Can I be forced to pay HOA dues that were not in place when I purchased my property?

Full question:

In 1991 I purchased a newly built home in a very rural area of New Mexico which had been titled Thunder Mountain Estates. It was the only home at that time. There was a 'property Owner's Association', but I had the only home. Any dues was strictly voluntary. I told the developer (who was the builder of the home I bought and also the 'President' of the 'Property Owner's Association) at the time that I did not intend to pay dues. He shrugged and said 'so be it'. The area grew and eventually I began getting a bill for dues. I never paid and nobody ever said anything or took any action. In July 2001 I got a letter from the Association stating that my property 'has been 'Grandfathered' from the Association assessment of dues, until such time as your property changes ownership.' Recently I have received a bill and the verbal remark that the 'Grandfather' status was revoked a few years ago. I am now being given a deadline by which I must pay this year's dues. Can they legally do that?

• Category: Real Property
• Subcategory: Homeowner's Association
• Date: 04/07/2025
• State: New Mexico

Answer:

Though we cannot give you legal advice, the following are some general comments on your situation.

As a preface, the Property Owners Association (POA) would have to sue you (and win) in order to make you pay. You could tell them the reasons you feel you are exempt from the dues, and say "so sue me," if they still demand that you pay. In court, you could present your defense and the judge would decide if you had to pay or not. The only problem with this is, the POA may not sue you immediately, rather letting dues and late fees, etc., pile up before finally suing you. You may be uncomfortable with these amounts "piling up" against you, so in that case you could sue the POA seeking a declaratory judgment that you do not owe dues. You would present the same evidence as you would if defending a lawsuit brought against you by the POA. You should obtain the advice of a local attorney prior to taking any action.

You have a good argument that you should not have to pay the dues.

First, when you moved to the location, dues were voluntary. If you have documentation of this (an original property owners association agreement) then that is a piece of evidence in your favor - the new POA should not be able to change the rules on you (provided the rules did not allow for a change in the status (voluntary/required) of the dues - in which case you are on thinner ice.)

Second, the original developer/builder (and POA President) agreed that you would pay no dues. If you went to court, you would want to have him testify that he told you this, and that dues were voluntary when you moved to the location. If he has died or cannot be found, the agreement you had at the beginning will have to suffice.

The July 2001 letter stating your property had been "grandfathered" from paying dues until the property changed hands is important as an acknowledgement by the POA that your property was never obligated to pay dues because your ownership pre-existed the modern dues requirement.

If it is true (which a court would have to ultimately determine) that per the original agreement under which you purchased the property you were not (and never could be - a key point you'll have to examine in the text of the document) required to pay dues, then the POA cannot "revoke" the "grandfathered" status of your property.

A problem you are faced with is that it is possibly more expensive to hire a local attorney for this matter than it is to go ahead and pay the dues. You might consider several alternatives, the main one being a letter to the current POA that convinces them to back off. This letter could be from the original developer/builder or from an attorney who you hire only to write a letter (limiting your costs).

1. Talk to the original developer/builder and get him to sign a letter you've prepared stating what you've told us, that under the original agreement dues were voluntary and he agreed you weren't required to pay dues AND CANNOT BE REQUIRED TO BY SUBSEQUENT POA's until the property changes hands. Attach a copy of your original agreement with the voluntary dues part highlighted, and give to the POA.

2. Get a local attorney to write you a letter summarizing your arguments for not paying, saying that you will win in court and seek attorney fees and costs from the POA if they try to sue you for the money.

3. If you still can't get the POA to leave you alone, then you many want to consider binding mediation/arbitration instead of court (it will cost a lot less, though you'll probably have to set up through an attorney - or seek out an attorney that does mediation/arbitration and get the POA to go along with it - it will save them money too.)