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In Northern VA we have master HOAs that take over entire community sidewalks and streets, and some even take on additional infrastructure, such as Internet and cable. I review these budgets on a regular basis and there's a lot more under HOAs than you would think and the range is from just a tad bit more than a civic association to a small, self contained city. We have one out here that includes a lake, club house, all the streets, golf course, one school, and fire department - not to mention a dozen commercial enterprises all to support approximately 500 homes. Beware what you are buying into.....your lender sure is looking. They may not care for the terms should they become an owner.
In Northern VA we have master HOAs that take over entire community sidewalks and streets, and some even take on additional infrastructure, such as Internet and cable. I review these budgets on a regular basis and there's a lot more under HOAs than you would think and the range is from just a tad bit more than a civic association to a small, self contained city. We have one out here that includes a lake, club house, all the streets, golf course, one school, and fire department - not to mention a dozen commercial enterprises all to support approximately 500 homes. Beware what you are buying into.....your lender sure is looking. They may not care for the terms should they become an owner.
This is fascinating to me. And difficult for a lot of people to wrap their minds around.
I have so often told people about the relationship between lender and hoa provisions. I know someone who wants their section to secede from the hoa. Lender won't like that but they can't imagine that.
We used to live in Reston...entire city with a master hoa as you know.
I think he is referring to aging roads, sidewalks, sewer, water, clubhouse, pool, etc. An aging HOA has nothing to do with "your" home. A typical HOA is kinda like a mini town, with similar expenses.
Roads alone can cost $ millions.
Yes, maintenance is the key.
I have a dear friend that lives in a townhome complex that did not have proper exterior painting and roofing the years. Maintenance was performed by unlicensed or improperly trained contractors brought in by the HOA officers. Now, the siding and roof will need to be replaced and the cost looks to be well over a million dollars. The already pricey $500 HOA monthly fee will be going up by an additional $1000/month.
Their previous HOA board is now long gone but they have no recourse for the wrong-doing.
Better to buy a single-family home and take care of your own maintenance.
I actually lived in an HOA where one section of the HOA was not annexed properly according to the bylaws almost some 20+ years ago. The HOA got a bit too high and mighty with its warnings and it ticked off a few who heard they should dig. And dig they did. And found records that the annexation required a unanimous vote, which they never did and suddenly section1 of Occoquan Forest was no longer in a MANDATORY HOA, but now a civic association. But for over 20 years they (the HOA) fooled a lot of people.
Reston is monster with many smaller (and additional) associations.
LOL. Yep, good points all of them. If I want to buy a boat and park it in my yard to enjoy on weekends with my family, that is worth more then any home dollar value. Enjoyment of my home how I see fit is priceless.
HOA's are not for me.
You're darned right about that. Protection of property values is NO excuse to restrict the freedom of people who are otherwise doing nothing but minding their own business and living life in THEIR OWN SPACE as they see fit. To do this is to basically say that freedom is for sale. In the US of A such attitudes should appall people.
It would be one thing if they were polluting a river that flows out of their property into someone else's, had barking dogs that caused someone else to not be able to enjoy their own space peacefully, or engaged in activities that caused a humongous amount of traffic that does things such as parking in your yard when the neighbor's yard runs out of space. Those are things that actually affect your ability to enjoy your home. But junk cars, lawns that aren't a putting green, a house being painted pink rather than tan or off-white--even if such drags down other people's property values, to me, that sort of thing is NO ONE'S freaking business.
To put it in short, as I say--on my property, I AM the law. The color of my house, the height of my grass etc that is NO ONE ELSE'S business. It is MY property. That it's part of some larger neighborhood--I could give a turd less. When I'm in public then yes I have to care what others think--but this is my castle where I get to unload all of that and be MYSELF. Thus, in my castle, I could give a flying flip less what someone else thinks.
Seriously?.... I give you an example and you poop all over it? LOL. I just cant please you. The dues they were receiving did not cover the maintenance, that is why they needed a loan.
Every HOA is unique. They come in all shapes and sizes. A HOA doesn't need to be gated to be private roads. Most cities do not want more roads so they refuse to adopt the roads and they remain private. Depending on the state, most new neighborhoods would be private roads. You cant tell by looking at them if they are private or public roads. Its a legal designation.
This mega HOA is just like any typical HOA. People do not want to raise dues today, for something that will need replacement 20 or 30 years from now. Especially with retirement places like Florida where people will be dead in 10. When you can simply vote down a rise in dues, many people do.
I wasn't trying to poop on your example. Hawaii? Really? One of the most expensive places to live in US. HOA costs are probably enough but are most likely mismanaged. Few HOAs are managed right.
If the HOA budgeted right they wouldn't need a loan. And they could do the roads in sections or repair as needed. A new slurry coat saves a lot of money. Most people are not involved in what the HOA does. Most see the board as "they". How many members show up to the monthly HOA meeting? People like to sit back and complain about how evil the HOA is. Why the F did you buy in a HOA? It's not like you bought didn't know and all of the sudden the evil HOA reared up and threw CCR in your lap. You knew EXACTLY what you were signing up for when you bought the house. So either DONT buy in a HOA or shut up about how bad they are and do as the rules that you KNOWINGLY signed up for say. Or sell and move into a non HOA area where you can have a boat, paint your house whatever color you want and do as you please. I'm sure your neighbors will be ok with that
There are a lot of people who don't wanna deal with the maintenance, exterior and pool repair/service so they buy HOA property. They don't wanna deal with neighbors blasting music at 3am, junk cars and funky painted houses. Some don't need or want a huge yard 4000 sq ft hem to deal with.
Maintain property value for who?
• The property managers extorting money from the owners?
• The HOA attorneys making money by stirring up litigation?
• Other vendors utilized by the HOA?
• The board members who enjoy exercising control over other people and other peoples' property?
• The local government which gets tax dollars from you to spend on debt repayment for infrastructure and services elsewhere while not providing your area the same?
What does "property value" mean if you don't consider carrying costs or discount the property for loss of typical attributes of ownership?
Do any of these factor into your sense of value for the homeowner?
• Lack of use and enjoyment of the home
• Lack of ability to exclude others (particularly HOA and agents)
• Perpetual liens that can never be paid off
• Risk of loss through litigation
• Risk of loss through foreclosure
• Restraints against alienability (i.e., fees and restrictions on ability to sell)
• Risk of additional restrictions being imposed after purchase such that you cannot keep the property your purchased
• Being subjected to drive-bys from persons paid per letter to claim "violation" of a restrictive covenant or bylaw?
• Receipt of "notices of violation" threatening "fines" and ultimately foreclosure lest the homeowner do whatever the letter demands?
Have you asked your question of any homeowner who was divested of a home through foreclosure by the HOA? If you are asking whether the HOA preserved value for them, they'll probably tell you "no" it was a large economic loss.
Have you asked the question of any homeowner owning property in a subdivision where the HOA has foreclosed on homes? They'll probably tell you "no".
HOA-burdened housing is probably the bulk of the housing that "lost value" during the latest housing crash (and several before that). There is no evidence that HOAs "preserve value" for the homeowners. If you factor in carrying costs and place any value on the items set forth above you can expect a relative economic loss compared to non-HOA property if you expect to own and live there for any length of time.
This is what we found when my husband became a BOD member.
The management company and their lawyers write the management contract which the BOD rubber stamps. The homeowners have no legal representation. Next step is hire only contractors from the HOA food chain so homeowners are charged double and triple what a non-HOA service costs. The HOA can force you out of your home faster than a lender for non-payment of their demands so be sure you have lots of health insurance. Every year the streets are resurfaced and within a few days the new cracks begin to appear. Oh well, just bring back the HOA food chain and spend, for a large HOA, several hundred thousand dollars every summer. So, the only ones making money are the ones on the closed HOA food chain.
When people complain that they don't want to look at cars parked in their neighbor's yard, I have to wonder why they don't get their zoning laws changed. Some cities don't allow over night street parking without a special permit issued by the police. Instead of paying the HOA food chain, work with your own city and zoning to make it better for everyone.
I actually lived in an HOA where one section of the HOA was not annexed properly according to the bylaws almost some 20+ years ago. The HOA got a bit too high and mighty with its warnings and it ticked off a few who heard they should dig. And dig they did. And found records that the annexation required a unanimous vote, which they never did and suddenly section1 of Occoquan Forest was no longer in a MANDATORY HOA, but now a civic association. But for over 20 years they (the HOA) fooled a lot of people.
Reston is monster with many smaller (and additional) associations.
What happened when the annexation issue was found out? Was any money returned?
Yes, Reston has grown even since we left and it was big then. But with so much nature it didn't feel like a big overgrown city.
Our HOA has a contingency of folks who show up regularly to complain about neighbors who grow tomatoes in their front yards (what next - lima beans?), who don't rake their leaves, who put down gravel parking pads... the list is endless. Now this group wants to rewrite the rules to make them even more stringent. It's an ongoing nightmare. So much time sucked up with this petty business, all in the name of "maintaining property values."
Meanwhile, the amenities continue to deteriorate. Which is what people are evaluating when they decide whether the HOA fee and home is worth the price they will be paying.
One thing an HOA could offer people in this ever shifting world is a friendly neighborhood where people get together at the clubhouse, the pool, the park, the playground. Instead we have neighbors ranting and swearing at one another. It's a nightmare.
This year, several board members sold and moved out of our HOA. We're thinking of doing the same ourselves. It's only about 5% of the people, but it is constant nonsense.
In 2000 my wife and I looked at two near identical, new construction, single family homes in an HOA. One HOA in Lexington (Columbia) SC and one HOA in Mount Pleasant (Charleston) SC (120 miles apart). As I said new and near identical.
We bought in Mount Pleasant at $200K, it zoomed to $350K then fell back. We sold in 2010 for $280K. Today the places are at about $300K. The HOA looked as good or better when we sold as it did the day we moved in
In 2010 when we decide to move to the Lexington area, we drove through the original HOA. Simply put, overall it looked like crap. It was obvious they had let things get out of control. I still had the card from the real estate agent. Long story short he said bad economy and a BOD that did nothing. Some were selling for less then original prices. The better ones were selling for $215K. Today the prices there have increased $10K at the most.
These HOA's started out near identical. 120 miles apart, same state, and a similar economy.
The real estate agent and I blame it squarely on a BOD that was to soft. They let people pretty well do as they wanted to do.
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