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socrateaser
socrateaser, Attorney
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Experience:  Retired (mostly)
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I am on the board of a mandatory membership 55/ov HOA in south

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I am on the board of a mandatory membership 55/ov HOA in south Texas. On October 23, 2011, when I was the Board President, I received a letter from the developer who is also the owner of the golf course we contract with for golf privileges, which said as follows:
To XXXXX Phase 1 residents and Monte Cristo Phase 1 residents

Monte Cristo Golf and Country Club will charge a $1500 Re-registration fee on all homes and lots sold after November 1, 2011.

Signed ________________ Fred Palacios

Please note that there were new laws enacted by the 2011 Texas legislature affecting Property Owner Associations and Restrictive Covenants.
I have a document written by Attorneys Graves,Dougherty, Hearon & Moody in Austin Texas summarizing some of these new laws which says as follows:

New transfer fees are void. Pursant to section 5.202, a private transfer fee established after June 16, 2011 that is passed through a 3rd party designated or identifiable in a declaration is void. Private transfer fees established prior to that date may be grandfathered if notice is filed in the real property records no later than January 31, 2012 and refiled every three years. An association may continue to charge a fee ( which may be payable to a management company relationg to updating the associations records or preparing resale or estopped certificates.

His document telling us about his re-registration fee has not been filed with the county courthouse here.
Our 1st home sale since that letter is coming up around Aug. 13th and the title company involved can't find any record of this document either.
My question to you is can Mr. Palacios legally force someone to pay the $1500 ? Does the new transfer fee law apply here or does something else.? thank you J.D. lenderts ( if you need more details please let me know!)
Submitted: 1 year ago.
Category: Business Law
Expert:  Fran-mod replied 1 year ago.
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Customer: replied 1 year ago.
yes, still waiting for an answer
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Customer: replied 1 year ago.
yes, keep searching for a professional
Expert:  Fran-mod replied 1 year ago.
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Customer: replied 1 year ago.
yes. please continue searching for an answer
Expert:  Damien Bosco replied 1 year ago.
Welcome! This is an information request. Have you spoken to Fred Palacios about the changes in the law? If so, what is his position? Thanks.
Customer: replied 1 year ago.
his position is that other developers are doing this, but i could not find any developers doing this and it not being in the Covenants or filed with the county should certainly void his letter
Expert:  Damien Bosco replied 1 year ago.

I am happy to help you. If you need clarification with this answer, hit reply and ask a follow up question prior to providing a rating. Otherwise, after reviewing the answer, please provide a positive rating without additional cost to you so I receive credit for the services I am providing you.

We cannot comment on such a local issue from this webite as you understand. However, from the fact you provide, you are in a strong position to challenge the request for a fee. In situations similar to these, the burden would be on the person or entity requesting the fee to cite to the statute or regulation that permits them to require a fee. Stating that other developers are charging a fee does not provide legal justification for the fee requirement. Your research into the matter is appropriate and the developer should show proof of the right to charge the fee.

Feel free to ask follow up questions before providing a rating. This information provided to you is informative and helpful. If you need clarification, feel free to hit reply so we can work on any clarification prior to providing a rating. Otherwise, please provide a positive rating now without an additional cost to you so I receive credit for the services I am providing to you. I am doing my best to help you. Thank you, Damien
Customer: replied 1 year ago.
This developer is a bully type person, has his own set of laws and only follows those, is best to tell him why he can not do something instead of asking him why he thinks he can do something.. does the new law on 'transfer fees " apply to him and his re-registration fee ?
Expert:  Damien Bosco replied 1 year ago.
Hello again: I will have to opt out so possibly another expert can help you. Thank you.
Damien Bosco, Attorney
Category: Business Law
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Experience: Helping you with your legal questions.
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Expert:  socrateaser replied 1 year ago.
Hello,

Different contributor here. Please permit me to assist.

TX Property Code 5.202 does indeed void all private transfer fees, and Section 5.203 requires that notice of a continuing fee must be recorded with the county no later than Jan 31, 2012. However, Section 5.202 has 10 different exceptions. None of the exceptions use the term "re-registration fee," so on its face the fee claimed is unenforceable. However, if the substance of the fee is provided for in the original declaration of covenants of the community association, then it would not be a private fee, but rather would be a legitimate association transfer fee. Also, subsection (b)(9) provides for a fee associated with the maintenance of a recreational facility operated by a 501(c)(3) or (4) tax-exempt organization -- such as a golf and country club.

So, if this fee is used to maintain the country club, and the club is operated by a tax-exempt organization, then the fee is lawful.

In other words, the developer can't just pocket the dough. The fee must be deposited in the country club's operations account, and the organization must be qualified as tax exempt by the IRS.

Hope this helps.

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Category: Business Law
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Experience: Retired (mostly)
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