HOA question (sales, HOA fees, condo)

[The cow says moo.]

Oh great oracle of City-Data! I pose a question to you!

Say a subdivision is being built and the club house and ammenities go in nicely and a couple of blocks worth of homes get purchased and built and then - BLAMO! - the economy hits the crapper and no more people come to buy any more homes and now there are only 20 or 30 homeowners where there should have been 150 and there are big mounds of dirt and empty lots and the HOA was going to be supported by those 150 homes, what happends?

[Mike409]

Those 20 or 30 home owners HOA dues would go through the roof. If everyone is gone and no one else is building, then someone has to pay for upkeep of the amenities and grounds that are built.

I'm not an expert on the subject, so take that for what it's worth. It's just IMO

[BLUEDIAMOND64]

I tend to agree with Mike409. In another HOA, same situation and the existing homeowners are now responsible for all of the expenses.

[msm_teacher]

You need to look closer to the HOA covenants and by-laws to see who pays for what.

- Are there dues being paid on the unsold/unbuild lots?
- Who is responsible for the clubhouse and pool? In many neighborhoods that is completely separate.
- Are the final roads put in? Have they been turned over to the county for maintenance?
- What about the street lights? Who maintains those?

Until things build up to a certain point, many things cannot be turned over to the municipalities to take care of. You could be stuck for more than just the pool and weed covered lots. Depending on what the HOA papers say, you could be handed a bill for thousands to pay for roads, etc.

[MikeyKid]

Oh no MooCow... tread carefully.

I think I know what you're running into, though. Building exactly what you want is less expensive then resales offering less finish. It's one thing I'm watching closely - when I can't build something cheaper with significantly more finish then resales in the area I'll know that prices are about right. As of now, resales are still way inflated for what they offer.

[Mrs. P]

I read an article about this months ago. Said never purchase lots in these new subdivisions unless you know they are at least 50% sold. I also see a condo division not far from my son's home that was built 4 years ago, it's till only about 1/4th if that, full. I often wondered how much those people's HOA fees are. And though it's wonderful to build your own home, or have 1st pick of a new condo, it's a risk one has to take. Many times, the builder himself is responsible for maintaing the HOA for a certain amount of years/or sales. However, I have seen builders, who just stopped building and or never finished the pools, clubhouses etc.

[The cow says moo.]

I appreciate all your input!!! Not to fear - I am asking purely as a query.
My realtor brought us to a new construction neighborhood that we loved and there were only 7 lots left. But I was wondering how it work if the sales went the other way.

[chicagocubs]

Run away...run away. HOAs are the bane of society and the easy out for the city not doing what you pay taxes for. Think of it like this...it's yet ANOTHER tax that you have to pay to get the same services!

[etacarinae]

Originally Posted by chicagocubs

Run away...run away. HOAs are the bane of society and the easy out for the city not doing what you pay taxes for. Think of it like this...it's yet ANOTHER tax that you have to pay to get the same services!

A truly terrible tax!! It's like some sort of Imperial council.

[msm_teacher]

Originally Posted by The cow says moo.

I appreciate all your input!!! Not to fear - I am asking purely as a query.
My realtor brought us to a new construction neighborhood that we loved and there were only 7 lots left. But I was wondering how it work if the sales went the other way.

Even with most of the lots sold, I still suggest checking that the roads have been turned over to the city or county before you buy.