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Subject: Builders within a community
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ReneeH5
(Texas)

Posts:35


01/07/2020 9:46 AM  
Do builders pay late fees on past due assessments? The community isn't fully built out yet but has a homeowner board so no declarant control. Weird situation I know...
SheliaH
(Indiana)

Posts:2851


01/07/2020 12:53 PM  
Until the builder turns the community over to the homeowners, it can pretty much do what it wants, so you'd have to see what, if any powers the homeowner board currently has. Take a look at your documents - this HOA board may have more say in what the homeowners do, and even their power is dictated by the developer.
ReneeH5
(Texas)

Posts:35


01/07/2020 2:12 PM  
Posted By SheliaH on 01/07/2020 12:53 PM
Until the builder turns the community over to the homeowners, it can pretty much do what it wants, so you'd have to see what, if any powers the homeowner board currently has. Take a look at your documents - this HOA board may have more say in what the homeowners do, and even their power is dictated by the developer.




There is no developer, just a builder building houses on lots. The original developer/declarant bailed in 2016 and turned it over to the homeowners to vote a board and carry on...
GeorgeS21
(Florida)

Posts:1829


01/07/2020 2:34 PM  
Sounds like builder might just be a property owner.
MarkM19
(Texas)

Posts:502


01/07/2020 3:04 PM  
Renee not quite sure we are getting your question. I am assuming you are asking if the Builder pays dues. Yes they should be paying for lots that they are building on. If they do not pay the dues then they should pay the late charges just like any other owner of a lot. The builders really do not have any real strength in your HOA other than the votes for the lots they own. Most do not use that voting power they just want to build and Sell their homes.

If this is not the question you were asking please ask it again in a different way so the community here can help you.
ReneeH5
(Texas)

Posts:35


01/07/2020 3:33 PM  
Posted By MarkM19 on 01/07/2020 3:04 PM
Renee not quite sure we are getting your question. I am assuming you are asking if the Builder pays dues. Yes they should be paying for lots that they are building on. If they do not pay the dues then they should pay the late charges just like any other owner of a lot. The builders really do not have any real strength in your HOA other than the votes for the lots they own. Most do not use that voting power they just want to build and Sell their homes.

If this is not the question you were asking please ask it again in a different way so the community here can help you.




That is the answer I have believed. Some argue that they are the builder and pay nothing more than dues and only WHEN it suits them which is pretty much when the house sells. I've said they are an owner just like the rest of us and should be treated as such.. Late fees and all..
MarkM19
(Texas)

Posts:502


01/07/2020 3:47 PM  
Renee,
Don't run with what you hear from one of us. There is a lot of smart Texans and others on this site that may think I have missed the boat. I have only been in Texas for 2 1/2 years and the HOA laws IMO leave a little to be desired.
ReneeH5
(Texas)

Posts:35


01/07/2020 7:01 PM  
Posted By MarkM19 on 01/07/2020 3:47 PM
Renee,
Don't run with what you hear from one of us. There is a lot of smart Texans and others on this site that may think I have missed the boat. I have only been in Texas for 2 1/2 years and the HOA laws IMO leave a little to be desired.




All the research I have done leads to this answer so no worries! Just thought I'd ask all of the knowledgeable people here...
MelissaP1
(Alabama)

Posts:8875


01/07/2020 7:54 PM  
Think here is the confusion lays... Many times in the developmental/building phase dues are NOT paid on "empty" undeveloped lots. They do not collect dues until the lot is developed. Considering the person or persons that own the lot are the builder, they may not pay until a home is built.

Hence that is why a builder may not pay dues during this period of time. It also can work with others who may have bought the empty lot but have not yet built. Until a home goes up, it does not create income to the HOA via the dues. Once developed it then is required to participate.

Former HOA President
GeorgeS21
(Florida)

Posts:1829


01/07/2020 8:09 PM  
Melissa is correct- I’ve seen this, as well.
ReneeH5
(Texas)

Posts:35


01/07/2020 9:29 PM  
Posted By MelissaP1 on 01/07/2020 7:54 PM
Think here is the confusion lays... Many times in the developmental/building phase dues are NOT paid on "empty" undeveloped lots. They do not collect dues until the lot is developed. Considering the person or persons that own the lot are the builder, they may not pay until a home is built.

Hence that is why a builder may not pay dues during this period of time. It also can work with others who may have bought the empty lot but have not yet built. Until a home goes up, it does not create income to the HOA via the dues. Once developed it then is required to participate.




Was told by previous management that once the lots are platted, we can charge dues. Problem was, they never enforced late fees and the like. And they paid what they wanted, when they wanted. Basically dues only with no other fees or ‘junk charges’ as they’ve called them..
MelissaP1
(Alabama)

Posts:8875


01/07/2020 9:44 PM  
They are not late. Late charges are punitive. There is no punishable issue here as not required to pay till platted.

What result do you want? Just more money for a non profit? Do not think understand how budget works in a HOA. It is not like your personal accounts. Nothing to be mad about here.

Former HOA President
GeorgeS21
(Florida)

Posts:1829


01/08/2020 6:43 AM  
Renee,

You need the facts vs using what you were told.

If your governing docs don’t provide for builders who own lots to be treated differently than other property owners, they should and must be treated the same.
SteveM9
(Massachusetts)

Posts:3508


01/08/2020 7:12 AM  
If your governing docs don’t provide for builders who own lots to be treated differently than other property owners, they should and must be treated the same.


If fees are legally owed, I would place a lien on the property. It will be paid before or at closing of whoever purchases the house. You must do this before the house sells, or it gets harder.
GeorgeS21
(Florida)

Posts:1829


01/08/2020 7:16 AM  
To Steve’s point - the builders know this!

The information you need to make determination of builder status is straightforward and available.
CD6
(Texas)

Posts:5


01/08/2020 7:53 AM  
Just who does own the lot?
I believe it would be platted to build upon it.
If the builder owns the lot, he is responsible for HOA dues.
If he is building for the property owner, the owner owes the dues.

Do you have an ACC?
How did the builder get permission to build?
Any review of the house plans?

If there are dues owing on an empty lot and someone wants to build on it,
there will be no approval from the ACC until dues are current.

The builder, if the owner, would receive a prorated amount of those dues back at closing.

The no dues on undeveloped lots is not always correct. When you purchase a
lot in many subdivisions, you are automatically a member of the HOA,
house or not, and are subject to dues.
BarbaraT1
(Texas)

Posts:251


01/08/2020 10:31 AM  
What do your governing documents say about this subject?

JohnC46
(South Carolina)

Posts:9041


01/08/2020 2:52 PM  
The basic question is when does one start paying HOA dues? Upon platting? Upon building a home? Upon sale/occupation of the home?

Look to one's Covenants for an answer. If not their, your choice and be prepared to defend anything other than upon sale/occupation and maybe defend such in court.


JohnC46
(South Carolina)

Posts:9041


01/08/2020 2:53 PM  
Posted By JohnC46 on 01/08/2020 2:52 PM
The basic question is when does one start paying HOA dues? Upon platting? Upon building a home? Upon sale/occupation of the home?

Look to one's Covenants for an answer. If not their, your choice and be prepared to defend anything other than upon sale/occupation and maybe defend such in court.






If not there, not not their.........LOL
MelissaP1
(Alabama)

Posts:8875


01/08/2020 4:34 PM  
Like to point out that late fees are not necessarily be part of a lien. Meaning you can't just lien for late fees. It may need to be a combo of dues, late fees, interest, and legal/filing fees. Late fees are punitive measures. Which are not subjected to liens similar to fines.

Former HOA President
SteveM9
(Massachusetts)

Posts:3508


01/08/2020 6:31 PM  
Posted By MelissaP1 on 01/08/2020 4:34 PM
Like to point out that late fees are not necessarily be part of a lien. Meaning you can't just lien for late fees. It may need to be a combo of dues, late fees, interest, and legal/filing fees. Late fees are punitive measures. Which are not subjected to liens similar to fines.




Well maybe in your state and your HOA but not everywhere. The poster is NOT in your state.

You can typically lien for any money owed (depending upon your state, and hoa docs)
SteveM9
(Massachusetts)

Posts:3508


01/08/2020 6:32 PM  
And if the lien is for a small amount, do you really think the buyer or seller is going to throw a fit and get legal with you? No, they are simply going to pay it to buy the house.
MelissaP1
(Alabama)

Posts:8875


01/08/2020 8:30 PM  
Late fees are considered PUNITIVE. They can be waived. Dues are not punitive charges but required. So most states do not allow for punitive fees to be used in lien/foreclosures. Name me one since you want to be "statist" with every comment anyone makes.

Former HOA President
NpS
(Pennsylvania)

Posts:3970


01/08/2020 9:01 PM  
Posted By MelissaP1 on 01/08/2020 8:30 PM
So most states do not allow for punitive fees to be used in lien/foreclosures.

Fines can be included in foreclosures in PA. But non-judicial foreclosures are not allowed in PA.
Also, HOA liens are automatic on all charges (including fines) without the need to file.

If I'm not mistaken, non-judicial foreclosures are allowed in AL. Very different.

Please be careful with your generalizations about what "most states" do. Things are quite a bit more complex than you make them out to be.

Sikubali jukumu. Read all posts at your own risk.
ReneeH5
(Texas)

Posts:35


01/09/2020 11:05 AM  
Our docs give us the ability to lien and or foreclose on any amount due.
JohnC46
(South Carolina)

Posts:9041


01/09/2020 2:42 PM  
We have an attorney of record who has a very large HOA legal firm. We are a little fish in a big pond for him. He has not been called on by us for much but when he is, he is not responsive. We will be keeping him as our attorney of record as his firm's name scares many off, thus protection for us.

We recently began cracking down on late dues payers and our first step was to turn to a well respected/recommended local attorney to handle these issues for us. Point of my story is the new attorney said "ANY" money owed to the HOA could be included in liens/foreclosures. I asked about fines? He said yes. While they could not be used as the basis for such, meaning only late dues can be, but any money owed to the association can be added as part of what is owed to the association. I found that interesting.
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