Land lease verses owning the land. (Smyrna: school district, to live, costs)

[rdlr]

Summering,
Bear Trap Dunes is in Fee Simple, no land lease. Prices have come down in there, since the market changed. That place is so close to the ocean, and there's that jitney, we talked about. Some of those buildings have 4 condo units in them, for about $300,000 - $350,000. Some of the townhouses are selling for $515,000, owning the land. The single families are in the $600,000-$700,000 range. The club house is magnificent, the best I've seen in the state! And, then, the golf course is available to all the residents. I love working down there!

[rdlr]

Originally Posted by rockky

Pot Nets is the poster child for this practice. 'Course the lovely Baywood, with its fine club house, was built with funds from unsuspecting home owners. Perhaps those who are able to afford luxury living don't want to know from where all their surrounding beauty arose.

Speaking of Bay Wood, Roc, I was working down there and a couple homeowners didn't know they were living in modulars (Beracah Homes) and one didn't know they didn't own the land. They thought that was just a homeowners association fee they've been paying, for the use of the common elements.

I retrieve recorded documents on PUDS, when the homeowner tells me that ....."Yes, there's supposed to be a Homeowners Association, but I doubt if it will happen"....Who do they think is going to maintain the pool, clubhouse, open space, streets, and pretty flowers at the entrance, when the builder is gone? It's all recorded at the County Buildings, for each to research on their own. It's amazing to me.

[elizamary]

Originally Posted by CMTAD

OK, so it's the HOA activities (mowing, snow, etc) without having some of the residents actually sitting on a Home Owners Association board.

Thanks.

Charley

Yes Charley..........no residents sitting on a HOA board.
Oh and BTW.....Can you believe this topic is such a hot topic and I started it back in July. LOL!!

[Charley]

Originally Posted by elizamary

Yes Charley..........no residents sitting on a HOA board. Oh and BTW.....Can you believe this topic is such a hot topic and I started it back in July. LOL!!

I certainly do understand the emotions involved and I personally am continuously weighing the benefits and the pitfalls of land lease as part of the overall decision. I have no idea which way we'll go when the time comes.

I know HOW we'll make that decision. For the homes we decide that we like, we will use a point system that I developed that takes into account all of the various things we are looking for in a home. It has 24 criteria and rates everything from price, to square footage, to amenities, to whether it's fee simple or land lease, to location, to proximity to medical services to much more. Being a "numbers guy", I always find that helpful. It might not choose the final house, but it will narrow the choices down to the top few.

For all I know, if Roesville (fee simple) ever opens in Frederica, that could beat all the other contenders and make the decision easy. As long as I have the gift of time, I can continue to research, review and watch it all.

Charley

[rockky]

It amazes me as well, Delly.

I suspect that when folks move into DE from outside the state, they just assume that they are protected as happens in most states. Not in DE. There may be a contract set up between the developer and the buyers, but I don't think there is anything within DE state laws that protect the buyer by law...other than enforcing the existing contract....if there is one. Do you know of any state enforced legalities protecting land leased homes? I know it's been tossed around, but may have ended up in a draw with other legislation.

I was surprised to find that there is no regulation in DE for buyers of condos and other associations with POA/HOA. In PA there must be full disclosure signed by the buyer proving legally they have seen, are fully informed, and are aware of and rules/fee/regs, etc. I saw many new owners move into units and have not a clue what was expected. Fees were not paid. The reason..."we heard there was some sort of fee, but didn't know what it was or where to mail it."

Don't even get me started on the unit owners who rented out their properties! The renters put TV dishes on newly shingled roofs, lived as if they were not responsible to follow any association rules....they seemed to think they were in an apartment complex and Schneider the Super would show up with his cigarettes rolled up in his tee shirt and fix their broken storm door. Uh? There's no live-in maintenance person in most condo associations???!!!????

I will need to sell my condo in PA. The association has chosen to disallow any renters there. I'm not living in the unit. I'd rather rent and keep it, but that's life.

Sorry, I'm rambling. Again, DE needs legislation to protect some land lease owners from some unscrupulous, greedy developers. I don't understand what's the big deal. It's common sense. Drat those good ol' boys!

[rdlr]

Originally Posted by CMTAD

I know HOW we'll make that decision. For the homes we decide that we like, we will use a point system that I developed that takes into account all of the various things we are looking for in a home. It has 24 criteria and rates everything from price, to square footage, to amenities, to whether it's fee simple or land lease, to location, to proximity to medical services to much more. Being a "numbers guy", I always find that helpful. It might not choose the final house, but it will narrow the choices down to the top few.

Charley....The decision will be much easier for you, once you get closer to your 5 year goal of moving here. By that time so much can change, and you won't need your point system. Legislation may be passed to protect lot renters, and some of these subdivisions will either prosper, or developers will go out of business and completely abandon their subdivision, leaving a handful of homeowners to figure out what to do. That has happened in another area of Cheswold, near Noble's Pond. There will be real live cases of good stories, or hard luck stories, and if there are law suits, precedents will be set. So, time is in your favor!

[Summering]

Originally Posted by CMTAD

It will go to $800 per month. At a cap of 4.9%, the $800 level will be reached in just over fourteen years.

Well, Pots Nets went up in four years, from approx 400 per month to about 700 per month........that is in a Four Year time period. Plus other costs like water and sewer that have jumped up too.
The paperwork at closing gave a small percentage, but then there was a clause about "increases for land value"....that is what hit hard. IMO
Wow, in fourteen years. That is not a long time either.
So its a great thing Charley, that people know in fourteen years they will pay that higher fee. Some people buy with a blind eye to it.
You did your research and thats really great, so many don't.

[rdlr]

I've physically examined some leasehold documents at the County Building. Some say the Cap rate won't go up by X amount per year. At the bottom of the recorded document, it says: "Some conditions apply"
Caveat Emptor

[Charley]

Originally Posted by rockky

I suspect that when folks move into DE from outside the state, they just assume that they are protected as happens in most states. Not in DE. There may be a contract set up between the developer and the buyers, but I don't think there is anything within DE state laws that protect the buyer by law!

Although this message was not directed toward me, I am glad to share that for the owners of manufactured homes, there is "Chapter 70 of Title 25 of the Delaware Code, the Manufactured Homes Owners & Community Owners Act." which serves to protect the interests of the manufactured home owner in a land lease situation.

You can access it from the state attorney general's website at

http://attorneygeneral.delaware.gov/.../mobileact.pdf

Charley

[Charley]

Originally Posted by Summering

Well, Pots Nets went up in four years, from approx 400 per month to about 700 per month........that is in a Four Year time period. Plus other costs like water and sewer that have jumped up too.
The paperwork at closing gave a small percentage, but then there was a clause about "increases for land value"....that is what hit hard. IMO
Wow, in fourteen years. That is not a long time either. So its a great thing Charley, that people know in fourteen years they will pay that higher fee. Some people buy with a blind eye to it. You did your research and thats really great, so many don't.

Pots Nets has always been the clear example of what "not" to do (from the buyer point of view). Our first exposure to potential retirement in Delaware was Pots Nets and upon learning about the land lease issues there, we immediately turned away.

It wasn't until a colleague at the hospital retired and told me she was heading to Smyrna, and gave me all her back copies of Delaware Today that we were re-intrigued by the state. Once we started visiting each year, that was it for us.

Charley

P.S. Anyone who buys a home under any scenario and expects costs (HOA or land lease or just plain taxes) not to rise is probably not smart enough to own a home in the first place.