Builder responsible for HOA Fees until percentage of development completed

Started by PamL4 • 8 replies • 823 views

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PamL4 (Texas)
Posts: 3

Posted:

I just moved into a new development that will have over 300 homes when completed. Currently it has 7 built, with 5 sold. I know I have read where the home owners are not responsible to pay HOA fees until a percentage of the development is completed/sold. Is this written in any laws, or would this be something that is written in the CC&Rs of this community?

AugustinD
Posts: 5,144

Posted:

If this provision exists, I think it would be in the CC&Rs/Declaration. If you post the CC&Rs/Declaration here, people here may be better able to help you.

Most likely this Texas statute applies: https://statutes.capitol.texas.gov/Docs/PR/htm/PR.209.htm . I do not see anything in the statute addressing your concern.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Pam,

Have you read the CCRs and Bylaws? You have copies, right?

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By PamL4 on 04/02/2019 8:39 AM
I just moved into a new development that will have over 300 homes when completed. Currently it has 7 built, with 5 sold. I know I have read where the home owners are not responsible to pay HOA fees until a percentage of the development is completed/sold. Is this written in any laws, or would this be something that is written in the CC&Rs of this community?

I would think that such a provision would be very unusual. I'm not familiar with Texas in particular, but I've never heard of a state that had such a law. Since the developer writes the CCRs, it would also be surprising if they exempted any owners from paying assessments.

Escaped former treasurer and director of a self managed association.

MarkM19 (Texas)
Posts: 1,459

Posted:

Pam,
The builder has responsibility for unsold lots. Once you buy your property you are responsible. You are now a member of this association. The builder will have complete control of the board for some time till a certain percentage is reached in sales. Check your Documents the exact answers should be in there. Never listen to the Sales team selling the lots. They will say just about anything to move homes.

PamL4 (Texas)
Posts: 3

Posted:

I have read the CCRs and Bylaws, and nothing is mentioned regarding this issue. I was just trying to see if there was a law that states this. It seems ridiculous to me to be paying for amenities that I won't have for at least a year or two. I do realize HOA fees are used for other things too, but the bulk of it is for the amenities that the builder won't start building until phase 3.

PamL4 (Texas)
Posts: 3

Posted:

I agree to never listen to the Sales people, they will say just about anything. Thanks for the information.

BarbaraT1 (Texas)
Posts: 821

Posted:

Sometimes the arrangement between the builder and developer is that the builder does not have to pay dues on a lot until the *home* being constructed on it is "substantially completed", not the entire Association. That may be what people have heard and are misconstruing.

MarkM19 (Texas)
Posts: 1,459

Posted:

PamL,
Another way to check and see is by looking at your closing statement. Depending on how often dues are to be collected either monthly or quarterly. The lender should have charged you in advance for the next dues payment if it is quarterly and the next 2 payments if it is monthly. They can take money that they are not legally instructed to take.

The negatives about be a early buyer. You knew when you bought that the Amenities were not built so that should not have been a surprise. You are right it may take a while for them to be built. Builders usually try and get them going quickly since it helps with sales.

The positives are usually you are buying at the lowest pricing that this development will have. When you see what buyers will be paying in 2 or 3 years even in Texas where property values do not rise like Ca. and other States you should see a noticeable gain in your investment.

I bought in my third new development and have always managed to not be first or last to purchase.

Please let us know what you find so that we can all get a little wiser by being on this blog.

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