HOA charge higher fees to non members?

Looking forward to the answers!

Craig - is there a reason a well-funded HOA would not benefit your property values? Would it be a good governance mechanism to pay the bills to keep access open and clear and well maintained?

I’m not arguing for or against, I always encourage communities to use HOA’s, my question is if this is ok. To tell owners they are going to have to pay a higher road use fee if they do not sign the covenants. I wanted to see if there was any precedent and if this would open up the HOA for any challenge in court.

What's the alternative.
It remains optional. Some join. Others don't. That battle goes on and on and on. Some think everyone should join. Others say no. On and on and on.
People will have their nose out of joint for a while this way - but at least you're not going to get stuck with an administrative PITA that never gets resolved.

What's going to be the criteria under some other system. Let's pick an example where the fees are $100 for full service and $80 for roads only. You'll get flak over that because one is too high or the other is too high. Then when it comes time to raise fees at some time in the future, you'll go through the same process once again. Why did you this? Or why did you that? Or more likely - You shouldn't have this? Or you shouldn't have that?

Or maybe you should make it $100 whether you join or not. What benefit does that give you down the road.

Personally, I think the packaging of the message can minimize some of the sting. For example, let them know that if you wind up with a multi-tier system, that will add around $10 per month per household (or something like that) in additional administrative costs. The fewer variations in your fee structure, the leaner you can run your operation (and the lower the cost that gets passed on to homeowners).

There are many ways to say it nicely. But at the end of the day, people can pay the lower amount or the higher amount. Someone will always be griping when there's a difference in fees.

Craig

I doubt you will get anyone to join under the higher roads only. Why would anyone join under this option? I might alo question its legality but another story.

Might make some sense to have road only as a lower than standard dues assuming you could show what the extra difference buys someone.

I say make the dues as low as possible so all people consider joining.

I would also expect a road use fee to include things beyond the cost of routine road maintenance. For example, HOA members pay a portion of their fees into the reserve fund which will cover, among other things, major road work/resurfacing and the like. In short, the "higher fee" may not in fact be higher when you include all of the things that are included in HOA assessments but which are largely invisible to members who don't really dig into the finances (and I strongly suspect that is the vast majority of homeowners).

Craig

It will only be illegal if and when a court says so.

Hahaha, our HOA is pretty good right now. Most folks want it there to manage the property while leaving everyone else alone and they’ve done a good job at that. However, I don’t like this type of “sign here or else we’ll make you pay” type of attitude. Which, is exactly how most HOAs operate.

Is this a change to the CC&R's that is being proposed? I am a bit confused. Is your HOA a volunteer or mandatory HOA? If it used to be mandatory, then simply updating doesn't change that. Unless your new updates is for making the HOA volunteer. What is the percentage required to make the changes to the CC&R's?

I hope you are talking to a lawyer familiar with HOA laws, corporate, or contractual law. A Real Estate attorney isn't the way to go in a HOA. Your not dealing with real estate. Your dealing with contractual/corporate laws.

There also isn't a place to "sign" into a HOA. Once the CC&R's are filed/re-filed then everyone is to adhere to them. It's related to the deed filed in the county. So hope you don't think there is some kind of piece of paper one signs to be a HOA member.

They are signing for the changes to the CC&R's not joining the HOA. A document has to be signed to file the CC&R's at the court house. Sounds like they are updating the CC&R's overall. Which I don't think excuses anyone out of membership.

Could it also be that the HOA is saying "If we don't make these changes to the CC&R's the fees for road maintenance will be $500 per individual than $400 if HOA CC&R's are re-filed"? The cost variance meaning the overall cost is divided up better by a larger # than individual expense?

Something just seems a bit off here. I don't see why individuals would pay more as the math makes no sense.

I asked if the HOA Dues and the Road Fees were the correct amounts and this is what I was told

“That is correct. Those that opt out will pay the road use fee and will NOT have use of any HOA property. ( roads Lake, common area.) If they don't pay the road use fee. they will be trespassing. Also, the rules of the HOA will still apply to them. The dues will be $ 400 and the road use fee will be $500 per year”

I asked them this question “If the covenants still apply to all owners who opt out, why have anyone sign the new one?”
This was the response

“This is what is required to get the covenants into effect. The owners have to be given a choice to join or not. But if they choose not to join then we still have them help support the funding to maintain and improve our subdivision . This is to ENCOURAGE them to be in the HOA. We have spent the last 2 years getting a way to reinstate the covenants. This is legal and has been challenged in court and has been upheld by the judges.”

Not sure, but I would guess the Board is taking advise from a lawyer either hired by them or one used by the property management company.