When a property is changing hands and it is part of a mandatory property owner’s association, there are typically fees paid to the association linked with the transfer of the property. Until now, it was a challenge to find out those exact fees until the property was already under contract. That often created a surprise for buyers and sellers.
Texas recently resolved that when the 2021 Texas legislature passed an amendment to the Texas Property Code governing property owners’ associations. Most homeowner’s and property owner’s associations (commonly known as HOAs) and management companies are now required to file in the public record their Management Certificate and a list of all fees that they charge for the transfer of the property.
The information they are required to provide includes the fees charged by the association relating to a property transferring ownership. The Management Certificate includes the name and contact information for the HOA and the person managing the HOA. This must be recorded with the county clerk, where the HOA is located.
As a result, the Homeowner’s Association Management Certificate Database website is now live and available to the public. The TREC website for HOA management certificates is https://www.hoa.texas.gov/ .
The information provided to the public gives names and addresses of HOA management and their website, if they have one. The information on this site does not contain the HOA bylaws, rules, restrictions, regulations, etc. That information must be obtained from the HOA, usually for a fee.
“The new HOA website is a great resource for both buyers and real estate agents,” says Realtor JB Hayes of Briggs Freeman Sotheby’s. “It provides a centralized location to research and compare HOA information that otherwise might not be known until the buyer is already in the purchase process.”
This move by the state and service from TREC is a big step toward providing more transparency in HOA operations. If an HOA changes its fees, the HOA or management company must file a new certificate with the county clerk noting the change.
While TREC is responsible for maintaining this database for the public, TREC does not have authority, enforcement, or jurisdiction over HOAs. Associations with fewer than 60 lots are exempt from this requirement.
Limit on Some HOA Fees
New laws also went into effect in 2021 regulating fees charged by HOAs and management companies for single-family homes. This new law caps the fees charged for providing the subdivision information (a resale certificate) at $375.
How are fees allocated between buyer and seller? The HOA does not determine who pays for what. The contract signed by buyer and seller and what is negotiated in the contract dictate what fees are charged to whom. For a condominium, the amount buyer and/or seller pays is completed on page 6. For a single-family home, the amount is written in on the HOA addendum.
The opinions expressed are of the individual author for informational purposes only and not for legal or financial advice. Contact an attorney or accountant for any particular issue or problem.
