Get 2 months of free community web site hosting from Community123.com!
Sunday, September 22, 2019
Get 2 months of free community web site hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: HOA charge higher fees to non members?
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
CraigF6
(Georgia)

Posts:9


09/03/2019 8:42 AM  
Covenants expired here (Georgia) and owners are given the option to join the HOA or if you do not join you have to pay a road fee (HOA owns roadway) at a higher rate than those who sign the HOA. The “Road Use Fee” is above and beyond the regular HOA Dues that includes all maintenance and access to common areas.
It seems to be a coercive attempt to force owners to sign the covenants. Can an we do that?
GeorgeS21
(Florida)

Posts:1281


09/03/2019 9:09 AM  
Looking forward to the answers!

Craig - is there a reason a well-funded HOA would not benefit your property values? Would it be a good governance mechanism to pay the bills to keep access open and clear and well maintained?
NpS
(Pennsylvania)

Posts:3655


09/03/2019 10:54 AM  
Coercive? Yes.
Allowed? I see no reason why not, as long as they can charge for use of the roads.
Smart? Absolutely. Get over the noise and have your HOA go on about its business.

Sikubali jukumu. Read all posts at your own risk.
CraigF6
(Georgia)

Posts:9


09/03/2019 11:07 AM  
I’m not arguing for or against, I always encourage communities to use HOA’s, my question is if this is ok. To tell owners they are going to have to pay a higher road use fee if they do not sign the covenants. I wanted to see if there was any precedent and if this would open up the HOA for any challenge in court.
CraigF6
(Georgia)

Posts:9


09/03/2019 11:13 AM  
Might seem like good advise in Pa but here folks don’t like getting coerced into signing anything and will definitely challenge if they think that’s the case.
NpS
(Pennsylvania)

Posts:3655


09/03/2019 11:33 AM  
Posted By CraigF6 on 09/03/2019 11:13 AM
Might seem like good advise in Pa but here folks don’t like getting coerced into signing anything and will definitely challenge if they think that’s the case.



What's the alternative.
It remains optional. Some join. Others don't. That battle goes on and on and on. Some think everyone should join. Others say no. On and on and on.
People will have their nose out of joint for a while this way - but at least you're not going to get stuck with an administrative PITA that never gets resolved.

What's going to be the criteria under some other system. Let's pick an example where the fees are $100 for full service and $80 for roads only. You'll get flak over that because one is too high or the other is too high. Then when it comes time to raise fees at some time in the future, you'll go through the same process once again. Why did you this? Or why did you that? Or more likely - You shouldn't have this? Or you shouldn't have that?

Or maybe you should make it $100 whether you join or not. What benefit does that give you down the road.

Personally, I think the packaging of the message can minimize some of the sting. For example, let them know that if you wind up with a multi-tier system, that will add around $10 per month per household (or something like that) in additional administrative costs. The fewer variations in your fee structure, the leaner you can run your operation (and the lower the cost that gets passed on to homeowners).

There are many ways to say it nicely. But at the end of the day, people can pay the lower amount or the higher amount. Someone will always be griping when there's a difference in fees.


Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3655


09/03/2019 11:49 AM  
Real world example:

In addition to monthly fees, we have a quarterly fee that goes toward the cost of water. Owners earn credits toward the quarterly fees by installing water-saving devices and testing for leaks once per year.

When we first launched the program, lots of noise. Difficult to introduce the idea that not everyone was going to pay the same price. And there were differences of opinion on how the credits should be calculated.

We're past all that now. We still get gripes from the folks who don't agree with the program. But only a few remain.

What matters today is the results. Our cost of water is around 1/3 less than it was 7 years ago. We use millions of gallons less.

We'll never get rid of the nay-sayers. But they're down to around 6%.

It was a good decision - even back then when most of the homeowners didn't agree or didn't understand.

I think you have a good solution. Figure out how to message it and run with it.




Sikubali jukumu. Read all posts at your own risk.
JohnC46
(South Carolina)

Posts:8647


09/03/2019 12:26 PM  
Craig

I doubt you will get anyone to join under the higher roads only. Why would anyone join under this option? I might alo question its legality but another story.

Might make some sense to have road only as a lower than standard dues assuming you could show what the extra difference buys someone.

I say make the dues as low as possible so all people consider joining.
CraigF6
(Georgia)

Posts:9


09/03/2019 12:41 PM  
I’m sure I didn’t explain it right. Our covenants lapsed. They drew up new covenants and need everyone on board, I guess to be official. In order to get folks to sign, they’ve said dues are one price and cover roads, Lake etc... if you do not sign then you will have to pay for the roads only and that price is above the HOA Dues price. So, if you sign the Covenants your price is $400 and if you don’t then it’s $500 and that is only to be able to use the private roads in the subdivision.
CathyA3
(Ohio)

Posts:396


09/03/2019 12:43 PM  
I would also expect a road use fee to include things beyond the cost of routine road maintenance. For example, HOA members pay a portion of their fees into the reserve fund which will cover, among other things, major road work/resurfacing and the like. In short, the "higher fee" may not in fact be higher when you include all of the things that are included in HOA assessments but which are largely invisible to members who don't really dig into the finances (and I strongly suspect that is the vast majority of homeowners).
CraigF6
(Georgia)

Posts:9


09/03/2019 12:56 PM  
In this case they are only using it to coerce owners to sign the covenants (they’ve admitted so). I’m just wondering the legality of coercing home owners like that through making them pay a higher rate.
JohnC46
(South Carolina)

Posts:8647


09/03/2019 1:30 PM  
Craig

It will only be illegal if and when a court says so.
PaulJ6
(New York)

Posts:259


09/03/2019 2:02 PM  
Posted By CraigF6 on 09/03/2019 8:42 AM
Covenants expired here (Georgia) and owners are given the option to join the HOA or if you do not join you have to pay a road fee (HOA owns roadway) at a higher rate than those who sign the HOA. The “Road Use Fee” is above and beyond the regular HOA Dues that includes all maintenance and access to common areas.
It seems to be a coercive attempt to force owners to sign the covenants. Can an we do that?




If you'd please let me know which HOA this is, I'll gladly subsidize a few people to pay the Road Use Fee, if that prevents the plague of another HOA having its claws around people!

Surely a small minority of people could wreck this project.
CraigF6
(Georgia)

Posts:9


09/03/2019 3:28 PM  
Hahaha, our HOA is pretty good right now. Most folks want it there to manage the property while leaving everyone else alone and they’ve done a good job at that. However, I don’t like this type of “sign here or else we’ll make you pay” type of attitude. Which, is exactly how most HOAs operate.
LetA
(Nevada)

Posts:771


09/03/2019 4:03 PM  
collect a toll? Do you collect a toll from visitors as well?
MelissaP1
(Alabama)

Posts:8497


09/03/2019 4:09 PM  
Is this a change to the CC&R's that is being proposed? I am a bit confused. Is your HOA a volunteer or mandatory HOA? If it used to be mandatory, then simply updating doesn't change that. Unless your new updates is for making the HOA volunteer. What is the percentage required to make the changes to the CC&R's?

I hope you are talking to a lawyer familiar with HOA laws, corporate, or contractual law. A Real Estate attorney isn't the way to go in a HOA. Your not dealing with real estate. Your dealing with contractual/corporate laws.

There also isn't a place to "sign" into a HOA. Once the CC&R's are filed/re-filed then everyone is to adhere to them. It's related to the deed filed in the county. So hope you don't think there is some kind of piece of paper one signs to be a HOA member.

Former HOA President
CraigF6
(Georgia)

Posts:9


09/03/2019 7:48 PM  
Posted By MelissaP1 on 09/03/2019 4:09 PM
Is this a change to the CC&R's that is being proposed? I am a bit confused. Is your HOA a volunteer or mandatory HOA? If it used to be mandatory, then simply updating doesn't change that. Unless your new updates is for making the HOA volunteer. What is the percentage required to make the changes to the CC&R's?

I hope you are talking to a lawyer familiar with HOA laws, corporate, or contractual law. A Real Estate attorney isn't the way to go in a HOA. Your not dealing with real estate. Your dealing with contractual/corporate laws.

There also isn't a place to "sign" into a HOA. Once the CC&R's are filed/re-filed then everyone is to adhere to them. It's related to the deed filed in the county. So hope you don't think there is some kind of piece of paper one signs to be a HOA member.




Melissa,
I was told the CC&R expired. We had to agree to the covenants when we purchased the house. Now, they have a new CC&R and are telling owners that they will charge any owner who does not sign and agree to the newer covenant a Road Use Fee, because the roads are privately owned by the HOA, and the fees will be above and beyond what normal Dues. I was told today if owners do not sign they will not only have to pay the road fee but the rules of the HOA will still apply to the owners. But the HOA flat out said the increased “Road Use Fee” was to “Encourage” owners to sign.
MelissaP1
(Alabama)

Posts:8497


09/03/2019 7:56 PM  
They are signing for the changes to the CC&R's not joining the HOA. A document has to be signed to file the CC&R's at the court house. Sounds like they are updating the CC&R's overall. Which I don't think excuses anyone out of membership.

Could it also be that the HOA is saying "If we don't make these changes to the CC&R's the fees for road maintenance will be $500 per individual than $400 if HOA CC&R's are re-filed"? The cost variance meaning the overall cost is divided up better by a larger # than individual expense?

Something just seems a bit off here. I don't see why individuals would pay more as the math makes no sense.

Former HOA President
RichardP13


Posts:0


09/03/2019 8:20 PM  
Posted By MelissaP1 on 09/03/2019 7:56 PM
They are signing for the changes to the CC&R's not joining the HOA. A document has to be signed to file the CC&R's at the court house. Sounds like they are updating the CC&R's overall. Which I don't think excuses anyone out of membership.

Could it also be that the HOA is saying "If we don't make these changes to the CC&R's the fees for road maintenance will be $500 per individual than $400 if HOA CC&R's are re-filed"? The cost variance meaning the overall cost is divided up better by a larger # than individual expense?

Something just seems a bit off here. I don't see why individuals would pay more as the math makes no sense.



It is called blackmail, pure and simple!
CraigF6
(Georgia)

Posts:9


09/03/2019 10:07 PM  
Posted By MelissaP1 on 09/03/2019 7:56 PM
They are signing for the changes to the CC&R's not joining the HOA. A document has to be signed to file the CC&R's at the court house. Sounds like they are updating the CC&R's overall. Which I don't think excuses anyone out of membership.

Could it also be that the HOA is saying "If we don't make these changes to the CC&R's the fees for road maintenance will be $500 per individual than $400 if HOA CC&R's are re-filed"? The cost variance meaning the overall cost is divided up better by a larger # than individual expense?

Something just seems a bit off here. I don't see why individuals would pay more as the math makes no sense.




I asked if the HOA Dues and the Road Fees were the correct amounts and this is what I was told

“That is correct. Those that opt out will pay the road use fee and will NOT have use of any HOA property. ( roads Lake, common area.) If they don't pay the road use fee. they will be trespassing. Also, the rules of the HOA will still apply to them. The dues will be $ 400 and the road use fee will be $500 per year”

I asked them this question “If the covenants still apply to all owners who opt out, why have anyone sign the new one?”
This was the response

“This is what is required to get the covenants into effect. The owners have to be given a choice to join or not. But if they choose not to join then we still have them help support the funding to maintain and improve our subdivision . This is to ENCOURAGE them to be in the HOA. We have spent the last 2 years getting a way to reinstate the covenants. This is legal and has been challenged in court and has been upheld by the judges.”
NpS
(Pennsylvania)

Posts:3655


09/04/2019 5:17 AM  
Posted By CraigF6 on 09/03/2019 10:07 PM
We have spent the last 2 years getting a way to reinstate the covenants. This is legal and has been challenged in court and has been upheld by the judges.”


I assume from this response that your BOD got a written legal opinion on the topic. For confidentiality reasons, your BOD should not share the actual letter with the membership. On the other hand, they should answer the question - Does this statement rely on a written opinion that you obtained from the HOA lawyers?

Sikubali jukumu. Read all posts at your own risk.
CraigF6
(Georgia)

Posts:9


09/04/2019 7:55 AM  
Posted By NpS on 09/04/2019 5:17 AM
Posted By CraigF6 on 09/03/2019 10:07 PM
We have spent the last 2 years getting a way to reinstate the covenants. This is legal and has been challenged in court and has been upheld by the judges.”


I assume from this response that your BOD got a written legal opinion on the topic. For confidentiality reasons, your BOD should not share the actual letter with the membership. On the other hand, they should answer the question - Does this statement rely on a written opinion that you obtained from the HOA lawyers?




Not sure, but I would guess the Board is taking advise from a lawyer either hired by them or one used by the property management company.
NpS
(Pennsylvania)

Posts:3655


09/05/2019 9:00 AM  
Posted By CraigF6 on 09/04/2019 7:55 AM
Posted By NpS on 09/04/2019 5:17 AM
Posted By CraigF6 on 09/03/2019 10:07 PM
We have spent the last 2 years getting a way to reinstate the covenants. This is legal and has been challenged in court and has been upheld by the judges.”


I assume from this response that your BOD got a written legal opinion on the topic. For confidentiality reasons, your BOD should not share the actual letter with the membership. On the other hand, they should answer the question - Does this statement rely on a written opinion that you obtained from the HOA lawyers?




Not sure, but I would guess the Board is taking advise from a lawyer either hired by them or one used by the property management company.


The lawyer should be working directly for the HOA on something like this.

Sikubali jukumu. Read all posts at your own risk.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > HOA charge higher fees to non members?



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