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Old 07-16-2014, 04:40 PM
 
790 posts, read 866,962 times
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Was looking at a couple townhouses in a few areas and in one neighborhood, the HOA fees were for $125/month and across town another was $350/month, and as far as I can tell, its almost the same exact type of neighborhood with the same builder and same exact townhouses. Can anyone explain why this happens? Is it poor management? Natural disaster like a sinkhole that needed repair? If I buy in one of the higher monthly HOA neighborhoods can I ever hope to bring this payment down? Same with condos. All insights are welcome.
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Old 07-16-2014, 04:56 PM
 
Location: Columbia SC
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It usually depends on what you get for your dues. Some include things like lawn care, pools, insurance, water, sewage, private streets, gated neighborhood, etc. Some include next to nothing.

Example. Two identical, two story buildings. One has an elevator. One does not. This could easily mean several thousand dollars a year difference in the overhead cost between the two buildings.

Often a builder/developer may keep dues artificially low to make it more attractive to buyers. They bury actual costs or absorb them.

Ask to see a copy of the budget, cost explanations, etc. Look for Reserves which is money set aside for future needs like a pool reline, roofing, etc.
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Old 07-16-2014, 06:50 PM
 
Location: Texas
1,029 posts, read 1,056,906 times
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Is one neighborhood newer than the other? Our neighborhood is still being built, and dues are quite high. Once all the homes are sold and a decent reserve has been built up, the dues will probably go down.
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Old 07-16-2014, 07:03 PM
 
Location: Florida -
7,471 posts, read 8,721,375 times
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HOA's are not independent, profit-making entities, but, are comprised of owners who establish a budget based on HOA expenses. If you are an owner, you are certainly entitled to a copy of the current budget and expenditures. If you are a potential buyer, you probably only need to ask what services/amenities are paid for by HOA dues.

A potential exception to this (at least in condominiums), is when a large number of owners are delinquent in paying their HOA dues. In that case, the other members of the HOA will be required to make-up the delinquency and/or services will have to be cut.
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Old 07-16-2014, 07:05 PM
 
Location: Columbia SC
6,869 posts, read 5,414,345 times
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Quote:
Originally Posted by Aggiebuttercup View Post
Is one neighborhood newer than the other? Our neighborhood is still being built, and dues are quite high. Once all the homes are sold and a decent reserve has been built up, the dues will probably go down.
Aggie

Sorry, but do not bet on dues going down. Typically while being built out the developer can keep dues low as they have workers/crews. etc. on site. The developer is also absorbing costs as part of their sales/marketing costs. Those cost absorptions go away once most units are sold. Once turned over to owners and people/contractors have to be hired, the developers absorptions cost are gone, the need to build a reserve arises, etc. the costs generally rise.

Expect a dues increase once the owners are in control.
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Old 07-16-2014, 07:07 PM
 
Location: Philaburbia
29,894 posts, read 53,448,943 times
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Quote:
Originally Posted by The b8nk View Post
Can anyone explain why this happens?
In some instances, the HOA fees may be overly high in order to keep out the riffraff.
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Old 07-16-2014, 09:35 PM
 
Location: Barrington
37,023 posts, read 28,182,831 times
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It is impossible to reasonably compare and contrast assessments between associations without going deep into the weeds.

I want to know what percentage the reserves are funded. If no one knows, well then it's a special assessment waiting to happen.

The closer reserves are to being 100% funded, the less likely there will be a special assessment.

Board members are volunteer owners who have a fiduciary responsibility to act in the best interests of the association, not their own or that of their neighbors. I have a friend who owns 2 units in a Florida condo. The balconies are condemned. The association does not have a dime set aside to replace them. Decades of boards and owners preferred to pretend they would last forever .

If replacement of the balconies had been anticipated 50 years ago, the monthly amount would have been negligible. Instead, decades of owners ignored the balconies and the current owners are left holding the bag. Either the balconies start falling off or they bite the bullet, get a loan and impose a Special Assessment on all owners.

Asumes three identical but separate condos, with balconies.

Condo #1 anticipated the need to replace their balconies from inception, 50 years ago, and have the cash on hand to do so.

Condo #2 realized that nothing lasts forever and so about 20 years ago began reserving for replacement.

Condo #3 ignored the need to anticipate replacement and now must get a loan to pay for it and impose a Special Assessment on all owners.

Condo #3 likely had the cheapest assessments for 5 decades and now the current owners will incur the serious financial consequences.
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Old 07-16-2014, 09:37 PM
 
Location: Barrington
37,023 posts, read 28,182,831 times
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Quote:
Originally Posted by Ohiogirl81 View Post
In some instances, the HOA fees may be overly high in order to keep out the riffraff.
Oh, that's silly.
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Old 07-17-2014, 08:03 AM
 
272 posts, read 290,930 times
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I was on the HOA board when I had my townhouse. We had significant reserves and looked for ways to cut costs but keep services high. My last year there we actually built a new playground and an off leash dog park on our property.

We had a very similar town home community next to us. They were going bankrupt and might not be able to open the pool next year. BTW, our dues were the same. Be sure to get the budget BEFORE you buy...
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Old 07-17-2014, 08:56 AM
 
Location: Phoenix, AZ > Raleigh, NC
13,097 posts, read 15,301,313 times
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Quote:
Originally Posted by Aggiebuttercup View Post
Is one neighborhood newer than the other? Our neighborhood is still being built, and dues are quite high. Once all the homes are sold and a decent reserve has been built up, the dues will probably go down.
The sales agent for the builder told you that, right? : LOL
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