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Beyond a pre-specified annual increase (5% range is typical), HOA BOD's cannot simply increase monthly HOA fees without a majority vote of the membership.
You should have received a copy of the Condo Docs ... reflecting a formal change to the monthly HOA fee ... and it would have been your responsibility to read it.
[Note: RE Listings frequently misstate the amount of HOA fees -- Often because Realtors copy old Condo/Townhome listings from the same development ... and simply change the applicable data]. A disclaimer is invariably provided with the RE listing.
In my state an association board may increase assessments by any percentage. If the increase is > 15% a petition by homeowners can challenge it and put it to a homeowner vote. Laws vary state to state.
The OP intended on buying a co-op, shares in a corporation, not a condo.
There is no such thing as a typical increase in assessments. I live in a single family HOA and our annual assessment has not changed in 5 years and we have $2 million in reserves.
I do agree that assessments as reported in the MLS are frequently incorrect especially when the listing crosses the association's fiscal year end. Most agents do not track information like this or the sellers don't think to communicate updated information.
Ask your agent (and others as well) their opinion if the fees are high for comparable properties. Get opinions and a feel, but I suspect you already have an idea. See if the fees have ever dropped. Remember, your issues buying could be repeated when you go to sell.
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It is unrealistic to compare and contrast fees because no two associations are alike from a physical, financial or cultural basis.
Sellers failed to disclose. You can walk or negotiate.
I would be inclined to negotiate the seller eating some or all of the special assessment. If owners had been appropriately assessed for annual depreciation the co-op would have had the funds to take care of business without imposing a special assessment. In some associations , especially co-ops the owners seem to prefer a special assessment versus creating appropriate reserves for replacement/ major repairs.
You have nothing to lose given your back up plan to buy elsewhere.
If the seller won't play ball they will need to disclose the true assessment and special assessment going forward which might impact a future sale.
I have all the docs on the budgets, previous special assessments, etc. This is the first major one in about ten years. The building is historic and very well maintained. Its been featured in several books and has a great reputation in the city as being a nice place to live. Like most condo and co-ops in my area, it is an older building, so some of these things are to be expected. I was specifically interested in living in an older building for a variety of reasons, and have lived in them almost exclusively as an adult, so its not a shock to me that repairs might be needed. My issue was that it was not disclosed up front before I finalized financing.
The owner COULD have dropped the price due to the knowledge of the special assessment repairs, but in my area that would have needed to be disclosed. There is even a clause in the contract that states such. As far as the monthly fees, they were voted in on November 26th. The place was listed on December 2. The fees were accurate on December 2, but information about the January increase was distributed to everyone who lived in the building. My offer came in before the fees were changed.
given the timing it is quite possible the sellers were not aware of the increase at the time of contract.
I bought my condo because the HOA had two million in RESERVES.
I would NOT be paying any 12K assessment because the community underfunded their reserves which illustrates they have not been taking their maintenance issues seriously in the past. Or funding properly.
Quote:
Originally Posted by confusedasusual
All things considered, this is still a okay deal. I decided to go ahead after crunching numbers for several days and viewing a few more properties.
Congrats. That portion of your assessment that covers taxes is likely deductible.
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