HOA charge when selling house (loan, neighborhoods, buyer)

[cheryjohns]

Originally Posted by Liljo22

I know this is from a couple of months ago but since it has been bumped I will defend this. The Sienna Foundation Fund is the entertainment fund seperate from the HOA. It is a non-profit and supports the entertainment and activites that are put on around Sienna. This includes the many concerts, the city sized fireworks display they put on for the 4th, Snow Day, Spring Fling, and many other activities. It does benefit the homeowners 100% and makes Sienna that much more of a community for us who live there.

Agree. The conflict comes when people want to live in a community with a lot of extras like this - and then want the extras paid for with fairy dust and moonbeams. Splash pads, etc. cost money.

If someone doesn't want to pay the money, there are A LOT of neighborhoods without them.

[mikeyyc]

Originally Posted by cheryjohns

Agree. The conflict comes when people want to live in a community with a lot of extras like this - and then want the extras paid for with fairy dust and moonbeams. Splash pads, etc. cost money.

If someone doesn't want to pay the money, there are A LOT of neighborhoods without them.

I'm fresh out of moonbeams, but what's the current exchange rate with unicorn tears?

[IC_deLight]

Originally Posted by Liljo22

I know this is from a couple of months ago but since it has been bumped I will defend this. The Sienna Foundation Fund is the entertainment fund seperate from the HOA. It is a non-profit and supports the entertainment and activites that are put on around Sienna. This includes the many concerts, the city sized fireworks display they put on for the 4th, Snow Day, Spring Fling, and many other activities. It does benefit the homeowners 100% and makes Sienna that much more of a community for us who live there.

While defending the transfer fee based foundation and the claim that the foundation benefits the homeowners 100%, perhaps you can address some of the following points:

• are the directors of the foundation Sienna homeowners?
• do Sienna homeowners have any say as to who the directors are?
• are the records of the foundation open?
• are the meetings of the foundation board open?

... Kind of interesting that your version of "community" is rather cash-intensive and paid for involuntarily and exclusively by people who aren't part of the "community". The foundation and the for-profit vendors it contracts with benefit from churn in the subdivision since foundation revenue is dependent upon private transfer fees imposed upon sellers.

One might suspect that the foundation primarily benefits whoever appoints its directors.

[kcobra]

I'm purchasing a home in Waterview Estates (Richmond, a few miles south of the Westpark Tollway off Grand Mission/Harlem Rd). Title company says they must obtain a "Homeowner Association statement of account" which costs $247. That pretty much maxes out the following line in the contract addendum about HOA's me and the seller signed:

Fees: Except as provided in paragraphs A and D, Buyer shall pary any and all Association fees or other charges associated with the transfer of the property not to exceed $250 and seller shall pay any excess.

Paragraph A and D reads:

A: Buyer does not require delivery of the Subdivision information.
D: DEPOSIT FOR RESERVES: Buyer shall pay any deposits for reserves required at closing by the Association.

Couple of questions:

1. There should not be any other fees that I will have to pay for before or at closing from the HOA, correct? I know I will have to pay the seller, at closing, the pro-rated amount for the 2013 HOA yearly fee.

2. What is a "deposit for reserve"?

BTW, on a side note, BS like the above $247 fee is pretty bad. Sad that they can get away with charging that much just to fax an account statement.

Thanks.

[Lbjen]

The title company needs the statement to verify that the previous owner was not delinquent on their fees, since any arrears need to be deducted from the sellers proceeds at closing and paid off. If the HOA requires that all new owners place a certain amount in reserves, then that is also handled at closing.

Preparing the account statement does take time, since it has to be checked and verified before its sent, as its a legally binding document, but it doesn't take more than 45 minutes at best.

Whether you'll have to pay any more fees depends on the particular HOA and its policies. Get your realtor to check.

[trele6]

Grand Mission charged me a refinance fee, and a transfer fee when i sold my house.

[texas7]

Tuscan lakes in league city charges what they call a foundation fee when you sell. Hasn't stopped people from buying though.

[IC_deLight]

Originally Posted by trele6

Grand Mission charged me a refinance fee, and a transfer fee when i sold my house.

In all likelihood, the money went exclusively to the HOA "management" company. This "transfer fee" is nothing but a windfall for the vendors like the HOA management company. You might have problems when you try to resale because the FHFA prohibited investments in loans secured with property burdened by these junk fees. That "transfer" fee did not benefit your property in any way whatsoever. The management company business practices are bad for you and the marketability of your property.

[crone]

We are talking about 2 separate things here. There is a transfer fee for filling out forms. it is usually around 75$.

Several years ago, some master planned communities started another charge when selling. They added on a 1 or 2% of the sales price to go to the fund used for upkeep. Various communities have different ways of getting your money. One MPC in Houston wanted 3% of the sales price for their fund, but only from the first seller. There was an uproar, so it was lowered.

[IC_deLight]

Originally Posted by crone

We are talking about 2 separate things here. There is a transfer fee for filling out forms. it is usually around 75$.

Several years ago, some master planned communities started another charge when selling. They added on a 1 or 2% of the sales price to go to the fund used for upkeep. Various communities have different ways of getting your money. One MPC in Houston wanted 3% of the sales price for their fund, but only from the first seller. There was an uproar, so it was lowered.

There are several schemes employed. The "transfer fee" scheme and the "resale certificate" scheme. Also some organizations engage in additional fee pyramiding by refusing to deliver the resale certificate until you pay fees for additional forced "services".

All of these schemes are employed by local HOA management companies - or in the case of Sienna Plantation - the developer-controlled HOA corporation. These are all just rent-seeking behavior by parasites who benefit to the homeowners' detriment.

The transfer fee scheme demands a fee every time ownership of a house within the subdivision changes. The developers of Sienna Plantation and others in the Houston area came up with a percentage of sales price scheme. Many of the HOA management companies in Houston believe they are entitled to a fee when you sell your house. This is usually a fixed dollar scheme You did not contract with them and they are not providing you with any service. They serve only to take a cut of the sale of your property.

The resale certificate fee scheme was another scheme promoted by the HOA vendor-lobby group of HOA management companies. When you pay to request "subdivision information", you will also get a "resale certificate". The contents of the resale certificate are set by statute - however, management companies frequently do not comply with the statute and will often deliver unsigned documents. The sole redeeming value of a resale certificate is its estoppel effect - meaning that the HOA cannot pursue any claim or condition which existed on the property as of the date of preparation of the resale certificate which was not identified on the resale certificate.

Management companies (along with developers, e.g. Sienna Plantation) have come up with additional schemes, however, to jeopardize the sale of your house in order to skim more money from you the homeowner. One such program is the "Covenant Compliance Inspection" (CCI) program utilized by Senator Carona's "Associa" subsidiary management companies. Sienna Plantation has a similar scheme. In these programs, the homeowner's resale certificate is held hostage until the homeowner pays for an additional "feature" from the developer controlled HOA (e.g., Sienna) or management company (e.g., Associa subsidiary) involving "inspections". By jeopardizing the sale of the house, the management company or developer-controlled HOA corporation get more money from the homeowners. The HOAs in these places preserve value only for the management companies and developers, not for the homeowners.

In a number of subdivisions, the CCI program was terminated once the board members actually realized what was going on. The management companies benefiting from this scheme continue to solicit this "feature" from HOA board members who do not realize the primary beneficiaries or the nature of this scheme. Sienna Plantation continues to engage in this practice.

Sienna Plantation enforces a 1/2 percent of sales price to the "foundation" as a transfer fee:
Sienna Plantation Residential - Sienna Plantation Community Services Foundation (SPCSF)
Other subdivisions in the Dallas and Houston areas have similar fealty schemes.

Sienna Plantation holds a resale certificate hostage until such time as you pay for a "certificate of compliance" and subject your property to an inspection:
Sienna Plantation Residential - Certificate of Compliance Inspection
Sienna Plantation Residential - Resale Certificate