Can a property owner's association revoke my grandfathered status for dues?

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 Recently I have received a bill and the verbal remark that the 'Grandfather' status was revoked a few years ago.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:

While I cannot provide legal advice, I can share some general thoughts on your situation. The Property Owners Association (POA) would need to sue you and win to enforce payment of dues. You could assert your reasons for being exempt from dues and respond, "so sue me," if they continue to demand payment. In court, you could present your defense, and a judge would decide the matter. However, the POA might not act immediately, allowing dues and late fees to accumulate before pursuing legal action. If you're uncomfortable with this accumulation, you could consider suing the POA for a declaratory judgment, asserting that you do not owe dues. This would involve presenting the same evidence you would use in a defense against a lawsuit from the POA. Consulting a local attorney before taking any action is advisable.

You have a strong argument against paying the dues. Initially, dues were voluntary when you moved in. If you have documentation supporting this (like the original property owners association agreement), it strengthens your case. The new POA should not change the rules retroactively unless the original agreement allowed for such changes. Additionally, the original developer and POA President agreed that you would not pay dues. If he can testify to this, it would bolster your position. If he is unavailable, your initial agreement may still hold weight.

The July 2001 letter confirming your property was "grandfathered" from dues until ownership changed is crucial. It acknowledges that your property was not obligated to pay dues because you owned it before the current dues requirement. If the original agreement states you are not required to pay dues, the POA likely cannot revoke your "grandfathered" status.

A potential challenge is that hiring a local attorney might be more expensive than simply paying the dues. You might consider a few alternatives:

1. Contact the original developer to sign a letter confirming your understanding that dues were voluntary and that subsequent POAs cannot require payment until ownership changes. Attach a copy of your original agreement highlighting the voluntary dues.
2. Hire a local attorney to draft a letter summarizing your arguments against payment, indicating you would seek attorney fees and costs if the POA attempts to sue.
3. If the POA persists, consider binding mediation or arbitration instead of court, as it may be less costly. You would likely need an attorney to facilitate this process.