Tag Archives: taxes

Tax Time

Assocations must file!

Tax Time   While the end of the year traditionally means a congested calendar and a lengthy to-do list for most people, Associations also face another important year-end activity:  preparing to file federal – and, in some cases, state-tax forms.

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Federal Housing Finance Agency Publishes Rule Regarding Capital Contributions, Membership Fees, Flip Taxes, Transfer Fees, etc.

 

The Federal Housing Finance Agency (“FHFA”) recently published a Notice of Proposed Rulemaking  directing Fannie Mae, Freddie Mac and the Federal Home Loan Bank System to regulate transfer fees paid to community associations. While the revised FHFA draft will allow community associations to continue to use deed-based transfer fees (i.e., capital contributions, membership fees, flip taxes, etc.) to fund association operations, the rule would still allow  FHFA to limit how associations use the funding raised by such fees. FHFA’s rule would ban transfer fees paid to investors, but will allow transfer fees payable to a community association. This would apply to investors only prospectively, which should mean that any existing transfer fee paid to an investor or used by an association or any purpose is still valid and enforceable.

 

Per the rule, community associations could use revenue raised by new transfer fees for very narrow purposes, and would be regulated

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What happens to HOA when developer folds?

By Mike Huntermike_hunter

Attorney Michael Hunter specializes in community and condominium association law for the firm of Horack Talley

Question: We live in a condo subdivision planned for 56 units. The developer has fallen into financial difficulty and has only sold six units. There are now 16 completed units. The developer is renting the remaining 10 units. Even though the six homeowners are paying $155 monthly as association dues, the developer is not providing home maintenance. What legal recourse do we have? What would happen to our property if the developer declares bankruptcy or if all of the unsold property goes into foreclosure? Would the HOA, which only consists of six owners, be responsible for paying the mortgage on the clubhouse? Would we be responsible for paying property taxes on the unsold homes?

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