Association fees, deposits for reserves, and all other charges associated with transfer of a property are covered by Paragraph C of the Addendum for Property Subject to Mandatory Membership in a Property Owners Association (TXR 1922). These fees had been split into two paragraphs, but the two paragraphs are now combined with the intention to cover all fees associated with the transfer of the property. Paragraph C also provides a blank for the parties to set a maximum limit on the dollar amount of those fees that the buyer is responsible for. The seller is required to pay the amount of those fees that exceed that maximum limit.
The confusion is the language “Except as provided in paragraph A & D” I take that as this is different than A & D (other than A & D which is transfer and resale) the wording is confusing to all parties. If it is an exception to those paragraphs then this would not cover any fees in A &D. Can you clarify?
I read it as C covers everything still left to be paid at closing that is not:
Paragraph A: the actual resale certificate itself, or
Paragraph D: paid upfront and prior to closing by either Buyer or Seller as specified by box marked.
So therefore, C could could consist of foundation fees, capital expense fees, community endowment fees, et that were not paid prior to closing.
There are subdivisions that specify buyer to pay X fees and seller to pay X fees…so which is honored? the HOA addendum or the requirements of the HOA/Management co?
The HOA addendum. The management company cannot require who pays for what.
I am assuming Nancy David is correct… that is how I understand it… but… it would be nice for an “official” nod.
I questioned a title company recetly on this because my buyer was being chared for the excess fees not the seller and the title company didn’t change it so I think the title companies need to be educated on the correct process please.
Who pays for the working capital fund? In the past the buyer paid it since they are moving into the neighborhood, there is confusion on this as well. Most recently title just split it up according to the contract and the seller incurred a portion of this cost.
It is especially important when contracting on condo purchases. The Working Capital Contribution is different in every development. Many times Agents do not know the amount of the fees until the Resale Certificate is received almost 2 weeks after contract.
I agree that it is especially important in condos, and think that most Listing Agents fail to do their due diligence in gathering this info and disclosing the fees up front. As a Listing Agent you need to protect that your Seller does not pay any additional fees! The question I have is that most condos also require Advance months of HOA fees at closing. Should this $ amount be included in the total on the Condo Contract?
This form is NOT for Condos… Read the doc.
When there is a first time home buyer fee of $2500.00 does that go in the HOA blank or is it written in special provisions? No one does it the same
Looked at the 2018 form, did not notice any CHANGES in 2020, ior 2021, no new form on Zip Form at this time.
Thank You. Let me knowcid I am incorrect.
Very strange: when checking Zipforms via the TAR site, the new form is there reflecting the changes. Other links to Zipforms still have the 2014 form.
The HOA document is the number document that cause client’s heartburn. The document needs to be broken down and needs to be more clear. In paragraph 2, why would the buyer pay for and deliver subdivision information to the “Seller”. Also some subdivisions have as many as 4 HOA fees. I helped a client buy a condo with 4 HOA fees in the past.
It says “deliver a copy”. But yeah… Why??? I hope you did not use this form for a Condo.
The new form helps but disclosure and transparency are lacking. Often buyers – and many times, sellers – enter into a contract without knowing what charges will be incurred at closing, such as POA/HOA transfer fees, management company fees, etc. Though POA/HOA transfer fees are often noted in MLS, and the Sellers Disclosure lists annual assessments, there could be additional, and significant, mandatory fees such as a “foundation” fee, which is usually calculated as a percentage of the sales price. Typical example: each time a home is sold and resold, the foundation fee – 1/2 of 1% of the sales… Read more »
Yes… Yes… Yes Katheryn!!! But you forgot to mention the worst problem here… Management Companies are not required to be Licensed unless they are involved in leasing or sales transactions.
Practically speaking they are not accountable to anyone but they are involved with large amounts of monies, large contracts, and legal and financial dealings with homeowners… does this make sense for the consumer???
This is a very good change on this form so Buyers can shield themselves from undisclosed fees. Sellers and Listing Agents should do their homework for the sake of transparency and to be aware of (and disclose) HOA mafia fees at closing. Many HOA’s and Management Companies are out of control with their fees. In the Houston Area Buyers need to be wary of CAP Fees, Adopt a School Fees, and recurring Buyer Transaction Fees that go as high as 1/2 of 1%. It is a Mafia!!!
The HOA Resale Certificate includes a request for the Title Company to collect future dues for 2 months in addition to listing the transfer fee $350 and working capital fee $300. The Title Company is trying to include those future dues as part of the fees included in Paragraph C. of the HOA Addendum. I have suggested that these future dues should not be included in Paragraph C. calculations because they are specific to the Buyer’s responsibility and not associated with the direct transfer of the property. It is like asking for the Seller to pay the Buyer’s first two… Read more »
Thank you for asking this as I am curious as well if you need to include that 2 months/ reserve dues amount now in the amount in section C, not just the transfer fees.
Commenting to bump this. I understand this paragraph as the working capital fee should be considered a reserve which is specifically covered within the TREC form.
Can we please get an official opinion from someone? I have a title company attempting to argue the opposite right now. Go figure it’s a title company owned by the seller…
If you are working a condo resale contract, is it ok to leave the cap for the buyer expenses “blank” when it is assumed buyer to pay for all the fees? If it is left blank that reads that buyer is to pay for all those HOA fees, expenses and working capital? Is that correct?
I understand transfer fees and working capital fees should be included in Paragraph C. as to what is charged to the Buyer for the transfer of the property. We have one Title Company adding in future dues, in this case, 2 months, and if they aren’t included on the HOA Addendum in Paragraph C., they are being charged to the Seller. They have advised if it is listed on the Resale Certificate, it has to be charged to the Seller if not included in Paragraph C of the Addendum. How do we resolve this?
TREC will create a publicly accessible central database of Texas HOAs by December 1, 2021. HOAs that have filed management certificates in county records before December 1, 2021 are required to file with TREC by June 1, 2022.
Find out more: https://www.hoa.texas.gov