Residents at the Craig Ranch Community Association in McKinney have started to pressure the community’s homeowners’ association (HOA) board to change a “sleeper” fee that charges owners once they sell their homes.
The community was opened in 2000 and grew to roughly 2,200 acres, as first reported by Community Impact in 2017. Approximately 1,300 acres are for residential space. The area also has set aside acreage for medical, office, and retail space.
Homeowners who buy a house in the community must sign governing documents that outline rules and regulations of the HOA. The documents contain a section regarding association finances, including a community enhancement fee that charges homeowners who choose to sell their property.
John Palmer, vice president of the Craig Ranch Community Association, said the fee was “established at the inception of Craig Ranch to provide certain funds to keep our community differentiated, well-capitalized and relevant over time,” according to The Dallas Morning News.
The governing documents state that the seller must pay a fee of 0.25% on the first $300,000 of the house’s sale price, and 0.5% for any additional amount. For example, sellers of a $500,000 home would be required to pay $1,750 to the HOA.
Mike Danielson, a realtor with Keller Williams, said it is uncommon for an HOA to have this fee attached to the documents.
“The enhancement fee in Craig Ranch is totally separate from the normal transfer fees that HOAs charge when you sell your home,” said Danielson, per the DMN. “They end up being quite pricey in Craig Ranch with that additional cost. Mainly because it is dependent on the sale price of the home. It is definitely out of the norm of most HOAs in the area.”
Craig Ranch resident Dean Woodard said those who sign the governing papers may not always be aware of the fee.
“It’s a sleeper of a rule that people don’t really understand,” said Woodard, according to The DMN. “When you go to closing, like when I bought my house here, you get these documents the day you’re closing so you have really no opportunity to read these documents in advance.”
“All they tell you is, ‘These are standard HOA documents, it’s nothing to worry about,’ so you sign for it because they tell you it’s standard language; it’s OK,” Woodard claimed.
Danielson told the DMN there are 30 active listings in the neighborhood that range from $379,000 to $2.9 million, while sold listings ranged from $350,000 to $1 million.
Woodard said that prices for some houses have doubled since he first moved to the neighborhood almost a decade ago, and many people are just now taking exception to the fee.
“It’s becoming more apparent because the value of houses have gone up and now people are talking about it more,” Woodard told the DMN.
Woodard recently posted to the Nextdoor app and said each resident should “pressure your members on the HOA board to change it” because “they have the power.”