HOA Formed with out Residents Knowlege

Correct this to read:

It's not uncommon for residents of developments who are still being built out to think an Association doesn't exist as it's under control of the Developer . . .

My responses to ConchoP's questions:

1) I do not think when the Bylaws were filed is relevant here. I think whether back assessments are owed depends on other things. Furthermore, all the Declarations I have seen speak of the Bylaws and their validity. If the Declaration was properly filed, I think one could argue this was proper legal notice that the Bylaws existed or were in progress.

2) I think it depends in part on what was disclosed to you about the HOA, pursuant to Texas law.

3) Same response as 2)

ConchoP, Texas statutes do have a disclosure requirement. Here's a couple of excerpts that seem relevant to your situation.

PROPERTY CODE
TITLE 11. RESTRICTIVE COVENANTS
CHAPTER 207. DISCLOSURE OF INFORMATION BY PROPERTY OWNERS' ASSOCIATIONS
Sec. 207.003. DELIVERY OF SUBDIVISION INFORMATION TO OWNER. (a) Not later than the 10th business day after the date a written request for subdivision information is received from an owner or the owner's agent, a purchaser of property in a subdivision or the purchaser's agent, or a title insurance company or its agent acting on behalf of the owner or purchaser and the evidence of the requestor's authority to order a resale certificate under Subsection (a-1) is received and verified, the property owners' association shall deliver to the owner or the owner's agent, the purchaser or the purchaser's agent, or the title insurance company or its agent:
(1) a current copy of the restrictions applying to the subdivision;
(2) a current copy of the bylaws and rules of the property owners' association; and
(3) a resale certificate prepared not earlier than the 60th day before the date the certificate is delivered that complies with Subsection (b).
(a-1) For a request from a purchaser of property in a subdivision or the purchaser's agent, the property owners' association may require the purchaser or purchaser's agent to provide to the association, before the association begins the process of preparing or delivers the items listed in Subsection (a), reasonable evidence that the purchaser has a contractual or other right to acquire property in the subdivision.
(b) A resale certificate under Subsection (a) must contain:
(1) a statement of any right of first refusal, other than a right of first refusal that is prohibited by statute, and any other restraint contained in the restrictions or restrictive covenants that restricts the owner's right to transfer the owner's property;
(2) the frequency and amount of any regular assessments;
[snip by AugustinD for brevity]

Sec. 207.005. EFFECT OF RESALE CERTIFICATE; LIABILITY. (a) A property owners' association may not deny the validity of any statement in the resale certificate. The property owners' association's lien to secure undisclosed amounts due the property owners' association on the date the resale certificate is prepared shall automatically terminate as a lien securing the undisclosed amount. A buyer, buyer's agent, owner, owner's agent, lender, and title insurance company and its agent are not liable for any debt or claim existing on the preparation date of the resale certificate that is not disclosed in the resale certificate.
http://www.statutes.legis.state.tx.us/SOTWDocs/PR/htm/PR.207.htm

On the other hand, from the case law I have read, and consistent with what TimB4 wrote, the "mere" recording of a Declaration with the County is "proper legal notice" to a buyer of a new owner's obligations. I have heard some folks say that, if a buyer was not given a copy of the governing documents and state law requires it, then the claim the buyer (and subsequent owner) has is against the real estate agent or seller or both.

ConchoP, I think you want to go through all your closing documents and home in on anything said about the HOA, land restrictions, and so on. If you cannot turn up anything, then ask the HOA for a copy of your 2010 resale certificate. I think a competent developer or Declarant would keep copies and turn over same to any board.

So if the electric company was estimating the electric for over a year and finally got out to physically read the meter, found out they overcharged you and don't want to be responsible for your failure to know you were overpaying so won't offer a refund would be fair?

Is it fair that your assessment should be raised to cover the shortage created by me not paying my assessment?

It works both ways.


Yes you can.
And if it's within the States statute of limitations, you can even take them to court to force them to pay.

However, what would be fair would be to ask for the payment and if paid by mm/dd/yyyy there would be no late charges or, if needed, to offer to accept a payment plan for what is owed.

Your personal choice to not go after someone for a debt owed was your choice. The law would have supported you in collecting the debt had you chosen that as well. What others choose to do is up to them just as what you choose to do is up to you.

Sue,

Expecting that the Developer ran the Association under the Associations name, why wouldn't the new Board be able to go after unpaid assessments from members?

We never sent out "bills" to our members. Many HOA's don't because it's "understood" your in a HOA and you have to pay. Our HOA the payment box was at the mailbox cluster at the entrance of the HOA. It was pretty obvious that in our neighborhood but still got those who claimed "ignorance".

Sad to say but not all states make it mandatory for buyers to be aware they are buying into a HOA. It is viewed as the "Buyer's responsibility to be informed". So it's going to be hard to blame anyone for not knowing. The CC&R's and Articles of Incorporation are considered PUBLIC records. They are located at the County Courthouse or online. Those who have states that require the seller to provide the documents are at a bit better advantage. However, there are still those situations that one may not be aware such as foreclosures sales.

Surprised the developer hasn't been filing liens on those who have not paid. A HOA is typically funded by it's members for it's members. So not sure how your developer is funding this project and paying for common areas if he's not collecting dues. It may be time to request what records you can. Under developer control that may be limited but still should have some records to view.

Sue

I believe in a transfer, the HOA takes over the assets and liabilities from the Declarant. I also believe the past dues can be collected assuming one wanted to.

I had a situation one time where I was selling the right to a lease/rent I had on a building. The building owner had to approve the sale. I had a auto rent increase in my lease which the owner never asked for and I never paid. Come lease transfer time, the owner wanted the back payments. My lawyer was there and he looked over the lease and told me the owner was correct. Just because he never asked for them, did not mean he was not entitled to it.

Now, I should add that sometimes a Declarant doesn't physically set up an Association until the transfer (although they should) and operates the Associations under the name of their company. That isn't the right thing to do but it does happen.

In such a situation, then I would agree with Sue that technically the company changed and the debt is owed to the previous company, not the current one. However, I'm not positive how a judge might rule if such an issue made it to court.