Residents of Avalon at Seven Meadows should be aware that their new management company Arrow Community Management is now charging a $675 cap fee on all sales as part of an amendment to the Avalon covenants recorded in December 2009. The developer apparently threw in the surprise charge when the community was turned over to residents a few years ago.
The $675 back-door transfer charges are a bit surprising, because the fee has not shown up on previous sales. I've sold several properties in Avalon in the past few years, and none of the settlement statements reflected a cap fee. I asked Arrow to point out the clause in the restrictions which allowed the fee, and was pointed to section 5.3 of the declaration...
Cap fees such as this were an issue in recent legislation contained in HB-8 which was enacted earlier this summer. HB-8 was proposed to limit hidden revenue streams to developers and other third-party interests. Not surprisingly, HOA management lobbyists managed to include exemptions in the bill to protect their hidden revenue streams built into HOA covenants.
New rules will require HOAs and their management companies to disclose their deed restrictions to the public next year, but it is still up to home buyers and their agents to dig through those covenants and title commitments to see what hidden charges might be lurking. Cap fees like the ones in Bridgeland (0.5%) and Towne Lake (1.0%) are no doubt catching many buyers and sellers by surprise when they get to the closing table.
It's unfortunate that HOA's and their management companies don't do a better job of disclosure, but when you have crony capitalists like like John Carona (owner of Associa Inc.) masquarading as impartial legislators, the mess we have in Texas is not surprising.
The Grand Lakes Home Owners Assocation (HOA) implemented an improved website this year. Grand Lakes home owners can now go on-line and get answers to more of their questions. GrandLakesLife is now the official address of the Grand Lakes Home Owners Association. It contains general information about the community, as well as documents like budgets, deed restrictions and architectural review applications. The site is still growing, so expect it to become a more informative portal going forward as more Grand Lakes residents make use of their new communications tool.
Residents of Cinco Ranch Southwest received a new management company this month. CIA Services located at 9800 Centre Parkway, Suite 625, Houston TX 77036 is now servicing Cinco II. Cinco Southwest residents can ask for Karen Cooper, the new community manager. The phone number is 713-981-9000 and you can reach her via email at email@example.com.
Residents of Cinco I will continue to be served from the Mason Road office ( Phone number 281-599-0408)
Residents of Avalon at Seven Meadows received a larger HOA bill this year. The HOA fee for Avalon residents will now be $800, up from the previous $650 assessment last year. The 2008 budget calls for projected expenses of $294,000 and a budget deficit of $54,000. This will be a concern for residents going forward as the community works toward self-sufficiency and a manageable operating budget.
The two largest items on the budget include landscape maintenance and electricity, accounting for over 63 percent of the total operating expenses. Spectrum Association Management and the Taylor Woodrow board of directors recently approved a new contract with Reliant Energy, but after discussions with Spectrum Association staff it appears that a more favorable rate would have been possible with another electricity provider.
When Taylor Woodrow is no longer subsidizing the operating budget and residents are solely responsible for the neighborhood, more prudent fiscal management will be necessary. Avalon residents have already experienced this with the landscaping budget when the previous landscaping company was let go due to mismanagement. Avalon is also on its third management company. Spectrum Association Management picked up the account after Principal Management and Houston Community dropped the ball.
It should be noted that the $800 HOA assessment from Spectrum does not include the $740 assessment that all Seven Meadows residents incur. Avalon residents are responsible for two separate HOA assessments.
The Seven Meadows Annual Meeting will be held at the Seven Lakes High School 9th Grade Center on December 6th. 2 Board members are scheduled to be elected. Residents interested in being considered as a candidate can fill out the questionnaire form and turn it in by November 1st.