Comments on: That’s Highway Robbery! http://condolawguru.com/2010/02/thats-highway-robbery/ Condo Law & HOA Law for Boards & Owners Thu, 03 May 2012 06:34:02 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Beth Grimm http://condolawguru.com/2010/02/thats-highway-robbery/comment-page-1/#comment-453 Beth Grimm Sat, 20 Feb 2010 03:30:50 +0000 http://condolawguru.com/?p=189#comment-453 I honestly do not know if what you describe is a RESPA issue (maybe someone will develop this discussion by writing in). My question as an homeowners association law attorney (whether speaking for an HOA or Manager, or a homeowner trying to sell the property) would be on what authority the manager would be making these charges. There has to be some underlying authority to charge someone a fee. Some management agents do complete the forms and charge for filling out lender questionnaires - if someone is willing to pay the cost of it. (Others do not because of the liability problem.) I believe in some cases it is charged to the buyer and becomes a charge payable through escrow as the management company is doing it as a service to buyer. There may be something in the governing documents that allows this cost to be charged. I am sure there are those willing to argue that these costs are part of a viable "transfer fee" which generally does allow an HOA to recover actual "costs" involved in the transfer of records from one owner to another. People will be sure to argue over this. There is no legal obligation for an HOA manager to fill out any lender's questionnaire, but obviously, doing it helps facilitate the transaction as many lenders would not consider underwriting a loan if they cannot get the information they need to satisfy the underwriters and, if necessary, FHA, FNMA and the like. For those who are lost, the issue that comes up now and I believe is more in line with what you are asking comes up because FHA, as I understand it, will no longer do "spot" certification (per loan, per lender) on sales in condo associations. So, in order to qualify for an FHA loan, a buyer has to either try and individually get the whole development certifed, or, as will probably happen, will expect the HOA to get itself certified, which of course could result in considerable costs (I am hearing $1500 to $5000 but I am sure someone will be charging more than that). So the question becomes, who should pay for the HOA certification process: all owners in the development (making this a budget item) or just those who need the benefit of it? And, another rub ... the certification is not forever. The HOA's certification, should one be willing to "go there", as I understand it, comes with a shelf life, maybe two years? Maybe more or less - would be happy to get some firm number if there is one. Yes, the plot thickens. I am studying these issues so if anyone out there wants to add something [meaningful] to the discussion, please do. I will warn you though, I probably have more questions than answers! And no whining allowed. This is a real problem that cries out for a real solution. I am working on an E-newsletter on the topic as we speak. Sign up now at www.californiacondoguru.com to get the free monthly E-news called "What's New in HOA Land?" I honestly do not know if what you describe is a RESPA issue (maybe someone will develop this discussion by writing in). My question as an homeowners association law attorney (whether speaking for an HOA or Manager, or a homeowner trying to sell the property) would be on what authority the manager would be making these charges. There has to be some underlying authority to charge someone a fee. Some management agents do complete the forms and charge for filling out lender questionnaires – if someone is willing to pay the cost of it. (Others do not because of the liability problem.) I believe in some cases it is charged to the buyer and becomes a charge payable through escrow as the management company is doing it as a service to buyer. There may be something in the governing documents that allows this cost to be charged. I am sure there are those willing to argue that these costs are part of a viable “transfer fee” which generally does allow an HOA to recover actual “costs” involved in the transfer of records from one owner to another. People will be sure to argue over this. There is no legal obligation for an HOA manager to fill out any lender’s questionnaire, but obviously, doing it helps facilitate the transaction as many lenders would not consider underwriting a loan if they cannot get the information they need to satisfy the underwriters and, if necessary, FHA, FNMA and the like.

For those who are lost, the issue that comes up now and I believe is more in line with what you are asking comes up because FHA, as I understand it, will no longer do “spot” certification (per loan, per lender) on sales in condo associations. So, in order to qualify for an FHA loan, a buyer has to either try and individually get the whole development certifed, or, as will probably happen, will expect the HOA to get itself certified, which of course could result in considerable costs (I am hearing $1500 to $5000 but I am sure someone will be charging more than that). So the question becomes, who should pay for the HOA certification process: all owners in the development (making this a budget item) or just those who need the benefit of it? And, another rub … the certification is not forever. The HOA’s certification, should one be willing to “go there”, as I understand it, comes with a shelf life, maybe two years? Maybe more or less – would be happy to get some firm number if there is one.

Yes, the plot thickens. I am studying these issues so if anyone out there wants to add something [meaningful] to the discussion, please do. I will warn you though, I probably have more questions than answers! And no whining allowed. This is a real problem that cries out for a real solution.

I am working on an E-newsletter on the topic as we speak. Sign up now at http://www.californiacondoguru.com to get the free monthly E-news called “What’s New in HOA Land?”

]]> By: Chris Gardner http://condolawguru.com/2010/02/thats-highway-robbery/comment-page-1/#comment-446 Chris Gardner Sun, 07 Feb 2010 01:10:23 +0000 http://condolawguru.com/?p=189#comment-446 If an association or management company pays the costs of getting an association approved for HUD financing, would it be allowed to charge the fha buyers for whom the benefit of fha eligibility inures a reasonable fee to recover the costs of making this benefit available. Would this be a RESPA issue? If an association or management company pays the costs of getting an association approved for HUD financing, would it be allowed to charge the fha buyers for whom the benefit of fha eligibility inures a reasonable fee to recover the costs of making this benefit available. Would this be a RESPA issue?

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