-This is a transcript from Go Gaddis Radio to listen to the episode click here-> https://on.soundcloud.com/FrkCy
Welcome back to Go Gaddis Real Estate Radio right here on AM 920 The Answer. I'm Cleve Gaddis and I certainly appreciate you. Sticking with us through the break, remember, I don't think everybody that gives you information about buying or selling houses is misleading you, but I do think that regardless of what somebody tells you about buying or selling a home, that it is your real estate agent's obligation to help you verify whether or not that is true.
My goal is for you to purchase a home. And not learn anything at closing or after that you should have learned before and the way we do that is we research and research and research and dig and dig and dig and we want to bring you the best guest we possibly can. And I'll tell you the one we have on for this segment is Michael Crew and he is one of my favorite.
Michael, you and I have been kindred spirits I think since the day we met. I was working on behalf of homeowners associations and you were working on behalf of. Homeowner Management Services, which manages homeowner associations, and I said to you, Michael, uh, can you help, because I ran an association of associations, and I was a volunteer, and I'm like, nobody knows what, they don't know anything, they don't know what to do, they don't know how HOAs work.
Would you come help us when you get, would you give us some education, and I will tell you, Michael Crew, that you are my go to source, uh, in the country for HOA information. Thank you and welcome. Well, thank you so much, Cleve. I'm not sure I, uh, I'm not sure all of that praise is justified, but, uh, I do try to help.
It's always been one of my tenets is education for, for homeowners. Well, let me, let me, uh, clarify that. So, um, uh, you've never told me something that turned out not to be the case, and even if you knew I didn't want to hear it, You still told me what the reality was. Now you gave me the opportunity to go independently verify or whatever it is.
And so if you live, if you're listening to the show and you live in Metro Atlanta or anywhere else in the country and you live in a non HOA or an HOA neighborhood, you probably want to pay attention to this particular segment. Michael, if somebody wants to reach you, the name of your company is Homeowner Management Services.
I believe they can just go online and fill out a request. How would they do that? If If somebody's listening thinking, I'd rather have another company managing our HOA, maybe they could reach out to you. Well, they can go to the web and type in homeowner management services in Google with some quote marks around it because those are keywords that all my competitors use, by the way.
Oh, they do. So, so if you're searching homeowner, you're saying, you're saying literally put in quotation mark. Yeah. Okay. So it searches that entire phrase. You can search for HMS, which are our company's initials, and that'll get you our company and about 500 British battleships, by the way. Okay. Okay.
They're all out there. Her Majesty. Oh, yes. Her Majesty. Yes, yes, yes. Oh, that's funny. We've never talked about that before. Yeah. So, uh, uh, they can call our office, uh, 770 667 0595 and, uh, leave a message for me or ask for, uh, one of our management team and someone to be glad to help them out. Perfect. Perfect.
Perfect. So, in Georgia, I understand that there are three different types of homeowners associations. This doesn't need to be an in depth discussion, but can you give us the three different types, please? Thanks. Yeah, in a nutshell, there are, uh, condominium owners associations, C O A, C O A, and every condominium belongs to that class, that's, uh, legislative.
State law. Right. Then there's, uh, property owners associations, which are a special type of homeowners association that is subject to a law that the state legislature passed. Okay. And in the associations covenants, it will say. This association is a property owners association subject to statute, blah, blah, blah, blah, blah.
Okay. And did that, did those start, excuse me for interrupting. Did those start, did that start at a certain time? The property owners association? Yeah, it was about, uh, 97 maybe. Okay. Got it. Got it. Okay. Uh, and then, and then there's, uh, uh, there's what most of us call regular homeowners association or plain old homeowners association, which are HOAs.
And the thing that makes them different is they are not subject to that state law, the provisions of that state law that we just mentioned. Don't apply to HOAs. Got it. So condo... That's the three types. So condominium associations, uh, always have to be condos. And they're different because in that case, the association owns most of the common elements and walls and stuff like that.
Owns all the common elements. Yeah. So, uh, yeah, thank you for... It is true. Um, and so it's a very different thing. And then property owners associations... What is the distinguishing difference, the main difference that a homeowner needs to be aware of in a property owners association and a homeowners association?
In a property owners association, the members of the association and the board of directors, okay, are subject to the provisions of this state law called the Property Owners Association Act. Okay. And it lays out some very specific things like how many people have to attend to have a quorum and how long is the notice for a, for an annual meeting.
And, uh, uh, how much can the late fees be and how much can interest be for delinquents? Those things are spelled out in the law, where with regular HOAs, those provisions are written into the covenants and God only knows what they say. Well, so it's interesting. So, I mean, if you live now, not that everybody wants to be subject to a homeowners association or a property owners association, but if you lived in one, a property owners association, at least there would be standardization as to what you would be dealing with because the, the board cannot make it up, you know, on the fly.
Yeah. There's more structure. Yeah. That's one thing in a property association. But another thing that's really important is that property owners associations are Sort of insulated from the whims of the legal system. And the example that I would give you is that there was a court case a few years ago, uh, where the court decided that the wording that was used to describe delinquent interest charges was not valid.
And so they invalidated that language. Well, that language was in like half of all the covenants that have ever been written in Atlanta. So, all of those associations, the language that they used for late fees was wiped out. And when we went to our clients, they said, so they couldn't charge late fees. You can't charge late fees anymore.
They were mad. Well, of course they were. It's like, go blame the court. Yeah. That's not my fault. Yeah. But if you were a P O A, you wouldn't have had that problem. 'cause the language is in the state law, meaning you're just following the law. Let me ask you, you follow. When you sell a property and it's in an HOA, then you have to reach out to the HOA to confirm whether or not you owe them anything.
So you make sure your account is all settled up at closing. But with a property owner's association, there's a little more power for the association itself when it comes to collecting those because of the law. Am I right or am I mistaken? Yeah, you're right. Uh, it's, it's, it's really beneficial to the association itself.
The fundamental difference is this. In an HOA, when a homeowner is delinquent, the association has to hire an attorney and file a lien against their property if they want to protect themselves, okay, against a sale when there's money outstanding. They gotta do something. They've gotta take action. Most people don't realize that.
You can sell your house even though you owe money to the association. It creates a big legal mess for everybody standing around. And the title insurance company, when they figure it out, they're not very pleased with themselves. They're not very pleased. And it's because they screwed up, but nonetheless, that's the case.
In a POA, in a property owners association, the law says that the, that the, maybe I shouldn't phrase it like that, the law causes the buyer, the mortgage company, to come to the association and ask Whether there's any outstanding fees and get a release letter from typically the association or the management company get a release letter So it almost it almost sounds like a POA.
It is assumed that you do. Oh until you prove otherwise and I know I'm just given the real turf version of that along the lines of You have to have something in your hand that says the POA says you don't owe any money. Yeah And here's your get out of jail free card. Yeah. Yep. Yep. Exactly. Exactly Okay, real quickly and we've we've hardly used nine minutes of the segment.
I love it our conversations No, our my conversations with you are always so interesting and I can keep you on for hours and hours I have purchased a home in a subdivision. It has a mandatory homeowners association. It is a homeowners association, not a property owners association, and I don't want to join.
Now, I'm just giving you this as an example. That's not the way I was. I am actively involved in my homeowners association. I went to the first board meeting. Trust me, after six months or nine months, they're going to wish I had never started coming because almost everything they said does not make any sense.
And they're going to get tired of me pointing it out to them, or at least I didn't think so. But can I refuse to join an HOA when it's mandatory for the neighborhood? It's too bad your listeners can't see my expression on the radio because I am laughing. I am cracking up right now. The fact of the matter is, no, you can't.
You, the, the, the membership, the, the, being a member of an association is defined. When the covenants are originally recorded against the land before anything is built on it. Yeah. Okay. And, and that follows, that's part of the chain of title and it follows the land for as long as the association exists, which for most associations is into perpetuity.
So no, you can't get out of it. There's no escaping it. There's been umpteen court cases where people have tried to say, well, my association isn't doing what they're supposed to do. I don't like the way they're doing it and I'm not going to pay and all that. I mean, that's like hitting a police officer.
You can't win. Not going to work. There's no excuse for it. Not going to work. Not going to work. So, I, I, I get that and um, hey, you're, you're a member even if you're not paying your dues and if you want to see what happens, then try to sell your house and see what percentage of all the dues you owe they collect.
Real quickly. It will only end badly for you if you're delinquent. We've only got about a minute left. I moved into a new townhome community, small townhome community, not too far from where you live. Michael, and I want to make some landscaping changes in the front. I want to make landscaping changes in the back.
I have to get a little plan presented to the architectural review committee. I'm totally fine with doing that, but let's just say I didn't want to do it. I wanted to do whatever I wanted to, uh, how could the HOA make me, and I'm going to do what I need to do, but how could they make me do other than what I wanted to do?
Yeah, they, most of the time in town homes, the land that's, uh, directly, uh, In front of or in the rear of a townhome, uh, belongs to the association. It's not really the townhome owner's land. The townhome owner only owns the building part, not the land part. And so, I need their permission to make changes to their land.
Michael, I am so sorry. We are totally out of time and we're at a hard stop here. We're gonna take a quick break. I'll have you back really soon in our next segment. We've got a cure for loneliness. So, if you're listening... And you're lonely, you need to stay tuned. And, what are gift funds and how might they help you buy your next home?
Stick with us. We'll be back.