In a nutshell…our account was referred to their collections department due to some so-called past due fees. It was forwarded to THEIR attorney’s office for review. After their review/investigation, the attorney's office found that all past due HOA fees were current (minus a $100 Initial Assessment fee and $250 Ownership Conveyance [transfer] Processing fee) and declined to represent them (HOA). Stating in an e-mail I obtained, “<attorney’s name> has reviewed this referral and believes we need to kick it back to you due to the Association not having the right to collect a transfer fee or initial assessment.”… and another from their other legal assistant: “Since the Association has no authority to charge an initial fee or a transfer fee, it seems as though the account should be current."
HOA Community Manager wrote: "The $250 conveyance fee, is again, a charge by R***M***** payable at closing. It is an administrative charge. No, it is not considered a transfer fee." Resident Services wrote: "Thank you for contacting R***M*****. The Initial Assessment is a one-time charge to all new homeowners. The monies goes towards an "emergency fund" for the HOA. The Conveyance Processing fee is the fee that is charged to transfer ownership and this fee covers the labor and materials expenses incurred by R***M***** to process the issues and documents related to a closing." * * * * * * * * * * * * * * * * * * * * Note: ALL incurred late fees and collection related fees associated with our account regarding the questionable past due association fees were removed/waived immediately following the Associations/Management company's receipt of the attorney's e-mail... leaving the $100 'Initial Assessment' fee and $250 'Ownership Conveyance Processing fee'.
The HOA is "requiring it" Do you want to be involved in a lawsuit over this? You can hire a lawyer and send a letter, but I am not sure how that helps you.
HOA fees are debts under the Texas and Federal Fair Debt Collection Acts. Under these laws, it is generally illegal for a debt collector to try to shake you down to make you pay something that they know you do not owe. The fact that the HOA was put on notice by their lawyers that the HOA does not have the "right to collect" these fees, is strong. But, ultimately what you need to determine is, do you actually owe this initial assessment fee and ownership conveyance fee or not. If you really owe it, it doesn't matter what the law firm said, and you should just pay it and move on.
Your specific question is: "Are we required to pay our HOA's 'Ownership Conveyance Processing Fee'..."?
- The specific answer depends on the facts, 1.) what is in the CC&Rs - Covenants, Conditions and Restrictions for the property and 2.) might the fee fit the definitions in Texas Property Code § 5.202 titled "CERTAIN PRIVATE TRANSFER FEE OBLIGATIONS VOID".
- You can study that to be prepared for a discussion if this turns into a real problem.
- As a practical matter, if it were me, given the situation where they are only showing this on the account and have not taken legal action, then I would let the account stay for the time being and see what is done in the future. Also, I would look in on my credit report and see if any of this is reported there.
- In the event it were reported about me and I was convinced it was in error and could show real damages because of an error on the credit report -- then I would talk with an attorney to pursue a claim to recover an amount for the damages.
The foregoing comments are provided for informational purposes only, and without a fee agreement and fees paid there is no attorney-client relationship being made and no legal services will be provided now or later.