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I am in an HOA. We have a shared water system. It is considered common property of HOA and there is a water assessment that is assigned by the board for the cost of operating the well. There is a separate accrual account for capital projects.

I served on the board and saw at least 10 purchase agreements and a tap fee was not mentioned.

Initially there was no water system. After the initial build out it was discovered permitting individual wells was going to be difficult. By the time you honored size / spacing on septic and the well there was not much room for a house.

The builder put in a well and ran a water line. Again it is common property of the HOA. Some lots were already sold so he could not just add to the selling price. Builder imposed a tap fee of $1000 paid to him personally. I have been through the CCR and bylaws and there is nothing about a tap fee. I have seen no document that mentions a tap fee.

Can the builder legally enforce this tap fee paid directly to him?

It is not worth fighting over $1000 fee but I was curious. What if he changed that number to be $10,000. He has first ROR. He could exercise it then waive the tap fee on himself.

The plot thickens. The title company is enforcing a tap fee must be collected at closing. I asked where is a tap fee documented. They said we have an email from this individual.

Now the HOA is saying we are not enforcing the tap fee only collecting. I told that is money laundering.

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  • The lack of interest in this question earned me the Tumbleweed badge.
    – paparazzo
    Jun 22, 2018 at 16:18
  • What country and/or state is the HOA located in? Does the builder still control the HOA?
    – ohwilleke
    Jun 26, 2018 at 2:54
  • @ohwilleke USA TX. Builder lives there and has served on the board but as an elected position.
    – paparazzo
    Jun 26, 2018 at 4:36
  • 1
    I somehow never noticed the question before now, perhaps contributing to the "low views."
    – phoog
    Jun 27, 2018 at 4:23
  • @phoog There's a bounty on it now.
    – mark b
    Jul 23, 2019 at 16:11

1 Answer 1

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You won't see it in the CCRs, Bylaws, etc.. since it wasn't implemented and part of the original plans of the association. The builder is just a homeowner now right? If so then they have no extra rights than other homeowners (unless Bylaws say different?)

Anyways, you definitely should question it; homeowner (builder) should have been treated as a vendor, but also any capital expenditures or new assets of the association might need a vote of the HOA members.

Unless the builder/homeowner had a vendor contract with the association on that fee then most likely no they cannot enforce it; it seems what you do suggest is they are asking for a voluntary donation towards the expense of putting one in.

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