*INSANE* HOA resale certificate fee (Texas)?!
I'm selling a house in Texas that's located in an HOA. My understanding of it is this:
When you sell a home that is part of an HOA in the state of Texas, Texas Property Code Chapter 207 requires an HOA to provide disclosure. This disclosure/information is called a “resale certificate." The HOA is allowed to charge a "reasonable fee" to produce this.
If I google it, I find tons of people disputing a) the legality of it and b) what is considered reasonable. Many people feel that getting charged over $300 is literally a scam.
Here's the breakdown of mine, none of which I'm familiar with:
To the HOA:
$275.81 regular assessments
$1000 Working Cap Assess.
To the HOA's management:
$275 Ownership Conveyance Processing Fee
$260 Resale Disclosure Fee
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TOTAL FEES: $1810.81
Am I misunderstanding something here? I'm totally unfamiliar with this but from anything I've been able to find with google these fees sound outright criminal.
These fees have become a great source of revenue for the HOA and the management companies in a booming economy. Unfortunately, these are not out of line except for the Working Capital Assessment. What is that ?
Reality is these take a $12hr employee for the Management company about 10 minutes to put together
Perhaps the assessments were outstanding and should have been paid (were owed) by the seller in the ordinary course of owning property subject to the HOA bylaws. As mentioned, the other fees are not insane.
In the Houston Market, the resale cert was either paid for by the seller or the buyer. Some were mandatory and others were the choice of the buyer. What most buyers don't know is that most HOAs will have their deed restrictions online for free, but the actual resale certificate goes into much more detail about the HOA and its finances, upcoming special assessments, any outstanding lawsuits, the budget and insurance information too. This is helpful to a buyer. What it says about the seller is if there are any outstanding dues, or fees that the seller has not paid, as well as any deed restriction violations that have not been resolved. Any outstanding balance with the seller will be paid at closing out of the seller's proceeds, regardless of whether a resale certificate was ordered by the buyer.
The typical fee I have seen for resale certificates is between 200-300 dollars. The amount is paid for outside of closing by the buyer or the seller (as specified on the contract).
On one occasion, I had a seller charged an HOA community fee for selling. It was in the original deed restrictions and covenants when they purchased, but they weren't aware of it until they sold. It was a certain percentage of the sales price. I have heard other communities doing this as well.
You should be able to call your HOA management company to ask about the specific fees and who they are normally charged to. Good luck!
We've sold 6 properties in Texas in the last 2 years. Every time we've had to pay an HOA Resale Certification Fee of $455. I believe this is an exorbitant fee / ripoff for what amounts to probably 15 minutes of work sending some electronic documents. One more reason why I haven't enjoyed investing in Texas...
We just paid this fee TODAY for the Rosebud HOA in Ellis county ... $521.00 !! This is extortion. What politicians decided this was "OK"? Who do I need to pester for the next unfortunate soul that has to pony up this joke of a fee?