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KurtG1 (Texas)
Posts: 30
Posted:
I recently sold some property in a subdivision that does not have a mandatory POA. Participation is 100% voluntary and the association is not a real POA despite having Property Owners Association in the name. There is nothing in the CCR's that give the association any power to do anything. Actually there is no mention in the CCR's of a POA. This year the association has 15 members out of 600 homes. Yearly dues are $30 and they do not employ, because they cannot afford, outside help. My question is how are these guys able to charge a mandatory $100 transfer fee? Several real estate agents from the neighborhood say they have been seeing these charges for years but don't know why they are being charged. The title company officer said she didn't know either, just that the charge showed up on the Tax Certificate from an outside agency they use.
SheliaH (Indiana)
Posts: 6,964
Posted:
That should have been addressed before the closing - is the association now asking you for the money? If so, you may want to pose your question to them first, noting you were never part of the association, paid any assessments, etc., while you owned your home. If they're asking the seller to pay it and no one asked about this before the property changed hands, it may be too late to go after you. I would ask an attorney to look at the documents for more information - the answer might be hidden somewhere in there.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KurtG1 (Texas)
Posts: 30
Posted:
It is post closing and the fee was charged to the buyer. I'm not trying to recover the fee and the association isn't trying to collect. What I'm trying to understand is what is enabling them to collect the fee. Like I said, I can't find a Management Certificate or any other papers filed with the County. I did ask the VP of the association and he declined to answer.
DouglasK1 (Florida)
Posts: 2,046
Posted:
It's certainly possible that they have no real authority to assess the fee. Unfortunately, it will probably cost more than $100 to find out. First step would probably be a demand letter to the association asking under what authority the fee is collected. This doesn't necessarily need to come from a lawyer, but some people will pay more attention to it if it does. A lawyer letter alone will probably cost over $100. The next step could be to sue, but even small claims court filing fees might be enough to keep from really recovering much of the $100.

Unless the buyer wants to put effort and money into chasing this, you'll probably never know what authority they have to collect it.

Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Closing fees are quite common. Usually cited are the associations cost to prepare all necessary documentation such as an Estoppel letter. I have seen some as high as 1-3% of the purchase price.

Be the association voluntary or not, there are overhead expenses.
KurtG1 (Texas)
Posts: 30
Posted:
Why would they need to prepare an estoppel letter for a voluntary civic club? There would never be a balance due, for anything, either for the buyer or seller. What you are saying is that I could get 2 other friends, incorporate as Kurt & Friends Civic Club and start charging transfer fees.
SheliaH (Indiana)
Posts: 6,964
Posted:
If you aren't being charged and the buyer hasn't come after you, why do you care about the transfer fees? You're not in that association anymore, so it's up to current homeowners (the ones in the HOA, anyway) to talk to the board about changing it if that's what they want

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KurtG1 (Texas)
Posts: 30
Posted:
I care for several reasons. I still own another property in the community and I have family there also. I grew up there. I still have many friends that live there - some that moved away and then moved back. In the future I may also want to purchase property there for investment purposes. Please, let's not call it an HOA. It is a voluntary Civic Club. It was created way after the neighborhood was created. It has a total of 15 of 600 homes as members. The club has let its corporation status with the state lapse and it no longer has 501(c)(4) status with the IRS.

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