Can a TX developer charge a flat fee to make up for shortage of HOA fees from foreclosed properties?

Asked by Jennifer Sanchez, Prosper, TX Sat Oct 25, 2008

HOA dues haven't been collected from foreclosures. The developer controls the HOA and has asked all homeowners to pay a flat fee to make up for the budget shortfall. Basically, the developer can't pay expenses without our new fee. He says that the delinquent dues simply cannot be collected. Is this true?

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T.E. & Naima Sumner’s answer
T.E. & Naima…, Agent, Dallas, TX
Sat Oct 25, 2008
That question can be answered in the by laws of that specific HOA. If that clause does exist in the HOA documents from when you purchased the property than they can force the other homeowners to do so.

Every HOA by laws are different.

What community in Prosper has that many foreclosures that the HOA doesn't have any reserves to operate?

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Ronda Allen, Agent, Plano, TX
Mon Nov 16, 2009
Jennifer, there is a very complicated HOA situation going on in one Prosper master-planned development at the moment, so your question would be best posed to the Texas Real Estate Commission (TREC) or the Collin County Association of Realtors (CCAR) rather than to we agents. We have strict guidelines by which we must adhere, so we don't get into a situation giving legal advise. We are liaisons to the purchase and sale of property. TREC and CCAR are higher bodies with the ability to guide you to the answers you need or the legal advise you may require.

Have a blessed day!

Ronda Allen, Realtor and C.P.M.
CEO of
Prosper Resident Realtor
RE/MAX Dallas Suburbs-Keith Dobbs Team
#1 Office and #3 Team for RE/MAX in North Texas Region at mid-year 2009!
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Mark Chovan, , Frisco, TX
Mon Oct 27, 2008
You might ask the developer if the HOA dues will eventually be paid when the homes are sold by the Lenders. These homes will sell through a Title Company which would find a require the pass dues be payed at closing.

If this is the case, your HOA money will eventually be recovered.
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Bruce Lynn, Agent, Coppell, TX
Sun Oct 26, 2008

This is indeed a tough situation. You'll need to go back and look at your HOA documents that you received at closing or before to determine what is possible. It could be tough for the developer to collect the fees on foreclosures or collect them in a timely manner. Therefore you could be left holding the shortfall if there are provisions for this in the HOA documentation. You may also want to consult a board certified real estate attorney and band together with your neighbors to present a united voice.
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