HOA wants to charge an up-front fee of over $400 before they will release the HOA docs (Austin: foreclosed, how much)

[graygray]

Originally Posted by FalconheadWest

The resale certificate is usually paid by the seller. The HOA addendum gives the option, but why would a buyer agree to pay something that the seller could use for another buyer if you backed out of the contract. That's why sellers pay because the resale cert is good for 90 days. What you might be thinking that you are responsible for $100 is the transfer fee. The addendum states the buyer will pay "up to $X" and you get to negotiate a number.

Resale certificate and transfer fees are separate items and addressed separately in the addendum.

That is correct, the "up to $100" is included in the addendum. I didn't read the contract word by word, and was thinking it is pretty standard. So the fee paid either by the seller or the buyer eventually depends on how well the agent understands the contract and how willing they are defending their customers, right?

[IC_deLight]

Originally Posted by graygray

So homeowners in the HOA work with the management company to rip off the other homeowners intentionally or unintentionally?

yes they expose the homeowners to the unscrupulous vendors. The HOA attorney and management company "advise" their client HOA corporation on the management company agreement. However, the HOA attorney and management company are part of the same trade group. They are operating in their best interests, not their client's.

[FalconheadWest]

Originally Posted by graygray

That is correct, the "up to $100" is included in the addendum. I didn't read the contract word by word, and was thinking it is pretty standard. So the fee paid either by the seller or the buyer eventually depends on how well the agent understands the contract and how willing they are defending their customers, right?

I don't agree with the words "defending" or "customers", but a good agent will always be "negotiating for their clients" to get the best deal possible. I always warn my clients that the resale certificate is traditionally a seller's expense and the transfer fee is traditionally the buyer's expense (in my market), but if I can get the other party to pay the traditional fee, it's a win.

[IC_deLight]

Neither is a legitimate expense. They are both windfall fees for the management company.

[graygray]

Originally Posted by FalconheadWest

I don't agree with the words "defending" or "customers", but a good agent will always be "negotiating for their clients" to get the best deal possible. I always warn my clients that the resale certificate is traditionally a seller's expense and the transfer fee is traditionally the buyer's expense (in my market), but if I can get the other party to pay the traditional fee, it's a win.

Thanks, that makes sense!

[graygray]

Originally Posted by IC_deLight

yes they expose the homeowners to the unscrupulous vendors. The HOA attorney and management company "advise" their client HOA corporation on the management company agreement. However, the HOA attorney and management company are part of the same trade group. They are operating in their best interests, not their client's.

OK, it is very typical in all industries when the amateur work with the professionals..

[Roadking2003]

Originally Posted by Bo

Sounds like it's a good opportunity for the management company to make some money in a way that won't anger the current members or the board of directors.

OTOH, there is some legwork involved, so no one should expect them to assemble documents for free.

They aren't going to make much money off a $400 fee.

[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.

[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.

[hound 109]

Wow....it sounds like a lot of people don't know the difference between an HOA and an HOA Management Company.

Cully has provided some good info (& opinions).

Originally Posted by cully

To clarify, when I said doesn't look like Texas laws say exactly what the max charge will be for this packet....Texas laws do say there can be a charge to assemble, copy and deliver the large number of items in such a packet. But Texas laws don't state a max amount allowed.

It is concerning, graygray, that you speak of "so called" HOA docs. And that you ask what is the HOA docs resale package or cost for. I can't tell for sure if you are the buyer or seller. In states I'm familiar with the seller, who is the owner, generally is expected to provide and pay for up-to-date documents which can be a sizable package including all the most recent financials, covenants, restrictions, bylaws, any lawsuits against them, etc. However, sometimes the seller's or buyer's realtor will pay or the buyer will pay and that is acceptable in states I'm familiar with.

But I get the feeling you're not familiar with HOAs, so you may be the buyer. If so, you need to educate yourself on all the issues involved, not just in obtaining your documents before settlement, but actually in the docs. You need to be concerned about reading them.

I don't like the big brother thing....the homeowners who have a board, can be fine. Then the board hires a manager who does or doesn't live in the community, can be okay. But then another layer of protection, a dispassionate company to manage the resale package for the manager...for me, depends on the size of the association. An entire city as an Association like Reston, Va... understandable. But for most, personally don't like it.

For one thing, there's the extra charge whether personally or as part of your monthly dues. For another, the lack of connection that I have heard of from some people where there's a problem that has to be worked out between the buyer, the seller, the board, the manager, and the package keeper with no true concern and lots of paperwork back and forth till it's past closing time.

About CondoCerts. As with most things, one pays for every layer added. So you pay for CondoCerts. Here's what they do: "CondoCerts provides reliable, round-the-clock online access to all HOA governing documents and critical project data for lenders, mortgage bankers, escrow officers, title companies, real estate agents and homeowners in need of information from MGM’s managed communities."

"CondoCerts... delivers the required documents and other requested data. CondoCerts has become the de facto standard for disseminating documents/data to meet the timely needs of the real estate community...lenders, title and escrow companies and real estate agents have signed up and are using CondoCerts nationwide today. "

How big is the association you're talking about? And is it an HOA of single family homes or is it a condo of single family/townhouses/apts?

So it sounds like the HOA management company (who might manage 20 or 200 HOAs) takes a cut and that Condo Certs (who might provide their service to 200 or 2000 condo HOA management companies) takes a cut. I doubt that the HOA (who are the folks who live there) make a dime.


Glenn Ross: I think $400 is a tad high, but the charge is normal and I always factor it into my buyers' closing costs unless we negotiated a different outcome in the contract. As a former HOA board member, I believe most of the charge is passed along to the HOA.

As mentioned above by IC.....very little, if ANY of these junk fees are passed along to the HOA.


IC Delight: The HOA attorney and management company "advise" their client HOA corporation on the management company agreement. However, the HOA attorney and management company are part of the same trade group. They are operating in their best interests, not their client's (the HOA).

Good point.


Roadking: They aren't going to make much money off a $400 fee.

If the management companies charge this fee hundreds (or thousands) of times, they're making a killing. And (based on the misconception of many who have posted), the HOA is being accused of charging & receiving this Junk Fee.


GrayGray: 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.

Wow. So the Management Company is charging the buyer AND the seller (who is actually a member of the HOA) these junk fees (which total $929???). A charge to pay for a $13 an hour person to pull and shuffle some papers for 3-5 min. What a Racket.

(from Wiki - A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not actually exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. Conducting a racket is racketeering. ... defined as committing multiple violations of certain fraudulent activities.)