In Texas POA, 1 vote per lot, but assessments based on lot size

RogerJ1 (Texas)
Posts: 550

Posted:

In our POA, each lot owner gets one vote in POA votes. No lot gets any more services than another but assessments are charged per acre with each lot rounded up to next acre. Lots range from over 1 acre to over 3 acres. So largest lots pay twice what the smaller lot owners do.

With little activity, assessments have been low historically, but a new Board is doing a lot of expensive things, so assessments are likely to go up. Would there be an legal challenge with different assessments when all lots get same services but same votes?

CathyA3 (Ohio)
Posts: 6,299

Posted:

No, this is not unusual. The assessments should be defined in your governing documents. Changing them would require an amendment that is approved by a majority of owners, often a super-majority of 67% or 75%. Some provisions in the governing docs may even require 100% agreement to change.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Another thing to consider: if your POA owns its own infrastructure (water, sewer, gas and/or electrical lines and streets), the larger lots will probably have a greater percentage of these things under or adjacent to the lot. So they do get "more" - it's just that people don't think about this stuff in terms of how many feet of the whatever that must be maintained by the POA.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By RogerJ1 on 12/22/2021 6:25 AM
In our POA, each lot owner gets one vote in POA votes. No lot gets any more services than another but assessments are charged per acre with each lot rounded up to next acre. Lots range from over 1 acre to over 3 acres. So largest lots pay twice what the smaller lot owners do.

With little activity, assessments have been low historically, but a new Board is doing a lot of expensive things, so assessments are likely to go up. Would there be an legal challenge with different assessments when all lots get same services but same votes?

RogerJ1, your thinking mirrors that of condominium covenants in general. Namely at condominiums: A unit's assessment depends on its square feet. But the unit's vote is also dependent on square feet.

Mostly though the deal is this: The courts say that everyone knew about the covenants before they bought into the HOA. The courts also say covenants are contractual terms. If a buyer did not like the covenants, then she/he should not have bought into the HOA.

What services does your HOA provide? I am curious to see if charging more to the larger lots has a rational basis.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By CathyA3 on 12/22/2021 6:46 AM
Another thing to consider: if your POA owns its own infrastructure (water, sewer, gas and/or electrical lines and streets), the larger lots will probably have a greater percentage of these things under or adjacent to the lot. So they do get "more" - it's just that people don't think about this stuff in terms of how many feet of the whatever that must be maintained by the POA.

None of that. Private wells. Own utilities. No community property.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By AugustinD on 12/22/2021 6:50 AM

Posted By RogerJ1 on 12/22/2021 6:25 AM
In our POA, each lot owner gets one vote in POA votes. No lot gets any more services than another but assessments are charged per acre with each lot rounded up to next acre. Lots range from over 1 acre to over 3 acres. So largest lots pay twice what the smaller lot owners do.

With little activity, assessments have been low historically, but a new Board is doing a lot of expensive things, so assessments are likely to go up. Would there be an legal challenge with different assessments when all lots get same services but same votes?

RogerJ1, your thinking mirrors that of condominium covenants in general. Namely at condominiums: A unit's assessment depends on its square feet. But the unit's vote is also dependent on square feet.

Mostly though the deal is this: The courts say that everyone knew about the covenants before they bought into the HOA. The courts also say covenants are contractual terms. If a buyer did not like the covenants, then she/he should not have bought into the HOA.

What services does your HOA provide? I am curious to see if charging more to the larger lots has a rational basis.

No services. No community property. Current expenses: office supplies, web site Board communication services (a mailing service and Zoom), Quickbooks, grass cutting of small area in front of entrances which are on private property and not on POA balance sheet, power for a pump for irrigation of the landscaping on those entrances, electricity to power about six light poles owned by utility company (POA just charged to power them but lights and poles provided by utility company)

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By RogerJ1 on 12/22/2021 6:57 AM

Posted By AugustinD on 12/22/2021 6:50 AM

Posted By RogerJ1 on 12/22/2021 6:25 AM
In our POA, each lot owner gets one vote in POA votes. No lot gets any more services than another but assessments are charged per acre with each lot rounded up to next acre. Lots range from over 1 acre to over 3 acres. So largest lots pay twice what the smaller lot owners do.

With little activity, assessments have been low historically, but a new Board is doing a lot of expensive things, so assessments are likely to go up. Would there be an legal challenge with different assessments when all lots get same services but same votes?

RogerJ1, your thinking mirrors that of condominium covenants in general. Namely at condominiums: A unit's assessment depends on its square feet. But the unit's vote is also dependent on square feet.

Mostly though the deal is this: The courts say that everyone knew about the covenants before they bought into the HOA. The courts also say covenants are contractual terms. If a buyer did not like the covenants, then she/he should not have bought into the HOA.

What services does your HOA provide? I am curious to see if charging more to the larger lots has a rational basis.

No services. No community property. Current expenses: office supplies, web site Board communication services (a mailing service and Zoom), Quickbooks, grass cutting of small area in front of entrances which are on private property and not on POA balance sheet, power for a pump for irrigation of the landscaping on those entrances, electricity to power about six light poles owned by utility company (POA just charged to power them but lights and poles provided by utility company)

Note for what you were wondering: The light poles are fairly knew relative to the Association (10 years versus 40 years when the per acre charged was formed.) When the per acre was formed, there was almost almost no expenses for the POA (I looked at minutes going back to 1980 - the entrances did not exist.)

PatJ1 (North Carolina)
Posts: 568

Posted:

We are condos. We have 4 different floor plans and 11 different dues calculations per our governing documents. Inside unit, outside unit, upstairs and downstairs, they all vary.

We don't have 1 vote per unit. It's all based on a portion of the entire community.

Have an attorney review your governing documents to determine the % of the vote. You may find that it's based on the lot size like the assessments are and not 1 vote per lot.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By PatJ1 on 12/22/2021 7:02 AM
We are condos. We have 4 different floor plans and 11 different dues calculations per our governing documents. Inside unit, outside unit, upstairs and downstairs, they all vary.

We don't have 1 vote per unit. It's all based on a portion of the entire community.

Have an attorney review your governing documents to determine the % of the vote. You may find that it's based on the lot size like the assessments are and not 1 vote per lot.

Its 1 vote per lot. Its small, 56 lots. I do not have the CCR handy but have read them many times, it literally says something like "1 vote per lot"

BenA2 (Texas)
Posts: 1,273

Posted:

As long as the POA is following the governing documents, I do not see how there could be a legal challenge. It may not be fair, but we live in a society that is not necessarily based on fairness. If you live in a bigger house or make more money, you pay more taxes and usually do not get more services. That is common in the U.S. and most countries.

Our HOA is the opposite. Each owner pays one assessment, regardless of how many lots they own. At one point we had an owner with seven or eight lots with homes that he rented. He paid the same amount as someone with one empty lot. It clearly was not fair but the CC&Rs were clear on the matter.

RogerJ1 (Texas)
Posts: 550

Posted:

I looked it up. It states, "The Assocaition shall have one class of membership" and "Under all circumstances, only one vote shall be cast for each Tract in the Subdivision."

RogerJ1 (Texas)
Posts: 550

Posted:

Tract is a lot.

RogerJ1 (Texas)
Posts: 550

Posted:

Here is how the assessment is written in the Declaration of Covenants, Conditions and Restrictions:

Based on the "uniform rate for each Tract" (see below), I am wondering if the POA can charge different amounts based on lot size. Later it states, "shall not exceed the amount of $200.00 per acre or any fraction thereof (the "Annual Assessment") but perhaps that just limits the tract assessment to the smallest lot acreage rounded up times $200. In other words, all tract charged the same with limit to $200 * 2 acres, which are the smallest lots rounded up????

Here is what it states completely:

6.03 Rate of Assessment

The annual and special assessments shall be fixed at a uniform rate for each Tract as hereinbelow set forth. The annual maintenance assessment pursuant to Section 6.01 (The document is in a pdf format that can not be copied, so I am typing this or I would include 6.01 and 6.02 but they just deal with filing liens and use of POA funds - neither goes into amount per lot, only 6.03 does) of this Declaration shall begin to accrue on each and every Tract as of the date the original Restrictive Covenants were recorded. All maintenance assessments on all Tracts will be assessed and collected annually, in advance, and shall be due and payable January 1 of the calendar year for which such maintenance charges are assessed. The rate at which each Tract will be assessed will be determined annually and may be adjusted from year to year by the Board of Directors, as the needs of the Subdivision may require, in the judgment of the Board of Directors of the Association. Such annual assessments shall be uniform and such assessment or charge shall not exceed the amount of $200.00 per acre or for any fraction thereof (the "Annual Assessment"), unless the Annual Assessment is increased as provided for in these restrictions. The Association may collect special assessments as well as annual assessments whenever the members of the Association so vote as provided herein."

Again, cannot type whole document, and for a full analysis, one would have to se it.

My question: is the ("the annual and special assessments shall be fixed at a uniform rate for each Tract") worth having an attorney explore as to whether all tracts should be charged the same (i.e. uniform) rate? Or would the "shall not exceed the amount of $200.00 per acre) clear that a different amount per Tract based on size is allowable under this CCR?

RogerJ1 (Texas)
Posts: 550

Posted:

I would think rate is a variable, and the variable could be based on lot size. So I would assume the CCR does allow different amounts, rate times acreage, per Tract versus a uniform amount per tract.

CathyA3 (Ohio)
Posts: 6,299

Posted:

As Ben said, sometimes the CC&Rs do favor some homeowners over others - in condos that pay for utilities out of assessments, it happens by definition. It's one reason the presence of a homeowners association usually has to be disclosed to buyers.

The problem is that the only option is to amend the CC&Rs, and that effort is probably doomed. The people who would want to amend are the ones who want to pay less, which means that others will have to pay more - and that's a really tough sell.

However, homeowners can and should take a really hard look at what the assessment dollars are being spent on and whether or not the CC&Rs allow it. I didn't see anything unusual in the OP's list of items aside from mowing an area of grass that is not owned by the HOA, but that's probably a trivial expense. If the board says that an assessment increase is needed, it's reasonable to ask why.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By RogerJ1 on 12/22/2021 6:25 AM
In our POA, each lot owner gets one vote in POA votes. No lot gets any more services than another but assessments are charged per acre with each lot rounded up to next acre. Lots range from over 1 acre to over 3 acres. So largest lots pay twice what the smaller lot owners do.

With little activity, assessments have been low historically, but a new Board is doing a lot of expensive things, so assessments are likely to go up. Would there be an legal challenge with different assessments when all lots get same services but same votes?

Bill Gates gets the same number of votes for president as someone on welfare.

LisaB21 (Texas)
Posts: 97

Posted:

What sort of "expensive things" is this new Board doing?

AugustinD
Posts: 3,698

Posted:

Can more than one house be built on a tract? What is the limit for how many houses can be built on a tract?

Roger, because of the wording in the CCRs, so far I think your arguments are too far from a slam dunk to justify legally challenging the status quo of assessing. Though you are certainly doing the correct homework to check with an attorney on the point. And I grant one never knows what a trial court judge will say.

KerryL1 (California)
Posts: 14,550

Posted:

Is the HOA obligated to reserve for streets/curbs/gutters? If so the larger tracts would have more lineal feet of frontage?

Our condo owners have a variable assessment schedule based on the sq.ft of each. The developer believed larger units (we have a dozen or so over 2,500sqft) would consume more gas & water than smaller ones. They also pay more for building insurance. (The average size is about 1,200sf.). One vote per unit. We have 200+ units.

The building insurance makes sense. But all units here are 2 bd. with the largest ones having a den. It's very rare for more than 2 ppl to live in a unit. So the gas (for cooking & fireplace) & water usage isn't much different based on unit size. The larger units do, of course have a lot more windows, that the HOA washes 2X/ann. It would have made sense for that to be a variable. We have 5 basic floor plans, but a lot of one-offs and many others where there only are 4 units of that size. So we have 30 units of difference sizes. No one has felt the need to try to recalculate the sf variable eliminating water & gas, but adding window wash even though we're rewriting our CC&rs right now.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is a case where size does not matter. It's not what the HOA uses for voting. Size of lots is used for collections not voting. So 1 vote per lot in a HOA. Size is then factored into how much one contributes to the "pie". Larger lots, more pie, and more funds contributed.

Former HOA President

SarahV4 (California)
Posts: 29

Posted:

My HOA is set up the same: one vote per lot, but different lots have different assessments amounts based on size.

Is it fair? Well, it really doesn't matter, unless someone wants to change the CCRs to change this. If someone did want to go through the effort to chang it, I'd be willing to consider a common assessment.

I do not see how there possibly could be a legal challenge to this - it was clearly spelled out in the CCRs when each person bought.

MaxB4
Posts: 3,513

Posted:

Unless the larger lots are more of an expense to the HOA, I would make all assessments uniform. I would guess that each lot might have the same frontage, but the extra acreage is in the back.

KerryL1 (California)
Posts: 14,550

Posted:

Roger can tell us if the street frontage is the same for all tracts. AND if the HOA is responsible for the streets.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By KerryL1 on 12/22/2021 6:29 PM
Roger can tell us if the street frontage is the same for all tracts. AND if the HOA is responsible for the streets.

No and no. The three largest lots are both on cul-de-sacs and all three might have the smallest road frontage and would be equal to other lots on cul-de-sac. Some lots front county roads while some front a state road. It has nothing to do with frontage.

The only thing that could make sense of it is that when the subdivision was less developed, a large grass cutting tractor operator was hired to clear the vacant lots, but each vacant lot owner was charged when the cutting occurred, so if that was the basis, they were double charged. I doubt that is the reason but is the only guess I would have.

KerryL1 (California)
Posts: 14,550

Posted:

Thanks for clarification, Roger. Your guess that the HOA at on time paying to keep the tracts mowed might explain the dfference sorta makes sense. Otherwise thee seems to be no reason for vain bleb assessments based on that size.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By RogerJ1 on 12/22/2021 7:28 AM
Here is how the assessment is written in the Declaration of Covenants, Conditions and Restrictions:

Based on the "uniform rate for each Tract" (see below), I am wondering if the POA can charge different amounts based on lot size. Later it states, "shall not exceed the amount of $200.00 per acre or any fraction thereof (the "Annual Assessment") but perhaps that just limits the tract assessment to the smallest lot acreage rounded up times $200. In other words, all tract charged the same with limit to $200 * 2 acres, which are the smallest lots rounded up????

Here is what it states completely:

6.03 Rate of Assessment

The annual and special assessments shall be fixed at a uniform rate for each Tract as hereinbelow set forth. The annual maintenance assessment pursuant to Section 6.01 (The document is in a pdf format that can not be copied, so I am typing this or I would include 6.01 and 6.02 but they just deal with filing liens and use of POA funds - neither goes into amount per lot, only 6.03 does) of this Declaration shall begin to accrue on each and every Tract as of the date the original Restrictive Covenants were recorded. All maintenance assessments on all Tracts will be assessed and collected annually, in advance, and shall be due and payable January 1 of the calendar year for which such maintenance charges are assessed. The rate at which each Tract will be assessed will be determined annually and may be adjusted from year to year by the Board of Directors, as the needs of the Subdivision may require, in the judgment of the Board of Directors of the Association. Such annual assessments shall be uniform and such assessment or charge shall not exceed the amount of $200.00 per acre or for any fraction thereof (the "Annual Assessment"), unless the Annual Assessment is increased as provided for in these restrictions. The Association may collect special assessments as well as annual assessments whenever the members of the Association so vote as provided herein."

Again, cannot type whole document, and for a full analysis, one would have to se it.

My question: is the ("the annual and special assessments shall be fixed at a uniform rate for each Tract") worth having an attorney explore as to whether all tracts should be charged the same (i.e. uniform) rate? Or would the "shall not exceed the amount of $200.00 per acre) clear that a different amount per Tract based on size is allowable under this CCR?

Roger

You said earlier the lots varied is size from over one acre to over 3 acres. Thus as I read the above the max assessment for a lot is between $400 to $800. I I am reading this correctly, if you went to same assessment would it be $600 per lot? Personally I do not see $200 up or down being a big deal. I spill that much at the bar........LOL

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By JohnC46 on 12/23/2021 1:45 PM

Posted By RogerJ1 on 12/22/2021 7:28 AM
Here is how the assessment is written in the Declaration of Covenants, Conditions and Restrictions:

Based on the "uniform rate for each Tract" (see below), I am wondering if the POA can charge different amounts based on lot size. Later it states, "shall not exceed the amount of $200.00 per acre or any fraction thereof (the "Annual Assessment") but perhaps that just limits the tract assessment to the smallest lot acreage rounded up times $200. In other words, all tract charged the same with limit to $200 * 2 acres, which are the smallest lots rounded up????

Here is what it states completely:

6.03 Rate of Assessment

The annual and special assessments shall be fixed at a uniform rate for each Tract as hereinbelow set forth. The annual maintenance assessment pursuant to Section 6.01 (The document is in a pdf format that can not be copied, so I am typing this or I would include 6.01 and 6.02 but they just deal with filing liens and use of POA funds - neither goes into amount per lot, only 6.03 does) of this Declaration shall begin to accrue on each and every Tract as of the date the original Restrictive Covenants were recorded. All maintenance assessments on all Tracts will be assessed and collected annually, in advance, and shall be due and payable January 1 of the calendar year for which such maintenance charges are assessed. The rate at which each Tract will be assessed will be determined annually and may be adjusted from year to year by the Board of Directors, as the needs of the Subdivision may require, in the judgment of the Board of Directors of the Association. Such annual assessments shall be uniform and such assessment or charge shall not exceed the amount of $200.00 per acre or for any fraction thereof (the "Annual Assessment"), unless the Annual Assessment is increased as provided for in these restrictions. The Association may collect special assessments as well as annual assessments whenever the members of the Association so vote as provided herein."

Again, cannot type whole document, and for a full analysis, one would have to se it.

My question: is the ("the annual and special assessments shall be fixed at a uniform rate for each Tract") worth having an attorney explore as to whether all tracts should be charged the same (i.e. uniform) rate? Or would the "shall not exceed the amount of $200.00 per acre) clear that a different amount per Tract based on size is allowable under this CCR?

Roger

You said earlier the lots varied is size from over one acre to over 3 acres. Thus as I read the above the max assessment for a lot is between $400 to $800. I I am reading this correctly, if you went to same assessment would it be $600 per lot? Personally I do not see $200 up or down being a big deal. I spill that much at the bar........LOL

I agree but they are doing things that will probably at least double it and possibly triple it, and it is the small lot owners primarily who are calling for those added cost changes. That is why I wanted to analyze the vote aspect of the equation.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Roger,

It seems fairly clear to me that the HOA will establish a uniform rate on a per-acre basis. Your assumption this may've been used to fund grass cutting makes sense but in 2021, it seems heavily-tilted.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By KellyM3 on 12/24/2021 6:43 PM
Roger,

It seems fairly clear to me that the HOA will establish a uniform rate on a per-acre basis. Your assumption this may've been used to fund grass cutting makes sense but in 2021, it seems heavily-tilted.

Yes, it tilted from a majority of lots not be developed to maybe 3 or 4 now.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

There is the "rub". Undeveloped lots may not be subject to paying DUES in some conditions. Most usually if the POA is still owned by the developer and they still own those empty lots. It still doesn't change the membership number. Which is what voting is based on. Size of lots etc...matter on how much you contribute to the budget.

Former HOA President