filings it wouldn't make a difference. It is also good to become acquainted with every angle of a matter to better defend your position. To disregard an opposing opinion as hogwash and continue can be potentially more damaging to the community.

"some legal background" Kevin just what does that mean?

It would suugest you have some above average knowledge of the law. How about HOA/Condo law? How much knowledge have you acquired?

The poster suggested their attorney stated the property owners may become liable in the case where the HOA were disbanded.

YOU suggested that was doubtful. Based on what laws, case law, decisions?

Than Sharon went on to detail how she sees the legal system working and explaining how the opinions of LAWYERS play a role in the legal system.
That had nothing to do with my point. IT WAS YOUR OPINION I STATED WOULD NOT MATTER. Not the lawyer's, not the judge's not those serving in the jury.

You can't appear in court and use Kevin from the HOATalk forum, is of the opinion the homeowners are not liable. That won't get you very far.

Sight unseen, I would go with the lawyer's opinion rather than someone I don't know or know from a internet website, someone who doesn't have any direct knowledge of the circumstances of this particular case, someone who might not know those particular state laws.

What you FEEL in court most times does not matter.

HOATalk is a "positive place" to share ideas and learn - not a place to attack and discredit those who do not agree with you. You had this obsession with Mike enough to the point where you violated the terms of the forum to try and prove your superiority (creating an entire thread featuring his full name and case docket) and now you seem to have a problem with me because I offered an opinion. There was no need to make comments about television programs or snide remarks. I did not state any laws, case laws, or decisions but I made my previous statements based on the facts present: there are homeowners, there is a HOA, and there is a property that is owned by neither. The basics of contract law would tell us that if there was an issue with a property the parties involved would be the individual harmed and the owner, which in this case would be the developer. Now as I stated it is my belief that the developer could pursue the HOA based on an agreement they had where the HOA would take care of their property but if the HOA were dissolved then there would no longer be an enforceable agreement and you would not be able to force that agreement on another entity, i.e. the owners. The Developer could surely pursue action against the owners for allowing the HOA corporation to cease to exist. There is a possibility that the poster's attorney is correct but based on my observations of the facts presented I thought there was enough to warrant a second opinion, but that point is moot considering it does not seem the majority of the neighborhood is in favor of dissolution.

Now if you must know what my "legal background" is, I studied business law, foreign policy, and international environmental law (with a focus on the drafting, implementation, and enforcement of treaties) at the #1 school in the South, as well as other subjects such as construction contracting, architectural design, economics, and statistics. I have also spent the last nine years studying homeowner association law and policy (particularly in Florida) and my experience in my communities (both positive and negative) have given me some first hand experience, so yes, I do believe my background gives me some perspective on these matters.

GnomeX (Washington)
Posts: 253

Posted:

Kevin,

If you have all this experience then why make such absurd comments that Board members should not contract out any extra work? You can say you are insulted by some people's comments but even you have to admit that particular piece of advice was way out in left field.

Board members are not slaves. Many HoA Board's just make decisions and either have a full time paid staff or contract out most of the work, many times to management companies. We do everything in house as much as we can with volunteer Board members. Your idea that we shouldn't "farm out" work to a temp agency when it becomes too much, well I find that insulting.

It's as if you are saying we are not doing enough. I hear that line a lot from our disband crowd. But to hear it from some purporting to have all this "legal experience" seems more in line with armchair quarterbacking and not from someone with any real hands on experience with the amount of work involved in running a non-profit corporation HoA. But that's just my 2 cents.

SharonH9 (Virginia)
Posts: 216

Posted:

Why don't you ask community members for some help? It's possible to form a committee to take care of the paperwork for real estate transfers that are so time consuming.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By GnomeX on 08/14/2013 12:57 PM
Kevin,

If you have all this experience then why make such absurd comments that Board members should not contract out any extra work? You can say you are insulted by some people's comments but even you have to admit that particular piece of advice was way out in left field.

Board members are not slaves. Many HoA Board's just make decisions and either have a full time paid staff or contract out most of the work, many times to management companies. We do everything in house as much as we can with volunteer Board members. Your idea that we shouldn't "farm out" work to a temp agency when it becomes too much, well I find that insulting.

It's as if you are saying we are not doing enough. I hear that line a lot from our disband crowd. But to hear it from some purporting to have all this "legal experience" seems more in line with armchair quarterbacking and not from someone with any real hands on experience with the amount of work involved in running a non-profit corporation HoA. But that's just my 2 cents.

I was not implying no help should be acquired but I think the first avenue sought should be internal - what responsibilities can the board members and their volunteers undertake?

From what was explained it sounded like the amount of work per incident may amount to several hours of work and it sounded that if such incidents occurred routinely then information could be arranged to streamline the situation. The involvement of a temp sounded as if board members were too busy with their personal lives to perform some of those functions and the hiring of a temp was utilized as a cost saving measure to prevent the even more costly attorney from getting involved. I mentioned before that if the HOA was 100% in the right then the attorney should get involved, that is if state laws allow for the recovery of expenses. That way it is a win-win for the neighborhood.

I know that what I suggest is a bit of armchairing but when it comes to stuff like this I have high expectations due to the nature of the business. When involved in projects I enjoy researching laws and navigating government bureaucracies and I have put that extra amount of work to achieve my goals (I'm a bit of a workaholic). . I am of the mind set that directors should do more. I also understand that every neighborhood is different, but that's also stems from my opinion of HOAs. My advice is based off my experiences with my neighborhoods. That advice may not hold true for anyone else but iit offers a different perspective on things.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By SharonH9 on 08/14/2013 3:27 PM
Why don't you ask community members for some help? It's possible to form a committee to take care of the paperwork for real estate transfers that are so time consuming.

BTW I am PenneyM's husband. Currently I am the Treasurer but do just about everything else as well. I am a full time student and thus have more time than other Board members that work full time. Three years ago we terminated the office manager/bookkeeper whose salary was $23,000 a year. I've been doing all bookkeeping for 3 years now at no cost to the association, thus saving the association $69,000 in just bookkeeping costs. Our Bylaws forbid the Board members from being compensated for their time.

Concerning member volunteers: With just under 400 homes, we don't have that large of a pool of volunteers to begin with. We have asked for volunteers numerous times with few takers. Many years we are lucky to even have a full Board. Many Board members are gung-ho when they first come on then see the huge amount of work involved plus all the ridiculous expectations of people in this community and then Board members drop like flies. We currently lack a full Board and the other 2 Board members have very limited time to volunteer as they work full time jobs. They do what they can, when they can. As Kevin would say, they are "too busy with their personal lives". I take such criticisms as grossly lacking perspective. I don't blame the other 2 Board members. No one should ever feel belittled for putting the association second to their primary source of income.

Part of the problem is we have a mixed community of incomes and education levels. Low and middle class incomes. Illiterate high-school dropouts to college educated professionals. From rundown single-wide mobiles that look like they were stage props for the movie 'Escape From New York' to beautiful two-story log cabins.

The lower income people are often jobless, many on state assistance, and do not want to pay a dime nor volunteer anything to the association. They want the association shut down. The middle class income folks are too busy working. Old Boards thus were primarily retirees that had the extra time to volunteer for the Board, but they were often lacking any type of business sense and they squandered funds for years with needless spending thus leaving even some middle class professional folks skeptical of the association's future.

The lower income people are dragging down property values. Also a lot of middle class income folks are simply walking away from their underwater mortgages resulting in a rash of bank foreclosures. It was my idea to bring in the temp.

I am about to drop the hammer on those that refuse to pay and aggressively pursue all legal collection options. There are some people in here that are about to lose their homes after I hand their accounts over to our attorney.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By KevinK7 on 08/13/2013 5:19 PM

Posted By JonD1 on 08/13/2013 10:44 AM

Posted By KevinK7 on 08/13/2013 7:34 AM
No need to be condescending. People like Sharon or I offer differing viewpoints. You may not like what you hear but it is important to keep an open mind.

It is always good to get second opinions especially involving serious circumstances such as the legal ramifications of disbanding. Besides, it is never wise to blindly follow. I would think for smaller matters, such as covenant enforcement or routine filings it wouldn't make a difference. It is also good to become acquainted with every angle of a matter to better defend your position. To disregard an opposing opinion as hogwash and continue can be potentially more damaging to the community.

"some legal background" Kevin just what does that mean?

It would suugest you have some above average knowledge of the law. How about HOA/Condo law? How much knowledge have you acquired?

The poster suggested their attorney stated the property owners may become liable in the case where the HOA were disbanded.

YOU suggested that was doubtful. Based on what laws, case law, decisions?

Than Sharon went on to detail how she sees the legal system working and explaining how the opinions of LAWYERS play a role in the legal system.
That had nothing to do with my point. IT WAS YOUR OPINION I STATED WOULD NOT MATTER. Not the lawyer's, not the judge's not those serving in the jury.

You can't appear in court and use Kevin from the HOATalk forum, is of the opinion the homeowners are not liable. That won't get you very far.

Sight unseen, I would go with the lawyer's opinion rather than someone I don't know or know from a internet website, someone who doesn't have any direct knowledge of the circumstances of this particular case, someone who might not know those particular state laws.

What you FEEL in court most times does not matter.

HOATalk is a "positive place" to share ideas and learn - not a place to attack and discredit those who do not agree with you. You had this obsession with Mike enough to the point where you violated the terms of the forum to try and prove your superiority (creating an entire thread featuring his full name and case docket) and now you seem to have a problem with me because I offered an opinion. There was no need to make comments about television programs or snide remarks. I did not state any laws, case laws, or decisions but I made my previous statements based on the facts present: there are homeowners, there is a HOA, and there is a property that is owned by neither. The basics of contract law would tell us that if there was an issue with a property the parties involved would be the individual harmed and the owner, which in this case would be the developer. Now as I stated it is my belief that the developer could pursue the HOA based on an agreement they had where the HOA would take care of their property but if the HOA were dissolved then there would no longer be an enforceable agreement and you would not be able to force that agreement on another entity, i.e. the owners. The Developer could surely pursue action against the owners for allowing the HOA corporation to cease to exist. There is a possibility that the poster's attorney is correct but based on my observations of the facts presented I thought there was enough to warrant a second opinion, but that . point is moot considering it does not seem the majority of the neighborhood is in favor of dissolution.

Now if you must know what my "legal background" is, I studied business law, foreign policy, and international environmental law (with a focus on the drafting, implementation, and enforcement of treaties) at the #1 school in the South, as well as other subjects such as construction contracting, architectural design, economics, and statistics. I have also spent the last nine years studying homeowner association law and policy (particularly in Florida) and my experience in my communities (both positive and negative) have given me some first hand experience, so yes, I do believe my background gives me some perspective on these matters.

Well Kevin let me address your claim I somehow violated Crazy Mike's privacy. Guess you haven't had the time to follow along. The way I was able to obtain the information I posted was MIKE himself provided the link and details to his lawsuit. So all I did was follow up on any developments and guess what MIKE lost again. So with my limited legal knowledge my guess I don't risk any jail time. If you were attempting to make some dramatic point try again.

Now it would appear your claim you had "some" legal knowledge was accurate. SOME being the key word.

Studying business law was that one course, four courses, a degree, a minor area of study?
Pick one.

Do you have a degree in business law, law, para-legal?

Foreign policy how would that be relevant?
Drafting?
Enforcement of treaties?

"Studying homeowner association law" not that's interesting.......
For NINE years???

At a college or university was this done?????
Was this study part of any degree program???

If so just what degree did you obtain???? In HOA law???????

After those nine years of study?

Associates
B.A.
Masters
PhD

IMO the HOA attorney in Penny's case still offers a more informed opinion.
After all they have a state issued law degree you seem to have nothing even close to that.