I can't seem to find a clear answer on the internet. I own a condo in Texas, the monthly HOA fee was $200 for the past several years. This month, and for the next 5 months, they have increased the fee to over $1400. This fee is more than double my mortgage, taxes, and insurance. Apparently on Oct. 12th they had a "Special Meeting" to discuss projects that were needed for the Common Areas of the complex, the cost of the projects costs nearly $400,000. During this meeting, an investor from California that owns a bunch of the units, out voted everyone that owns and resides there. I question the HOA's board fiduciary duties of starting this expensive project at a time when interest rates are high and savings accounts are at a 40 year low the month before the holidays.

But to my question. It really seems like there should be some sort of cap on how much your HOA fees can rise month over month, are there any such caps in Texas?

I don't necessarily disagree that the things they are saying needs to be done, but I 100% disagree that they all need to be done at the same time, why can't they tackle one project at a time? None of them are emergencies or dangers, they are all cosmetic related.

Pay the normal $200 and tell them to pound sand.

Well, I had it on auto draft, so the first $1400 came out yesterday, which is what spurred this post. They increased the fee with no written notice and it just got auto drafted out of my account.

I would be curious if they went through the property procedures to call the meeting outlined in the documents. If they did not, that would throw out anything decided at the meeting.

During developer control, Texas limits increases to 10%. It doesn't sound like that applies in this situation, but I would be curious if someone owns more than 50% of the units does the law apply? Meaning are they considered a developer by their voting majority? If it was done by special assessment, they aren't allowed to do those until turnover.

I think they called the meeting properly, and this property is older so the developer is definitely not involved at this point. But you bring up an interesting point, if someone holds enough votes to render the rest of the votes moot, and is thus single handedly deciding to renovate and refurbish, does that make them a de facto developer of the property, and if so, do other rules/laws apply?

Might be worth it to find out if this developer is also going to be the one doing the work that caused your fees to increase. Meaning the money that's being collected is going to him/his company.

It's interesting that they were able to auto draft a special assessment. I'd assume it would have to be invoiced as a separate bill. But yeah, HOAs can do special assessments beyond the regular yearly fee. I'm not sure what restrictions there are on them, if any.

No interior insurance included in that, each tenant is required to carry their own. Every statement I see of the reserves its always like $20K. The yearly receipts are about $130K, so they are keeping about 15% I guess which seems adequate, but apparently its not if we need these huge special assessments. Their total yearly receipts is a $130K, and they hit us with a $360K assessment...bananas

The first thing to do is read the governing documents. Our HOA can only raise the dues 10% a year. Anything else has to be a special assessment as mentioned. A raise more than what the governing documents allows would have to voted on by the homeowners and win by a majority.

That could have been overcome by that investor you mentioned and then it is the question if that person is a homeowner or a developer. Don't know anything about that.

Our HOA had a infrastructure review that determines how much we need in reserves to avoid any special assessment. We have 1100 homes and about $2M in reserves but we own our roads so that is a big ticket item.

What is the nature of the project? New landscaping or concrete repairs of the elevated pool deck?

Cape Aggie is right. I'm on the board of my HOA, and we only raise our dues by 10% each year without special approval from the homeowners, which would require supermajority approval (66%). Actually a problem for us, we have been poorly managed the past few years and are in rough financial shape.

Our HOA management company didn't even bring up the idea of a special assessment when we were in our budget meeting. Maybe they knew just how unpopular it would be.

What's the special assessment paying for?

agdaddy04 said:

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What's the special assessment paying for?

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Upper/Lower Balconies & Enclaves $192,600
Metal Stairs/Railings $28,800
Remainder Chimneys $40,560
Meter Boxes $6,600
New Irrigation System $ 92,800
Total Estimated Cost $361,360

Its all cosmetic related, except for possibly the irrigation system, there might be actual problems with it.

Maybe the California dude wants to own one more; yours!

That would explain the compressed payback schedule

Most of the responses here are accurate. The biggest thing is that it all depends on what your governing documents say. As some have mentioned, some neighborhoods have a cap that the Board can only increase X% without a vote of the homeowners, some neighborhoods (like ours) don't have a cap.

One thing you need to keep in mind as you continue to investigate - condos are governed by different laws than single family HOAs. So just because there's a law in place that a prevents "normal" HOAs from doing something, that doesn't necessarily extend to condo associations.

I'm fairly certain the investor that owns over half the complex won't be restricted in his voting rights, but I'm not positive on it. In our complex, an investment group used to own over half the units. They elected Board members that refused to raise rates. Now we're having to make huge increases to try and play catch-up with all the deferred maintenance that wasn't done because they wanted to keep monthly fees low.