Get 2 months of free community web site hosting from Community123.com!
Saturday, June 24, 2017
Get 2 months of free community web site hosting from Community123.com!


SBCA: Free education for HOAs and condos on satellite placement issues.
(National Trade Organization)
Helping HOAs, condos and property managers with satellite placement issues since 1986.
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Developer never transferred land to the HOA.
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
SueC4
(Texas)

Posts:32


03/20/2017 11:50 AM  
The developer of our HOA never transferred by warranty deed the land to the HOA. He filed the Covenants covering the land that are a Master Agreement Covenant. The lakes in our subdivision were transferred by Special Warranty Deed, but they were left as tracts, never platted. The covenants state the tracts cannot be considered common area. The Realty Company holding title sold lots to builders and individuals never mentioning the name of the HOA in the deed.

Is this a legit HOA?
SheliaH
(Indiana)

Posts:1782


03/20/2017 12:43 PM  
That's a legal question - ask an attorney.
SueC4
(Texas)

Posts:32


03/22/2017 9:04 AM  
OK. One wants $500,000 down and title to my house. The other wants $1,000 a page to read what I found at the Court House. Any other suggestions?
LarryB13
(Arizona)

Posts:4099


03/22/2017 9:37 AM  
Posted By SueC4 on 03/22/2017 9:04 AM
OK. One wants $500,000 down and title to my house. The other wants $1,000 a page to read what I found at the Court House. Any other suggestions?




See if your state bar or local bar associations have a referral program. Also, file ethics violation complaints against both of those attorneys; their fees are way out of line.
JohnC46
(South Carolina)

Posts:6553


03/22/2017 9:58 AM  
Posted By SueC4 on 03/22/2017 9:04 AM
OK. One wants $500,000 down and title to my house. The other wants $1,000 a page to read what I found at the Court House. Any other suggestions?




Sue

Basically they are telling you that they do not want you as a client.
JanetB2
(Colorado)

Posts:2849


03/22/2017 10:32 PM  
Ask your local Attorney General your question. If it is possible real estate fraud you can possibly obtain an answer or result with no out of pocket expense.
SueC4
(Texas)

Posts:32


03/24/2017 2:50 PM  
Thanks. The lawyers didn't like the fact I went to the Court House myself and found conflicting documents. They also stated that no one can sue a developer because they are so much richer than a homeowner.
JanetB2
(Colorado)

Posts:2849


03/24/2017 9:22 PM  
Posted By SueC4 on 03/24/2017 2:50 PM
Thanks. The lawyers didn't like the fact I went to the Court House myself and found conflicting documents. They also stated that no one can sue a developer because they are so much richer than a homeowner.



LOL ... I and others in my last HOA sued two developers at once in same lawsuit. They do not scare me . You just have to make sure you are right and they are wrong.
LarryB13
(Arizona)

Posts:4099


03/25/2017 10:39 AM  
Posted By SueC4 on 03/24/2017 2:50 PM
Thanks. The lawyers didn't like the fact I went to the Court House myself and found conflicting documents. They also stated that no one can sue a developer because they are so much richer than a homeowner.


Real estate developers are four-flushers. I have yet to see one with any money of his own. They can borrow money for land. They can borrow money for construction. But they cannot borrow money to pay for attorneys so they draw up their own documents by copying from others. This lack of input from lawyers is what leads to conflicting documents.

Ignore whoever told you that you cannot sue the developers, although collecting a judgment from one of them may be a bit difficult.

JanetB2
(Colorado)

Posts:2849


03/25/2017 7:33 PM  
Posted By LarryB13 on 03/25/2017 10:39 AM
Posted By SueC4 on 03/24/2017 2:50 PM
Thanks. The lawyers didn't like the fact I went to the Court House myself and found conflicting documents. They also stated that no one can sue a developer because they are so much richer than a homeowner.


Real estate developers are four-flushers. I have yet to see one with any money of his own. They can borrow money for land. They can borrow money for construction. But they cannot borrow money to pay for attorneys so they draw up their own documents by copying from others. This lack of input from lawyers is what leads to conflicting documents.

Ignore whoever told you that you cannot sue the developers, although collecting a judgment from one of them may be a bit difficult.



LOL ... And many attorney who will make those statements are ones who work for potentially developers. I have found in my area many of those will tell you big fat lies. I had a number of attorneys try to tell me with one section of law when looking for one that the developer could do as they wished. As soon as they made that statement the door did not hit me in the tail end on my way out their door.


NigelB
(Texas)

Posts:186


03/26/2017 9:53 AM  
Posted By SueC4 on 03/20/2017 11:50 AM
The developer of our HOA never transferred by warranty deed the land to the HOA. He filed the Covenants covering the land that are a Master Agreement Covenant. The lakes in our subdivision were transferred by Special Warranty Deed, but they were left as tracts, never platted. The covenants state the tracts cannot be considered common area. The Realty Company holding title sold lots to builders and individuals never mentioning the name of the HOA in the deed.

Is this a legit HOA?



Maybe, maybe not.

Most "lakes" in subdivisions are actually retention ponds or detention ponds and are built for the purpose of storm drainage. You need to take a look at the plat for the subdivision, many Texas counties have an online portal where you can find out who owns title to the land.

If those "lakes" were built for drainage reasons, you don't want the HOA owning them unless absolutely necessary, if you are in a Municipal Utility District, it might be that the developer transferred title to the MUD which would be responsible for maintenance.

in our subdivision, the developer transferred three tracts to the HOA, but the amenity lake was transferred to the MUD, and we have a written agreement with the MUD for its use.
SueC4
(Texas)

Posts:32


03/27/2017 11:06 AM  
I'm afraid every attorney in my small town works for the developer.

We are within the city limits, but the City will not own or maintain retention ponds. It's not platted so the City can't "see it" as they said and left it to us although they have extraterritorial jurisdiction over drainage issues.

Another issue concerns financing. Texas allows liens on homeowners property and over 80% of my neighborhood purchased their home as "purchase money" or with a "vendor lien", still effective on the deeds. They also purchased used owner financing,( this backs up my claim of Leasehold estates in a HOA) although they could qualify for a traditional mortgage based on their jobs alone. Lawyers, Professors and Real Estate agents. Those types of financing gives the buyer equity ownership, not title ownership. So I'm in the 20% title owners. They are "renters" until their loan is paid. And still others get equity loans to draw the profit out of their house. So when a neighborhood goes bankrupt over a federal legal issue, who pays? Looks like the "renters" walkout and leave it to the builders or bankers holding title.
TimB4
(Virginia)

Posts:14072


03/27/2017 12:42 PM  
Posted By SueC4 on 03/27/2017 11:06 AM

I'm afraid every attorney in my small town works for the developer.




Then you need to look outside of your small town.
BobD4
(up north)

Posts:904


03/27/2017 2:54 PM  
Posted By SueC4 ... Is this a legit HOA?




SueC4 TX Respectfully, what are you asking about whatever Home Owners Association ? Are you asking "Can it have any legal power or 'vires' or jurisdiction if it is NOT literally the owner of record of the "common area" ?"

Are you asking "Even if whatever Association is NOT the owner of record, does it have any legal right to force the end - user private owners to Pay/comply/pass along such obligations to transferees ? "

. . . or "Can it have any legal right to govern, regulate etc if such body is not even cited within the Covenants on titles to either the common lands nor end-user private properties ?"



JanetB2
(Colorado)

Posts:2849


03/27/2017 8:28 PM  
Posted By SueC4 on 03/20/2017 11:50 AM
The developer of our HOA never transferred by warranty deed the land to the HOA. He filed the Covenants covering the land that are a Master Agreement Covenant. The lakes in our subdivision were transferred by Special Warranty Deed, but they were left as tracts, never platted. The covenants state the tracts cannot be considered common area. The Realty Company holding title sold lots to builders and individuals never mentioning the name of the HOA in the deed.

Is this a legit HOA?


First what you need to do is review your State Laws regarding Home Onwer Associations. Then also your governing documents. In my state the developer under the State Law is supposed to transfer all common area property to the Association prior to selling any lot in the Association. In my last association the original developer did not do this. The second developer at one point wanted to start charging HOA fees. My question to them was what are the HOA fees for? They said was for common area property. My response was the HOA currently did not own any common area property ... they did. And until we owned they could not assess fees to pay for said property. LOL ...

You need to know your Laws and Documents and outsmart the developer not acting in good faith.
SueC4
(Texas)

Posts:32


03/28/2017 3:11 PM  
JanetB2 - The new developer never had authority to amend the covenants after foreclosure of the neighborhood. The other directors wouldn't approve, so the developer sold everything to builders or individuals as Leaseholds according to the court house documents.He sold everything including the fixtures, sewers, all right and title, so no common area. That's not a HOA by IRS standards. It could qualify for a IRC 528 but the 501(c)4 gives tax free property to the landlords. I have withheld the assessment since I found out, but I state I will not continue to pay into a fake corporation. I will pay under protest and duress, but I'm not going along with the fraud. I am not protesting I want anything free. I asked them to tell me who I make the check out to since it's not a HOA and it was more of a "fix" according to the bankers.
Florida and Texas have similar laws and issues. There is one other case like this in Florida, but they weren't trying to get tax free property and pretend there wasn't a ground lease running under some homes and some not. Florida's issue just stated they had to go leasehold because the previous HOA wouldn't let them amend.I have over 1500 court house, city, and planning and zoning documents in date order that prove my case. They dropped the corporate charter for 5 years but still kept collecting and assessing. They know they aren't a 501c4. They are a nasty bunch of people too. Mean as hell, but they have a lot to hide.
SueC4
(Texas)

Posts:32


03/29/2017 1:47 PM  
Got a bill for $1400.00 from the associations attorney to put a lien on my property. I think I will complain to the attorney general about that legal fee.
JohnC46
(South Carolina)

Posts:6553


03/29/2017 7:19 PM  
Posted By SueC4 on 03/29/2017 1:47 PM
Got a bill for $1400.00 from the associations attorney to put a lien on my property. I think I will complain to the attorney general about that legal fee.




What caused them to lien?
SueC4
(Texas)

Posts:32


03/30/2017 11:31 AM  
The Fact I gave them documents that stated all the amenities were sold in a leasehold agreement to builders and individuals and there was no common area. So who legally can assess and collect if the HOA 501c4 was never established? The covenants and leasehold ran the same day, so the HOA was completely bypassed. I asked them to tell me who to make the check to. Their leasehold contracts state they are responsible to defend their own property. There is no HOA. I gave them a list of 50 items that detailed the fact they faked the HOA. Plus the hidden landlords are vicious people, that was a red flag to me. No one accuses Board Members,I was President then, of felonies over repairing a fence. Their retaliation exposed the bigger problem. The story is 4 years long.
SueC4
(Texas)

Posts:32


03/30/2017 11:37 AM  
Oh and 80% of the neighborhood equity strip their home and assets. No one would sue someone that has zero assets, but they sit on the board of a HOA they faked and do whatever they want. Only 20 out of 120 own their home outright and are exposed financially. I am one of them. I have to get an equity loan to protect my assets.
JohnC46
(South Carolina)

Posts:6553


03/30/2017 12:47 PM  
Posted By SueC4 on 03/30/2017 11:31 AM
The Fact I gave them documents that stated all the amenities were sold in a leasehold agreement to builders and individuals and there was no common area. So who legally can assess and collect if the HOA 501c4 was never established? The covenants and leasehold ran the same day, so the HOA was completely bypassed. I asked them to tell me who to make the check to. Their leasehold contracts state they are responsible to defend their own property. There is no HOA. I gave them a list of 50 items that detailed the fact they faked the HOA. Plus the hidden landlords are vicious people, that was a red flag to me. No one accuses Board Members,I was President then, of felonies over repairing a fence. Their retaliation exposed the bigger problem. The story is 4 years long.




So are you saying you have not paid your dues/assessments?
NigelB
(Texas)

Posts:186


03/30/2017 1:12 PM  
Posted By SueC4 on 03/30/2017 11:31 AM
The Fact I gave them documents that stated all the amenities were sold in a leasehold agreement to builders and individuals and there was no common area. So who legally can assess and collect if the HOA 501c4 was never established? The covenants and leasehold ran the same day, so the HOA was completely bypassed. I asked them to tell me who to make the check to. Their leasehold contracts state they are responsible to defend their own property. There is no HOA. I gave them a list of 50 items that detailed the fact they faked the HOA. Plus the hidden landlords are vicious people, that was a red flag to me. No one accuses Board Members,I was President then, of felonies over repairing a fence. Their retaliation exposed the bigger problem. The story is 4 years long.



There's no requirement that HOA's in Texas have 501(c)(4) IRS exemptions, all they have to do is to be incorporated as a domestic non profit. Once the HOA is formed, the ByLaws and CC&R's will attach to the deed of the property and will specify what the annual assessment is. You can get a copy of the articles of incorporation from the Texas Scty of State Corporations Section.

I guess I'm a little confused as you seem to be indicating that you were the President of the HOA, but now you're saying its not a real HOA.
NigelB
(Texas)

Posts:186


03/30/2017 1:16 PM  
Posted By SueC4 on 03/29/2017 1:47 PM
Got a bill for $1400.00 from the associations attorney to put a lien on my property. I think I will complain to the attorney general about that legal fee.




I'm assuming that you got the bill because you haven't been paying your assessments. $1400 is a very inflated amount to file a lien, it should only be under $100. Or is the $1400 the amount in arrears plus interest, legal and admin fees.
SueC4
(Texas)

Posts:32


03/31/2017 4:28 PM  
I emailed the attorney for a breakdown because of the large bill. He has not responded. Looks like just another form of harassment. $1,0086.00 is charged without reason on the invoice. And they charged me late fees. Thay have to sue to recoup the fees right? The HOA never paid the bill.
NigelB
(Texas)

Posts:186


03/31/2017 4:57 PM  
Posted By SueC4 on 03/31/2017 4:28 PM
I emailed the attorney for a breakdown because of the large bill. He has not responded. Looks like just another form of harassment. $1,0086.00 is charged without reason on the invoice. And they charged me late fees. Thay have to sue to recoup the fees right? The HOA never paid the bill.




The HOA does not have to sue, it can place a lien on your property for the unpaid balance of your account. The HOA is probably entitled to charge assessments to your account, interest, administrative fees, and legal fees. Anything associated with the attempted collection of the assessment.

The HOA can then seek to foreclose on your property to recoup what they claim they are owed. So yes that would be a lawsuit, but they are going against the property
JohnC46
(South Carolina)

Posts:6553


03/31/2017 5:13 PM  
Posted By SueC4 on 03/31/2017 4:28 PM
I emailed the attorney for a breakdown because of the large bill. He has not responded. Looks like just another form of harassment. $1,0086.00 is charged without reason on the invoice. And they charged me late fees. Thay have to sue to recoup the fees right? The HOA never paid the bill.




Sue
You have been asked and asked if you stopped paying yourt dues or assessmets?

Regardless of you reasoning, have you refused to pay such?
JanetB2
(Colorado)

Posts:2849


04/01/2017 12:25 AM  
Posted By SueC4 on 03/29/2017 1:47 PM
Got a bill for $1400.00 from the associations attorney to put a lien on my property. I think I will complain to the attorney general about that legal fee.


LOL ... That would be my first option. Don't forget you have both District AND State. I would file with BOTH!
SueC4
(Texas)

Posts:32


04/01/2017 9:50 AM  
That's right. I refused to pay the legal bill. I paid the Assessment and Interest under Protest and Duress citing a memo detailing 25 reasons why they are not a HOA and all the times they never hired a lawyer to file a lien. And all the times the directors waived their own assessment and dropped the corporate charter at the same time. I left the payee on the check blank because I have no idea who my landlord is.
SueC4
(Texas)

Posts:32


04/06/2017 1:06 PM  
The HOA has not cashed my check yet. Looks like this is all going to the Attorney General.
NigelB
(Texas)

Posts:186


04/07/2017 1:15 PM  
Posted By SueC4 on 04/06/2017 1:06 PM
The HOA has not cashed my check yet. Looks like this is all going to the Attorney General.



Apparently the HOA did not cash your check because you made it payable to no-one. Giving them a check with no pay to line filled in is exactly the same as not paying.

Might I respectfully suggest that you ask them who they want the check made payable to - or check any documents you have received from the HOA or their attorneys. Generally, when an HOA turns over an account to its attorney for collection, the payments should be made to the attorney which will then remit the amount to the HOA.

You can very easily settle the matter by contacting whoever you sent the check to in writing either via email or us mail, and tell them to fill in the appropriate payee on the check
JohnC46
(South Carolina)

Posts:6553


04/07/2017 2:28 PM  
The bottom line is Sue is withholding her dues/assessments. No name on the check is BS. I would come down on her in a NY minute.

I am not saying Sue is right nor wrong, but withholding payment is not the way to go. I say come down on her.
JanetB2
(Colorado)

Posts:2849


04/07/2017 11:01 PM  
Posted By NigelB on 04/07/2017 1:15 PM

Giving them a check with no pay to line filled in is exactly the same as not paying.


Hmmm ... I have done that and call BS. The payee can simply write their name and cash the check, which is perfectly legal.

http://thelawdictionary.org/blank-check/

What is BLANK CHECK?
A check with no amount or name of payee. The holder can fill it out as they wish.


NigelB
(Texas)

Posts:186


04/08/2017 8:53 AM  
Posted By JanetB2 on 04/07/2017 11:01 PM
Posted By NigelB on 04/07/2017 1:15 PM

Giving them a check with no pay to line filled in is exactly the same as not paying.


Hmmm ... I have done that and call BS. The payee can simply write their name and cash the check, which is perfectly legal.

http://thelawdictionary.org/blank-check/

What is BLANK CHECK?
A check with no amount or name of payee. The holder can fill it out as they wish.





The best place to determine the validity of a check that is issued with no payee is the state in which the check is written. In this case, the State of Texas (where the poster indicates that they reside). A check is a negotiable instrument and in the State of Texas such negotiable instruments are defined and covered under the Texas Business and Commerce Code

Under that code a check with no payee is not considered a negotiable instrument unless the issuer clearly indicates that they give the recipient the authority to complete the check by completing the payee section.


The poster has not indicated that they did any such thing, and considering the fact that the poster questions whether or not the HOA is a legal entity and has previously withheld assessments it seems to me that the poster was probably playing games.

Anyone who has had any dealings with HOA's or their attorneys knows full well that in billing for assessments and collection of delinquent assessments, clear instructions are given in the correspondence as to who or what entity the check should be made payable to. In this case I'd be willing to bet that the attorney representing the HOA told the poster to make the check payable to the attorney.

The Texas Residential Property Owners Protection Act has very specific steps that an association must take before any legal action to enforce the collection of delinquent assessments, these include notice to the delinquent party with specific information as to how the delinquency may be cured, the offering of a payment plan to cure the delinquency. Furthermore HOA's in Texas are required to have a published collection policy.

Considering that the poster previously stated she was at one time President of the HOA (" No one accuses Board Members,I was President then"), I would have expected her to know that.
JohnC46
(South Carolina)

Posts:6553


04/08/2017 5:38 PM  
People

The mechanics of the check (cashable, etc.) is not the issue. She is not "properly" paying her dues. Let us not let her off the hook.
JanetB2
(Colorado)

Posts:2849


04/08/2017 10:12 PM  
Posted By NigelB on 04/08/2017 8:53 AM
The best place to determine the validity of a check that is issued with no payee is the state in which the check is written. In this case, the State of Texas (where the poster indicates that they reside). A check is a negotiable instrument and in the State of Texas such negotiable instruments are defined and covered under the Texas Business and Commerce Code

Under that code a check with no payee is not considered a negotiable instrument unless the issuer clearly indicates that they give the recipient the authority to complete the check by completing the payee section.


Are you discussing this code:

§ 3.109. PAYABLE TO BEARER OR TO ORDER. (a) A promise or order is payable to bearer if it:
(1) states that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment;
(2) does not state a payee; or
(3) states that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.
(b) A promise or order that is not payable to bearer is payable to order if it is payable (i) to the order of an identified person, or (ii) to an identified person or order. A promise or order that is payable to order is payable to the identified person.
(c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to Section 3.205(a). An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to Section 3.205(b).


Generally the person with the check in his or her possession becomes the "bearer" and can negotiate the check. I think something similar can be found under the Uniform Code which most states follow to alleviate banking confusion.

Therefore, the OP did pay the dues owed.
JanetB2
(Colorado)

Posts:2849


04/08/2017 10:21 PM  
Another example would be a company I worked for giving me a check made out to "Petty Cash". I could take that check to the bank and after endorsing the back would be able to cash the check even if not made out to me personally because I am the "bearer" of that instrument.
JanetB2
(Colorado)

Posts:2849


04/08/2017 11:54 PM  
Posted By JohnC46 on 04/08/2017 5:38 PM
People

The mechanics of the check (cashable, etc.) is not the issue. She is not "properly" paying her dues. Let us not let her off the hook.


OP Stated:

"That's right. I refused to pay the legal bill. I paid the Assessment and Interest under Protest and Duress citing a memo detailing 25 reasons why they are not a HOA and all the times they never hired a lawyer to file a lien. And all the times the directors waived their own assessment and dropped the corporate charter at the same time. I left the payee on the check blank because I have no idea who my landlord is."

NigelB
(Texas)

Posts:186


04/09/2017 8:35 AM  
Posted By JanetB2 on 04/08/2017 10:12 PM
Posted By NigelB on 04/08/2017 8:53 AM
The best place to determine the validity of a check that is issued with no payee is the state in which the check is written. In this case, the State of Texas (where the poster indicates that they reside). A check is a negotiable instrument and in the State of Texas such negotiable instruments are defined and covered under the Texas Business and Commerce Code

Under that code a check with no payee is not considered a negotiable instrument unless the issuer clearly indicates that they give the recipient the authority to complete the check by completing the payee section.


Are you discussing this code:

§ 3.109. PAYABLE TO BEARER OR TO ORDER. (a) A promise or order is payable to bearer if it:
(1) states that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment;
(2) does not state a payee; or
(3) states that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.
(b) A promise or order that is not payable to bearer is payable to order if it is payable (i) to the order of an identified person, or (ii) to an identified person or order. A promise or order that is payable to order is payable to the identified person.
(c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to Section 3.205(a). An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to Section 3.205(b).


Generally the person with the check in his or her possession becomes the "bearer" and can negotiate the check. I think something similar can be found under the Uniform Code which most states follow to alleviate banking confusion.

Therefore, the OP did pay the dues owed.




Rather than argue over the interpretation of whether or not a check with no payee listed is payment for a debt, it might be more appropriate to look at the OP's reasoning behind failing to make the check payable to anyone.

1. The OP has previously stated that she was formerly the President of the association.
2. It is reasonable to assume that as President, the OP would have complete knowledge or should have complete knowledge of the appropriate method used to provide notice of assessments, the collection policy as mandated by Texas law, the procedures used by the associations attorney to collect delinquent assessments, and the commonly accepted method utilized to pay those assessments.
3. As I previously stated the State of Texas has very strict rules about what an HOA may do to collect unpaid and overdue assessments, and must go through a number of steps, including offering the delinquent homeowner the opportunity to enter into a payment plan prior to any legal action to collect the debt.
4. Assessment letters and letters from the association and the associations attorney contain specific information as to exactly how the debt can be settled, this would include such terms as to which entity any check should be made payable to.

Regardless of whether or not you believe that the OP paid what was due through the issuance of a check with (1) no payee listed, and (2) no indication that the OP gave permission to the recipient of the check to amend it - the fact remains that the former President of the association has apparently failed to pay assessments, has accumulated fees and interest as a result of that non payment, has had a lien placed on the home, and is refusing to acknowledge the legal status of an association she was formerly President of.

I suspect that there is more to this story than the OP has revealed
JohnC46
(South Carolina)

Posts:6553


04/09/2017 8:49 AM  
Posted By NigelB on 04/09/2017 8:35 AM
Posted By JanetB2 on 04/08/2017 10:12 PM
Posted By NigelB on 04/08/2017 8:53 AM
The best place to determine the validity of a check that is issued with no payee is the state in which the check is written. In this case, the State of Texas (where the poster indicates that they reside). A check is a negotiable instrument and in the State of Texas such negotiable instruments are defined and covered under the Texas Business and Commerce Code

Under that code a check with no payee is not considered a negotiable instrument unless the issuer clearly indicates that they give the recipient the authority to complete the check by completing the payee section.


Are you discussing this code:

§ 3.109. PAYABLE TO BEARER OR TO ORDER. (a) A promise or order is payable to bearer if it:
(1) states that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment;
(2) does not state a payee; or
(3) states that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.
(b) A promise or order that is not payable to bearer is payable to order if it is payable (i) to the order of an identified person, or (ii) to an identified person or order. A promise or order that is payable to order is payable to the identified person.
(c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to Section 3.205(a). An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to Section 3.205(b).


Generally the person with the check in his or her possession becomes the "bearer" and can negotiate the check. I think something similar can be found under the Uniform Code which most states follow to alleviate banking confusion.

Therefore, the OP did pay the dues owed.




Rather than argue over the interpretation of whether or not a check with no payee listed is payment for a debt, it might be more appropriate to look at the OP's reasoning behind failing to make the check payable to anyone.

1. The OP has previously stated that she was formerly the President of the association.
2. It is reasonable to assume that as President, the OP would have complete knowledge or should have complete knowledge of the appropriate method used to provide notice of assessments, the collection policy as mandated by Texas law, the procedures used by the associations attorney to collect delinquent assessments, and the commonly accepted method utilized to pay those assessments.
3. As I previously stated the State of Texas has very strict rules about what an HOA may do to collect unpaid and overdue assessments, and must go through a number of steps, including offering the delinquent homeowner the opportunity to enter into a payment plan prior to any legal action to collect the debt.
4. Assessment letters and letters from the association and the associations attorney contain specific information as to exactly how the debt can be settled, this would include such terms as to which entity any check should be made payable to.

Regardless of whether or not you believe that the OP paid what was due through the issuance of a check with (1) no payee listed, and (2) no indication that the OP gave permission to the recipient of the check to amend it - the fact remains that the former President of the association has apparently failed to pay assessments, has accumulated fees and interest as a result of that non payment, has had a lien placed on the home, and is refusing to acknowledge the legal status of an association she was formerly President of.

I suspect that there is more to this story than the OP has revealed




Well said and I agree there more to this story.
SueC4
(Texas)

Posts:32


04/10/2017 8:47 AM  
Thank you for your comments. As always, there is more to the story. The developer sold off all the assets of the HOA when the covenants were filed on the same day. He made leasehold agreements with builders who, after 25 years still hold the Vendor Liens and along with other individuals giving them proceeds of all insurance claims and condemnation proceeds if ever the retention pond was taken over by the City. The board tried twice to get the city to take it. The City declined. We are not a 501c4 HOA. More of a IRC 528. They can reorganize and prevent the illusion that everyone has an equal share in the neighborhood. They are using the 501c4 for free property tax on land the landlords own.
If all that information was disclosed when we purchased our land, that is one thing. It was never disclosed, the board continued to avoid all repairs (to the point of 3 inspectors stating we would lose our HOA insurance if we didn't repair the fence, their response? they dropped the corporate charter again) they never adopted retention pond policy because that land is being held for re-development,never followed the 2012 updates, let residents purchase land that was in back of their homes with no street access, without replating the section, and closed the cash purchase in the attorneys office that sold the land they held to the 17 residents BEFORE IT WAS LEGAL BY THE STATE OF TEXAS IN 9/2013. I called them out on the illegal activity, they don't care. I told them to research the Patriot Act about giving money to an illegal corporation and RICO for using the mail system.

They dropped the Corporate Charter but never stopped assessing and collecting money for 5 years. I was the next President and caught the problem and reinstated the HOA. They dropped it again when a vote was up to repair the fences. The HOA has no savings. no reserves, no assets on the books.
The board and 75% of the neighborhood are "un-sueable". They have owner financing, wrap notes, equity loans on vendor lien property, they walk out because they have no assets. This is why they can do anything they want. They do not pay. I own my house, no liens or loans. I lose.
On the matter of the check, I stated in the letter to tell me who my landlord is so I can make the check out to them or fill in the check if they thought the HOA was legit. As I stated in the memo of 6 pages I sent them. If I sued they would take everything I own and I would be fighting builders and the developer if I hadn't gone to the Court House myself and researched the title issues. So who is playing games? These title OWNERS are never seen at the board meetings, only the equity title holders, the builders never walk in and say, "Hey I'm the owner and I disagree with the board.

The HOA spent 14 years trying to get signage in the neighborhood, we are a no name neighborhood. You know why it was never accomplished? The landscaper, that owns a portion of the land lease and mows his own grass we pay for, suddenly would have a huge sprinkler repair to do, so there was no money ...ever for a sign. After 25 years, no signage. Of course, you wouldn't want to claim the name of the neighborhood if it was sold to 10 different entities.

I gave them the check under protest and duress. I can not change them and I am not trying to get out of anything. The are abusive. If I am wrong then there would be no need for the extreme retaliation towards me. I also discovered the bank had filed fraudulent UCC filings and pledged my assets, including my house and business assets to someone else. That's when I came back strong demanding whether or not I own my land or house. The bank said it was an oversight that lasted 9 years rolling 3 loans that apparently got thru Loan committee and Credit with no problem. My loans at the bank were participated out to another bank under a different regulatory authority. OH and yes, I am dealing with the same people here. They live in the neighborhood. They equity strip every assets they have so my assets shored up their loans. There's a lot going on here, but I am fighting the whole town if I report it to the regulatory authorities.

They need to cash the check and every year until they re-organize, I will make the payments under duress.
BuckH
(Maryland)

Posts:19


04/10/2017 7:20 PM  
SueC4,

If no land transferred, no HOA assessment can be collected to maintain land. You got that right. Ignore the bullies here, the problem is very few lawyers understand this very basic principle of property law. If they are aware of the creation of covenants and assessments, they think that no lawyer would ever make this very basic mistake. However, while it might be rare, it does happen. An attorney will deep knowledge of property law can help you untangle this mess. A decent judge with a good law clerk can sort through this. You might want to contact a law school and ask to speak with the property law professor. See if that person can recommend property lawyers with an interest in the basics of property law and researching complex legal issues.

It sound like the two lawyers you talked to were clueless. It might take some digging to find one that is well versed in property law with an interest in researching very basic property law concepts. There is nothing wrong with going to court and doing your own research, that can save you legal fees in the long run if you have the research to present to an attorney. The cases on this situation are few and far between because it is such a basic, fundamental part of creating covenants. There must be land transferred!

NigelB
(Texas)

Posts:186


04/11/2017 7:37 AM  
Posted By BuckH on 04/10/2017 7:20 PM
SueC4,

If no land transferred, no HOA assessment can be collected to maintain land. You got that right. Ignore the bullies here, the problem is very few lawyers understand this very basic principle of property law. If they are aware of the creation of covenants and assessments, they think that no lawyer would ever make this very basic mistake. However, while it might be rare, it does happen. An attorney will deep knowledge of property law can help you untangle this mess. A decent judge with a good law clerk can sort through this. You might want to contact a law school and ask to speak with the property law professor. See if that person can recommend property lawyers with an interest in the basics of property law and researching complex legal issues.

It sound like the two lawyers you talked to were clueless. It might take some digging to find one that is well versed in property law with an interest in researching very basic property law concepts. There is nothing wrong with going to court and doing your own research, that can save you legal fees in the long run if you have the research to present to an attorney. The cases on this situation are few and far between because it is such a basic, fundamental part of creating covenants. There must be land transferred!





I guess I'm one of those bullies you're referring to - but actually I'm trying to determine what exactly is going on and provide information concerning the Texas statutes that govern HOA's.

The OP speaks about the developer selling off all of the assets, but then goes on to speak about the retention ponds that the HOA board attempted to get the City to take over, the OP speaks about the fence and the necessity to repair it, and goes on to tell us that she was formerly the President of the HOA. Once would expect that if she is no longer President she either resigned or was not re-elected to the position. She then continues with references to the Patriot act and RICO. Both of which are federal statutes and have nothing whatsoever to do with Texas Home Owners Associations. The OP alleges that the developer is using section 501(c)(4) of the IRS code to avoid paying property taxes - but all Texas law does for 501(c)(4) organizations is to exempt them from Franchise and Sales Taxes (but the organization must apply for that exemption). Generally speaking, HOA's in Texas do not qualify for the exemption from property taxes.

Our HOA owns 3 tracts of land and we are assessed and pay nominal property taxes to the county on that land.

Lacking any specific information about the developer or the HOA being discussed here it is practically impossible to offer an opinion on precisely what recourse the OP has to settle her complaints. However, as I have stated previously, the Texas legislature has enacted some pretty strong Homeowner protections for those who are in HOA's. These protections include the right to inspect the financial records of the HOA and to be fully apprised of where the money goes.

In this case, the OP is alleging that the HOA is invalid but is collecting assessments. She has an absolute right under the Texas Residential Property Owners Protection Act to review the associations accounts and to request documents. The governing documents of the association will specify what the assessments may be used for. The county in which the HOA is located can provide information (usually on line) as to what assets the developer or the HOA own.
JanetB2
(Colorado)

Posts:2849


04/11/2017 10:32 PM  
Posted By NigelB on 04/11/2017 7:37 AM
Posted By BuckH on 04/10/2017 7:20 PM
SueC4,

If no land transferred, no HOA assessment can be collected to maintain land. You got that right. Ignore the bullies here, the problem is very few lawyers understand this very basic principle of property law. If they are aware of the creation of covenants and assessments, they think that no lawyer would ever make this very basic mistake. However, while it might be rare, it does happen. An attorney will deep knowledge of property law can help you untangle this mess. A decent judge with a good law clerk can sort through this. You might want to contact a law school and ask to speak with the property law professor. See if that person can recommend property lawyers with an interest in the basics of property law and researching complex legal issues.

It sound like the two lawyers you talked to were clueless. It might take some digging to find one that is well versed in property law with an interest in researching very basic property law concepts. There is nothing wrong with going to court and doing your own research, that can save you legal fees in the long run if you have the research to present to an attorney. The cases on this situation are few and far between because it is such a basic, fundamental part of creating covenants. There must be land transferred!





I guess I'm one of those bullies you're referring to - but actually I'm trying to determine what exactly is going on and provide information concerning the Texas statutes that govern HOA's.

The OP speaks about the developer selling off all of the assets, but then goes on to speak about the retention ponds that the HOA board attempted to get the City to take over, the OP speaks about the fence and the necessity to repair it, and goes on to tell us that she was formerly the President of the HOA. Once would expect that if she is no longer President she either resigned or was not re-elected to the position. She then continues with references to the Patriot act and RICO. Both of which are federal statutes and have nothing whatsoever to do with Texas Home Owners Associations. The OP alleges that the developer is using section 501(c)(4) of the IRS code to avoid paying property taxes - but all Texas law does for 501(c)(4) organizations is to exempt them from Franchise and Sales Taxes (but the organization must apply for that exemption). Generally speaking, HOA's in Texas do not qualify for the exemption from property taxes.

Our HOA owns 3 tracts of land and we are assessed and pay nominal property taxes to the county on that land.

Lacking any specific information about the developer or the HOA being discussed here it is practically impossible to offer an opinion on precisely what recourse the OP has to settle her complaints. However, as I have stated previously, the Texas legislature has enacted some pretty strong Homeowner protections for those who are in HOA's. These protections include the right to inspect the financial records of the HOA and to be fully apprised of where the money goes.

In this case, the OP is alleging that the HOA is invalid but is collecting assessments. She has an absolute right under the Texas Residential Property Owners Protection Act to review the associations accounts and to request documents. The governing documents of the association will specify what the assessments may be used for. The county in which the HOA is located can provide information (usually on line) as to what assets the developer or the HOA own.


The above bold statement can have something to do with HOA's if still under developer control. For example in my state if a developer engages in "Theft of Contract" (changing contract without proper reserved option to change), which in turn could also violate "Real Estate Fraud" (defrauding buyers and secured creditors), and if have engaged in that similar activity in more than one instance can violate "Criminal Racketeering" (in essence RICO).

Similar to the OP in my last HOA the Developer did not initially properly transfer "Common Area Property" to the HOA. Potentially in order to charge HOA fees to maintain any property ... the property MUST be owned by the ASSOCIATION. It appears to me that is the OP's issue.

If I had known in beginning what I know now ... Instead of suing my past developers (initial developer and new developer) I and all my neighbors would have filed official complaints with BOTH our local Attorney General AND our State Attorney General for "Theft of Contract", "Real Estate Fraud", and because engaged in similar activity in more than one subdivision in more than one area would have added "Criminal Racketeering" (a.k.a. RICO).

It appears the OP has a huge issue above and beyond what I experienced and which is why I stated above that I would first file and discuss with BOTH the local Attorney General AND the State Attorney General. This is deep and would at least have the issue as a filed record with those entities.


DarleneD1
(California)

Posts:3


04/12/2017 2:08 AM  
I'm having a similar issue in California. Original developers defaulted on bank loan, so bank foreclosed and auctioned off subdivision, prior to completion, without considering, or even informing purchaser of CC&R, who in turn, never formed or started an HOA. Each pool area, is 1/14 owned as common interest by each homeowner, who's property adjoins a common area. As people started purchasing homes, they all just agreed on a property owner collect fees to maintain the pool. Some 10 years ago,someone thought it a good idea to have their real estate friend draw up HOA legal forms and started using the name to place liens on homes, then sell to a community homeowner for dirt cheap. All this under the fraudulent title of president and secretary of Country Club Village pool1 area a HOA. This apeared to be coercion and fraud, as well as theft, to me. Then they placed 3 illegal liens, illegally, so I took the lady who placed the liens to court, but my attorney was incompetent and charged me $12000 for nothing. No liens removed, no assessments removed, no damages awarded, no attorney or legal fees reimbursed. He claimed to settle in mediation, without my consent, then I found out he settled out of court. I refused to sign the settlement agreement, so he tricked me into signing it, (disguising it as another document). He also filed the quiet title He then closed the case in complete and full prejudice, again without my consent. Then he filed in small claims on me, claiming I owe him $6000+. under Auto Tort, as well as mixing another unrelated case in with the summons.
Now, the lady who placed the liens, sold her house and bailed, leaving everything with her friend, the one who started the fake HOA, who in turn, fraudulently signed into contract with Desert Resort Management, Associa, claiming to be authorized by the Board of Directors, (that doesn't exist)to sign into contract on their behalf, after voting to have Associa manage our pool area. Which consists of, literally, the pool, pump and filter. When I went to Associa, informing them of the fraud, they ignored me, claiming they didn't need homeowners consent or vote, for the board voted on our behalf and set up an election meeting to vote in Board Members. If they were elected by our Board, then why do they need to elect a Board? Hmmm.
Of course they lied and sugar coated the whole HOA benefits speel and how having a management company is a must, because Managing an HOA is way too complicated, so nobody listened to what I had to say, so I never went to the second meeting, but apparently 2 members were voted in, but neither live in the neighbourhood, they just own rentals. Now Associa has raised the fee from $500 to $625, with assessments of $150 for photo copies and envelops and $200 for attorney fees, etc., etc..
I've refused to pay, as well as, sign anything they've tried to get me to sign. Now they are threatening to add more liens on my property.
I need a new roof, but can't get a loan because of, one, the liens against the property from the first lady and two, I got behind on the taxes, paying the lousy attorney, who I'm currently in a lawsuit against. I don't know where else I can turn. I'm in the process of getting a complaint off to the State Bar, but the court date is in 7 days and I can't afford anymore lawyers fees. I also can't get local law enforcement or the DA to file criminal charges for , fraud, coercion, tax fraud, illegal dept collection practices. The Attorney General won't do anything either. In fact, the Attorney General said all they can do with an HOA not complying within the law, is send them a warning letter, but it's up to them whether to listen or not.
If I were to commit fraud, I'd be in Jail so fast, my head would spin, but because they claim to be an HOA, they're exempt from the law. What is wrong with the minds of these politicians and law enforcement agencies, that treat HOA's like they and their policies supercede all government agencies and laws, when they are nothing more than a swarm of childish thievin, bullies that were never taught how to play well with others, or that there are consequences to their actions. Everybody acts like they're scared of their acting out and causing a scene. Who's being childish now? Are the people who are supposed to protect us from being victimized by con artists, with all the laws, bylaws, rules and regulations can't come up with a way of policing and stopping these corrupt, heartless, overzealous, bullies from hurting your neighbours, by the tens of thousands, from one end of the country to the other? REALLY???
GenoS
(Florida)

Posts:1169


04/12/2017 2:23 AM  
Paragraphs please, Darlene. Welcome to the forum but I guarantee there are some people who won't bother to read all that. Yes, the forum software here could be better and allow editing of posts, but we're stuck with it. If you break that up into manageable chunks I think you'll get a better response rate
BobD4
(up north)

Posts:904


04/12/2017 8:10 AM  
The Topic menu shows that 44 replies have so far followed the OP's original question. Some of those have been pretty good comments, particularly including from her home state.

1- Respectfully the OP has declined to answer a number of questions among those that would have helped commenters.

Whether or not she is actually reading those questions, she has also 'put a lot of stuff out there' that appears to offer big obstacles to anyone trying to help her.

Whatever anyone thinks of lawyers or paralegals, if they cannot get enough organization into what a potential client is presenting how can they possibly help ? If they cannot focus a client onto relevant / related scenarios, then respectfully those professionals would NOT be doing that potential client any favour to take on their cliency.

2 - Developer / declarants etc can try a lot of shenanigans, and their insolvency/bankruptcy etc can worse be followed by lots of sociopathic stuff like project windups that leave purchasers further up the creek.

3 - That said, where there is to be no built environment nor clear need for a passive common area to be legally transferred to some formal body, a bare tenancy in common for end-user stakeholders - with shared but undivided ownership - isn't the end of the earth.

Such may be an outcome without lawful governancing decisions short of judicial partition, but it can be valid.

Trying to collect contributions from enriched end-users may depend on what the jurisdiction does with Unjust Enrichment tools a.k.a. a form of 'equitable remedy'.

But it respectfully ain't necessarily the end of the world.

( I live in one such with a giant premium waterfront. It was created Day 1 as a tenancy in common T.I.C. with undivided co-ownership crazy glued onto each end user private stakeholder property. There are minimal covenants and zero 'vires' for any association to legally own nor formally govern. The voluntary association gets an almost 100 % contribution financially and is usually benign. It's not the end of the world .)
NigelB
(Texas)

Posts:186


04/12/2017 8:27 AM  
Posted By DarleneD1 on 04/12/2017 2:08 AM
I'm having a similar issue in California. Original developers defaulted on bank loan, so bank foreclosed and auctioned off subdivision, prior to completion, without considering, or even informing purchaser of CC&R, who in turn, never formed or started an HOA. Each pool area, is 1/14 owned as common interest by each homeowner, who's property adjoins a common area. As people started purchasing homes, they all just agreed on a property owner collect fees to maintain the pool. Some 10 years ago,someone thought it a good idea to have their real estate friend draw up HOA legal forms and started using the name to place liens on homes, then sell to a community homeowner for dirt cheap. All this under the fraudulent title of president and secretary of Country Club Village pool1 area a HOA. This apeared to be coercion and fraud, as well as theft, to me. Then they placed 3 illegal liens, illegally, so I took the lady who placed the liens to court, but my attorney was incompetent and charged me $12000 for nothing. No liens removed, no assessments removed, no damages awarded, no attorney or legal fees reimbursed. He claimed to settle in mediation, without my consent, then I found out he settled out of court. I refused to sign the settlement agreement, so he tricked me into signing it, (disguising it as another document). He also filed the quiet title He then closed the case in complete and full prejudice, again without my consent. Then he filed in small claims on me, claiming I owe him $6000+. under Auto Tort, as well as mixing another unrelated case in with the summons.




As I understand it, the developer never formed an HOA but did provide common property that includes a community pool. Subsequently some of the homeowners got together and formed an HOA (I'm assuming in full compliance with California laws and had the necessary majority to do so). I'm not sure what you mean about "liens" if you are speaking of the CC&R's which the association would have filed with the property records - those are not liens they are basically deed restrictions.

I understand that you opposed the formation of the HOA and apparently must have refused to pay any assessments that the HOA levied against your property, and that as a result of that you contested the assessments and any liens the HOA placed on your property for non-payment. That cost you legal fees charged to your by your attorney - which you now refuse to pay.



Posted By DarleneD1 on 04/12/2017 2:08 AM
Now, the lady who placed the liens, sold her house and bailed, leaving everything with her friend, the one who started the fake HOA, who in turn, fraudulently signed into contract with Desert Resort Management, Associa, claiming to be authorized by the Board of Directors, (that doesn't exist)to sign into contract on their behalf, after voting to have Associa manage our pool area. Which consists of, literally, the pool, pump and filter. When I went to Associa, informing them of the fraud, they ignored me, claiming they didn't need homeowners consent or vote, for the board voted on our behalf and set up an election meeting to vote in Board Members. If they were elected by our Board, then why do they need to elect a Board? Hmmm.




I'm familiar with the management company that you are speaking of, and can assert that they are national in scope, I really doubt that they would enter into a contract to manage an HOA that was not in fact a bonafide organization. Your governing documents will specify the terms of office and the criteria for elections of your Directors. It is true that the board of the HOA has the right (under the CC&R's) to impose assessments, hire a management company, and determine how those assessments are spent for the good of the community.


Of course they lied and sugar coated the whole HOA benefits speel and how having a management company is a must, because Managing an HOA is way too complicated, so nobody listened to what I had to say, so I never went to the second meeting, but apparently 2 members were voted in, but neither live in the neighbourhood, they just own rentals. Now Associa has raised the fee from $500 to $625, with assessments of $150 for photo copies and envelops and $200 for attorney fees, etc., etc..
I've refused to pay, as well as, sign anything they've tried to get me to sign. Now they are threatening to add more liens on my property.
I need a new roof, but can't get a loan because of, one, the liens against the property from the first lady and two, I got behind on the taxes, paying the lousy attorney, who I'm currently in a lawsuit against. I don't know where else I can turn. I'm in the process of getting a complaint off to the State Bar, but the court date is in 7 days and I can't afford anymore lawyers fees. I also can't get local law enforcement or the DA to file criminal charges for , fraud, coercion, tax fraud, illegal dept collection practices. The Attorney General won't do anything either. In fact, the Attorney General said all they can do with an HOA not complying within the law, is send them a warning letter, but it's up to them whether to listen or not.




Depending on the size of the HOA, a management company can in fact be a benefit. Running an HOA can be a full time job and though elected to the positions, the Directors are volunteers who probably have full time employment. Using a contracted management company to collect assessments, pay bills etc can relieve the board of a lot of that trouble.

The management company cannot raise assessments unilaterally, assessments are set by your board of directors, the management company can of course charge the association for administrative expenses such as copies, and any fees paid by the HOA to an attorney in collection efforts can be levied against the account of the individual against whom the association is trying to collect. Local law enforcement generally will not become involved in civil matters and it looks like all of your problems are civil (lawsuit against HOA or officers/refusal or inability to pay your attorney/inability to pay property taxes)


If I were to commit fraud, I'd be in Jail so fast, my head would spin, but because they claim to be an HOA, they're exempt from the law. What is wrong with the minds of these politicians and law enforcement agencies, that treat HOA's like they and their policies supercede all government agencies and laws, when they are nothing more than a swarm of childish thievin, bullies that were never taught how to play well with others, or that there are consequences to their actions. Everybody acts like they're scared of their acting out and causing a scene. Who's being childish now? Are the people who are supposed to protect us from being victimized by con artists, with all the laws, bylaws, rules and regulations can't come up with a way of policing and stopping these corrupt, heartless, overzealous, bullies from hurting your neighbours, by the tens of thousands, from one end of the country to the other? REALLY???




I suspect that all of your problems are related to your refusal to pay assessments which are being levied to maintain common property. If you live in a community which is under an HOA there is a reasonable expectation that individuals in that HOA will bear their fair share of the burden in maintaining common areas (in this case the pool and building).

If I'm wrong feel free to point out my errors

NigelB
(Texas)

Posts:186


04/12/2017 8:40 AM  
Posted By JanetB2 on 04/11/2017 10:32 PM
Posted By NigelB on 04/11/2017 7:37 AM
Posted By BuckH on 04/10/2017 7:20 PM
SueC4,

If no land transferred, no HOA assessment can be collected to maintain land. You got that right. Ignore the bullies here, the problem is very few lawyers understand this very basic principle of property law. If they are aware of the creation of covenants and assessments, they think that no lawyer would ever make this very basic mistake. However, while it might be rare, it does happen. An attorney will deep knowledge of property law can help you untangle this mess. A decent judge with a good law clerk can sort through this. You might want to contact a law school and ask to speak with the property law professor. See if that person can recommend property lawyers with an interest in the basics of property law and researching complex legal issues.

It sound like the two lawyers you talked to were clueless. It might take some digging to find one that is well versed in property law with an interest in researching very basic property law concepts. There is nothing wrong with going to court and doing your own research, that can save you legal fees in the long run if you have the research to present to an attorney. The cases on this situation are few and far between because it is such a basic, fundamental part of creating covenants. There must be land transferred!





I guess I'm one of those bullies you're referring to - but actually I'm trying to determine what exactly is going on and provide information concerning the Texas statutes that govern HOA's.

The OP speaks about the developer selling off all of the assets, but then goes on to speak about the retention ponds that the HOA board attempted to get the City to take over, the OP speaks about the fence and the necessity to repair it, and goes on to tell us that she was formerly the President of the HOA. Once would expect that if she is no longer President she either resigned or was not re-elected to the position. She then continues with references to the Patriot act and RICO. Both of which are federal statutes and have nothing whatsoever to do with Texas Home Owners Associations. The OP alleges that the developer is using section 501(c)(4) of the IRS code to avoid paying property taxes - but all Texas law does for 501(c)(4) organizations is to exempt them from Franchise and Sales Taxes (but the organization must apply for that exemption). Generally speaking, HOA's in Texas do not qualify for the exemption from property taxes.

Our HOA owns 3 tracts of land and we are assessed and pay nominal property taxes to the county on that land.

Lacking any specific information about the developer or the HOA being discussed here it is practically impossible to offer an opinion on precisely what recourse the OP has to settle her complaints. However, as I have stated previously, the Texas legislature has enacted some pretty strong Homeowner protections for those who are in HOA's. These protections include the right to inspect the financial records of the HOA and to be fully apprised of where the money goes.

In this case, the OP is alleging that the HOA is invalid but is collecting assessments. She has an absolute right under the Texas Residential Property Owners Protection Act to review the associations accounts and to request documents. The governing documents of the association will specify what the assessments may be used for. The county in which the HOA is located can provide information (usually on line) as to what assets the developer or the HOA own.


The above bold statement can have something to do with HOA's if still under developer control. For example in my state if a developer engages in "Theft of Contract" (changing contract without proper reserved option to change), which in turn could also violate "Real Estate Fraud" (defrauding buyers and secured creditors), and if have engaged in that similar activity in more than one instance can violate "Criminal Racketeering" (in essence RICO).

Similar to the OP in my last HOA the Developer did not initially properly transfer "Common Area Property" to the HOA. Potentially in order to charge HOA fees to maintain any property ... the property MUST be owned by the ASSOCIATION. It appears to me that is the OP's issue.

If I had known in beginning what I know now ... Instead of suing my past developers (initial developer and new developer) I and all my neighbors would have filed official complaints with BOTH our local Attorney General AND our State Attorney General for "Theft of Contract", "Real Estate Fraud", and because engaged in similar activity in more than one subdivision in more than one area would have added "Criminal Racketeering" (a.k.a. RICO).

It appears the OP has a huge issue above and beyond what I experienced and which is why I stated above that I would first file and discuss with BOTH the local Attorney General AND the State Attorney General. This is deep and would at least have the issue as a filed record with those entities.






"Potentially in order to charge HOA fees to maintain any property ... the property MUST be owned by the ASSOCIATION."

I respectfully disagree with that statement.

and I'll offer my HOA as an example.

We own three tracts of land which we maintain. We also maintain a landscape easement on property that we do not own. That property is just outside of our community and it has our entrance monuments and signage on it. We maintain the landscaping around that area.

Also in our community is an amenity lake or detention pond (amenity lake sounds better), the lake and the land surrounding it was transferred to the municipal utility district by the developer, its reason for being is drainage. We have an agreement with the Municipal Utility District to utilize the lake and land around it for recreational purposes. That agreement requires that we maintain the landscaping (cut the grass).

So while we do in fact own property and maintain it using the assessments we levy against our members, we also use those assessments for the benefit of the community by maintaining the landscaping on non HOA owned property. Were we not to do so - the property owners would only have to comply with the City requirement for cutting grass (which depending on the growth rate allow grass to be 1-2 feet high)
BuckH
(Maryland)

Posts:19


04/12/2017 8:53 AM  
You just contradicted yourself. Your HOA DOES own property. That is the basis for your collection of assessment. If your members decide to maintain other property with those dues, that is your choice. Those are voluntary payments to maintain that land.

Mandatory assessments relate to the land your HOA DOES own.
BuckH
(Maryland)

Posts:19


04/12/2017 8:54 AM  
Mistakes are made in the creation of HOAs all the time. The existence of a management company in no way validates the legality of the underlying organization or its creation.
BuckH
(Maryland)

Posts:19


04/12/2017 8:59 AM  
Look for an attorney in another town or call a law school and ask to speak with the property law professor. See if she/he can give you a recommendation to a knowledgeable property law attorney in your state.
NigelB
(Texas)

Posts:186


04/12/2017 10:38 AM  
Posted By BuckH on 04/12/2017 8:53 AM
You just contradicted yourself. Your HOA DOES own property. That is the basis for your collection of assessment. If your members decide to maintain other property with those dues, that is your choice. Those are voluntary payments to maintain that land.

Mandatory assessments relate to the land your HOA DOES own.




And that is one of the problems with attempting to answer a question which may have a totally different answer depending on which of the 50 States the HOA is located in.

I did not contradict myself - I pointed out that the HOA I live in owns property, but in the State of Texas an HOA does not have to own property in order to enact a mandatory assessment.

Section 204 of the Texas Property Code
"Regular assessment" means an assessment, charge, fee, or dues that each owner of property within a subdivision is required to pay to the property owners’ association on a regular
basis and that are to be used by the association for the benefit of the subdivision in accordance with the original, extended, added, or modified restrictions."

Many deed restrictions or the declaration state with specificity what assessments may be used for to include such things as garbage collection, upkeep of easements and common areas. Those payments are not voluntary but are included in the section of the CC&R's relating to the assessment and use of those assessments.

Perhaps other States have a requirement that an HOA own property in order to collect assessment - Not in Texas.
BuckH
(Maryland)

Posts:19


04/12/2017 11:07 AM  
Actually property law is fundamental across the country. You have skipped steps in the creation of CC&Rs and think that just because yours work, others work. Untrue. The people that have questioned their CC&Rs on this thread have valid concerns and legal issues with the creation of their documents. CC&Rs have to be created by specific parties, with specific rights. Both have mentioned defects in their situations. Again, this is an issue for a lawyer with a deep understanding of the creation of these documents. Just because CC&Rs are filed, does not mean they were legally filed or that they are enforceable. Just because someone is sent a "bill" does not mean they owe money. Just because a lien is "threatened" does not mean it will be imposed.
DarleneD1
(California)

Posts:3


04/12/2017 5:14 PM  
If the alleged HOA is non existent, then the people collecting assessments under a fake HOA are committing fraud and anyone knowingly funding a fraudulent business, whether for profit or not for profit, are just as equally guilty as the ones committing the fraud.
I'm going through the same ordeal. Yes they can place liens on the property and threaten to foreclose, as they did to me. When my complaints and concerns went unheard, I filed a civil suit, for a Quiet Title,asking that the liens and all assessments be removed, on the grounds that: There is not, currently, and/or never has been an incorporated nor unincorporated HOA by the name of C****** C*** V****** A*** 1-A,or any variation there of, registered and/or licensed to conduct a not for profit, or any other kind of Common Interest business, or an HOA anywhere in R******** County in the state of California, of the United States of America. Which leaves No persons acting as authoritative figure, for said named, alleged, HOA, C****...1-A or any other business, there of,any rights to the named property, other than the persons or organizations named on the Deed and/ trust DeeD, legally recorded with the County Recorder.
So they were ordered to remove all alleged delinquent assessments and liens against the property, immediate-ly and ordered to not try to ask for any form of assessment, without a legal HOA in place.
Making people pay fees under the threat of taking their home, the thing they work their whole life to own and it's stripped from them for a couple thousand dollars, by an illegal HOA, or any other illegal organization, is fraud, coercion, extortion and theft at the least.
So before everybody starts casting their vote to make someone else the bad guy, why not just let it go. It's not your place or right to be judging anybody on this or any other forum, just because you are in love with the control you get for being a part of an HOA board.
DarleneD1
(California)

Posts:3


04/12/2017 5:20 PM  
Sorry GenoS and to everybody else. It was late and I was in a hurry to get my 2 cents in before I fell asleep.

Paragraphs, duly noted.

I was truly on a rant with a...IDK, I'm going to hand over the shovel, before I dig myself too big a hole that I can't get out of.

I'm off to edit.
Good Day.
GenoS
(Florida)

Posts:1169


04/12/2017 11:17 PM  
It's fine, DarleneD1. No apology necessary
NigelB
(Texas)

Posts:186


04/13/2017 7:32 AM  
Posted By DarleneD1 on 04/12/2017 5:14 PM
If the alleged HOA is non existent, then the people collecting assessments under a fake HOA are committing fraud and anyone knowingly funding a fraudulent business, whether for profit or not for profit, are just as equally guilty as the ones committing the fraud.
I'm going through the same ordeal. Yes they can place liens on the property and threaten to foreclose, as they did to me. When my complaints and concerns went unheard, I filed a civil suit, for a Quiet Title,asking that the liens and all assessments be removed, on the grounds that: There is not, currently, and/or never has been an incorporated nor unincorporated HOA by the name of C****** C*** V****** A*** 1-A,or any variation there of, registered and/or licensed to conduct a not for profit, or any other kind of Common Interest business, or an HOA anywhere in R******** County in the state of California, of the United States of America. Which leaves No persons acting as authoritative figure, for said named, alleged, HOA, C****...1-A or any other business, there of,any rights to the named property, other than the persons or organizations named on the Deed and/ trust DeeD, legally recorded with the County Recorder.
So they were ordered to remove all alleged delinquent assessments and liens against the property, immediate-ly and ordered to not try to ask for any form of assessment, without a legal HOA in place.
Making people pay fees under the threat of taking their home, the thing they work their whole life to own and it's stripped from them for a couple thousand dollars, by an illegal HOA, or any other illegal organization, is fraud, coercion, extortion and theft at the least.
So before everybody starts casting their vote to make someone else the bad guy, why not just let it go. It's not your place or right to be judging anybody on this or any other forum, just because you are in love with the control you get for being a part of an HOA board.




It's really difficult to define exactly what has happened here because two of your postings appear to contradict one another. In your first post you mentioned a law suit against the entity claiming to be the HOA and state that the outcome was "No liens removed". But then this post says that the the result was "they were ordered to remove all alleged delinquent assessments and liens against the property".

As for "being in love with the control" - Not every HOA board operates as the one you seem to be in conflict with. Some (probably most) are made up of residents who volunteer their time to try to improve their communities. It's not about control, it is about ensuring that the community as a whole benefits from the assessments that are levied, and that those assessments are spent wisely and for the common good.

The remedy for a board, or a board member that oversteps its authority, or becomes controlling or authoritarian is to replace it.
SueC4
(Texas)

Posts:32


04/13/2017 10:36 AM  
Thank you again for the comments. No one I know will even comment the issue.

Unfortunately the neighborhood had two Real Estate University Professors living next to the retention ponds and when trouble started, they moved. We have one attorney left who will not speak to anyone.

My statement about the retention ponds needs clarifying. They are tracts and no tracts can be considered common area by the covenants. No amenities exist because they sit on personal lots. ... also not common amenities according to the covenants. The retention pond tract was deeded to the HOA but we have no covenant policy regarding retention ponds and they refuse to add it which was required in 2008 by the State.

The Attorney General appears to be the way to go, even though in the State of Texas, ours is under indictment for securities fraud. The State of Texas has no Auditor either. They haven't hired one in three years. I'm also going to cite the code violations to the City but I live in the County Seat and everyone is related. They will run me out of town. The bankers have already stated they would bleed me dry.

JanetB2
(Colorado)

Posts:2849


04/13/2017 9:48 PM  
DarleneD1 ... You should potentially start a new thread with your issue or questions. You are from a different State and the laws regarding HOA's can vary between the various states. When individuals respond to you on this thread regarding TX issues there are "newbies" who will mistake some answers as possibly applying to them within their state which is the same as the Original Poster on this thread, when it may be for your State. Similar issues can vary between states .
SueC4
(Texas)

Posts:32


04/14/2017 10:17 AM  
ok Thanks.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Developer never transferred land to the HOA.



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement