HOA wants to charge an up-front fee of over $400 before they will release the HOA docs

[IC_deLight]

Originally Posted by graygray

Update:

Finally was able to see the HOA docs. From the certificate, I found the charge is actually $429 for resale certificate and $500 for transfer fee.

Although by contract, the seller would pay anything beyond $100, it is still shocking that the 3-page certificate is worth of $429..... I don't know how much work needs to be done with transfer to generate $500 cost.

The resale certificate generally contains only information the management company already has. Push a button - generate another $429. The management company is already being paid for bookkeeping. Virtually everything else on the document is the same for everyone burdened by the same set of restrictive covenants.

Was your certificate signed? A common tactic is for the management company not to sign the document. A resale certificate isn't valid unless it is signed and contains the information set forth in Tex. Prop. Code §207.003(b). See, Tex. Prop. Code §207.001(5)
Items frequently left out (deliberately) include the reserves, budget & balance sheet, and the certificate of insurance.

Also if it is signed make sure it is properly signed. Often the management companies attempt to conceal their role in the mess so they will provide a document signed by someone claiming to be a "managing agent". However that person is invariably NOT and demonstrably not the managing agent. The managing agent is indicated in the county clerk records. If it is a business entity then the signature should be for the "[name of the management company], managing agent by XXXXXXX its authorized agent" (or officer or other title of the person working for the management company. Preferably you want the resale certificate in recordable form so that the estoppel is on recorded for yourself as well as subsequent purchasers.

Finally a common stunt used by management companies to pyramid fees is to suggest or insist upon an "inspection". You don't ever want to do that. First, they expect $$ for it. Second, they aren't licensed anything and they aren't qualified to interpret the restrictive covenants. Third, they are also data collecting for the purpose of harassing the owner or buyer at some point in the future. They will use the information collected to jeopardize a sale in order to get money or concessions from you. But most importantly, Tex. Prop. Code §207 only requires the HOA to identify claims or conditions it is aware of. The primary purpose of a resale certificate for the buyer is to provide an estoppel against the HOA. If the claim or condition is not listed on the resale certificate then the HOA is barred from bringing that claim later. Why pay so that they can search for and list items at their whim in order to jeopardize your sale? It is more valuable to have an estoppel barring the HOA from bringing a claim on claims or conditions that existed on the property at the time the resale certificate was prepared. The estoppel (bar) is as to anything not identified on the resale certificate. Why would you want to enable the HOA vendors to assert a claim against you or your future buyers? Worse, why would you pay them for that?

[Roadking2003]

Originally Posted by hitpausebutton2

not really understanding all the terms in this topic, but what good comes out of HOA other than pissing people off on what to do with their property? and charging outrageous rates for fees such as getting docs.

HOAs serve a very useful purpose. But if you don't agree, then don't buy into a neighborhood with an HOA.

[IC_deLight]

Originally Posted by Roadking2003

HOAs serve a very useful purpose. But if you don't agree, then don't buy into a neighborhood with an HOA.

Rather vague on the "useful purpose" weren't you?

If by "useful purpose" you mean for the purpose of shifting control of one's own property away from homeowners, shifting liability on to homeowners, and serving as a conduit for siphoning money from homeowners to HOA vendors like management companies and HOA attorneys then HOAs definitely serve those purposes.

As far as the part about buying into a neighborhood with an HOA, who are you kidding? That might have worked in the 70s or 80s but by the 90s virtually all new housing was burdened with involuntary membership HOAs. Austin's population has exploded in the meantime so for the vast majority of prospective homeowners the only choice they end up with is which HOA they are stuck with. HOAs certainly do not create value for the homeowner. They expose the homeowner to a very large potential financial loss. Buying a home burdened by an HOA does not equate to consenting to being mistreated, foreclosed on, "fined", getting threatening letters in the mail, or a host of other offensive conduct engaged in for the benefit of the HOA board (ego) and HOA vendors ($$$).

[graygray]

Originally Posted by IC_deLight

The resale certificate generally contains only information the management company already has. Push a button - generate another $429. The management company is already being paid for bookkeeping. Virtually everything else on the document is the same for everyone burdened by the same set of restrictive covenants.

Was your certificate signed? A common tactic is for the management company not to sign the document. A resale certificate isn't valid unless it is signed and contains the information set forth in Tex. Prop. Code §207.003(b). See, Tex. Prop. Code §207.001(5)
Items frequently left out (deliberately) include the reserves, budget & balance sheet, and the certificate of insurance.

Also if it is signed make sure it is properly signed. Often the management companies attempt to conceal their role in the mess so they will provide a document signed by someone claiming to be a "managing agent". However that person is invariably NOT and demonstrably not the managing agent. The managing agent is indicated in the county clerk records. If it is a business entity then the signature should be for the "[name of the management company], managing agent by XXXXXXX its authorized agent" (or officer or other title of the person working for the management company. Preferably you want the resale certificate in recordable form so that the estoppel is on recorded for yourself as well as subsequent purchasers.

Finally a common stunt used by management companies to pyramid fees is to suggest or insist upon an "inspection". You don't ever want to do that. First, they expect $$ for it. Second, they aren't licensed anything and they aren't qualified to interpret the restrictive covenants. Third, they are also data collecting for the purpose of harassing the owner or buyer at some point in the future. They will use the information collected to jeopardize a sale in order to get money or concessions from you. But most importantly, Tex. Prop. Code §207 only requires the HOA to identify claims or conditions it is aware of. The primary purpose of a resale certificate for the buyer is to provide an estoppel against the HOA. If the claim or condition is not listed on the resale certificate then the HOA is barred from bringing that claim later. Why pay so that they can search for and list items at their whim in order to jeopardize your sale? It is more valuable to have an estoppel barring the HOA from bringing a claim on claims or conditions that existed on the property at the time the resale certificate was prepared. The estoppel (bar) is as to anything not identified on the resale certificate. Why would you want to enable the HOA vendors to assert a claim against you or your future buyers? Worse, why would you pay them for that?

The certificate has the standard information required by the state code according to the electronic version I am having now. I will go back to check the actual document to look at the signature though. There is no inspection insisted on, probably because the property is fairly new...

[IC_deLight]

Originally Posted by graygray

The certificate has the standard information required by the state code according to the electronic version I am having now. I will go back to check the actual document to look at the signature though. There is no inspection insisted on, probably because the property is fairly new...

who signed?
what capacity did they claim to sign in?
were any claims or conditions listed?