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Old 02-02-2012, 05:15 PM
 
14 posts, read 30,523 times
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I have read that some master-planned communities monopolize costs, such as propane fees. Are there features in communities that are best to avoid due to such issues? I did see a list specifically with regard to propane costs, but what other things can communities monopolize? What other costs should a home-buyer consider that are often overlooked?





Mod Note: In order to comply with City-Data's rules on consumer complaints, the two bold words were added to this post, which changed the topic slightly. Also, the thread title was edited to reflect the new focus.

Last edited by Bo; 02-03-2012 at 08:42 PM.. Reason: Per the TOS, this forum is not the right place for consumer complaints with specific businesses.
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Old 02-02-2012, 07:23 PM
 
Location: Avery Ranch, Austin, TX
8,977 posts, read 17,548,407 times
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Quote:
Originally Posted by PeggyFriend View Post
I have read that some master-planned communities monopolize costs, such as propane fees. Are there communities that are best to avoid due to such issues? I did see a list specifically with regard to propane costs, but what other things can communities monopolize? What other costs should a home-buyer consider that are often overlooked?

Of course, the monthly HOA dues would be one variable. Depending on the percentage build-out of the neighborhood, the fees could be considerable until more homes are sold. Even after the neighborhood is built out, the fees can vary widely depending on the amenities offered. Certainly worth considering if the cost far outweighs the benefits.
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Old 02-02-2012, 09:09 PM
 
254 posts, read 281,124 times
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I would confirm all utility providers before making an offer on a house, and avoid any neighborhoods with private utilities. The water provider Moderator cut: name deleted has been making a lot of news lately due to a 40% proposed rate hike on top of their already high very high rates.

Last edited by Bo; 02-03-2012 at 08:37 PM.. Reason: Per the TOS, this forum is not the right place for consumer complaints with specific businesses.
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Old 02-03-2012, 08:23 AM
 
Location: Great State of Texas
86,052 posts, read 84,464,288 times
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Quote:
Originally Posted by wildflower_FL View Post
I would confirm all utility providers before making an offer on a house, and avoid any neighborhoods with private utilities. The water provider Moderator cut: name deleted has been making a lot of news lately due to a 40% proposed rate hike on top of their already high very high rates.
Not all private utilities are bad and costly.
I've had Manville water for 15 years and their rates were lower than the city of Pflugerville.

Not all co-op electric companies are bad either. I've got Heart of Texas out in Milam county and we get a refund every year in the range of several hundred dollars.

So don't paint a broad brush regarding private utilities. You need to look into each one individually and see how they are operated.

Last edited by Bo; 02-03-2012 at 08:39 PM.. Reason: Updated quote to match original / Per the TOS, this forum is not the right place for consumer complaints w/specific business
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Old 02-03-2012, 09:27 AM
 
254 posts, read 281,124 times
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Let me rephrase that to I would avoid a neighborhood that is serviced by an investor-owned utility company that has a monopoly on the subdivision. The two utility companies cited in the above post are both non-profits. The posts regarding to the propane fees also tie back to having to deal with an investor-owned utility company. Until there is change in how Texas regulates investor-owned utilities, I think it would be very risky to purchase in such a subdivision.

Moderator cut: consumer complaint I'm not knowledgeable on home prices, but I suspect that the water rates are having a negative effect on those neighborhood's home sales. We sold our house for $140k about five years ago and the same house was listed for $110k last year.

Last edited by Bo; 02-03-2012 at 08:40 PM.. Reason: Per the TOS, this forum is not the right place for consumer complaints with specific businesses.
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Old 02-03-2012, 11:53 AM
 
3,438 posts, read 4,452,517 times
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Quote:
Originally Posted by PeggyFriend View Post
I have read that some master-planned communities monopolize costs, such as propane fees. Are there communities that are best to avoid due to such issues?
Yes. All of them. Buyers are not the intended beneficiaries of the "master plan".

Quote:
I did see a list specifically with regard to propane costs, but what other things can communities monopolize? What other costs should a home-buyer consider that are often overlooked?
Please do not confuse the "community" of people with the subdivision of land or the HOA corporation burdening the property. It's important to keep these things distinct to avoid confusion. The "community" of people is not "choosing" any of this.

Typically the developer attempts to impose these monopolies via restrictive covenant rather than through bona fide utility laws. The developer uses the HOA corporation to maintain the monopoly. The monopolies are unusual compared to typical monopolies in that the HOA is used both to 1) force consumption, and 2) dictate the vendor you must consume from. In addition, the HOA corporation is used to 3) threaten homeowners with foreclosure in order to maintain the monopolies.

Generally, the goods/services targeted by the developer and the HOA industry are economically de-regulated or poorly regulated goods and services. The theory of de-regulation is that consumers will have choice. However, in these cases the HOA corporation is used to prevent choice leaving the consumer hostage to an economically unregulated vendor.

Although other posters have identified co-ops as "private utilities" for the argument that not all private utilities are a concern, it should be pointed out that co-ops are by definition "member-owned". However, an involuntary co-op is not necessarily an improvement over a private investor-owned utility when the members have little say or control as to how the utility is operated - see, e.g., all the hoopla regarding the manner in which Pedernales Electric Co-op was run for 40+ years before the legislature started getting involved.

A subsequent poster identified the problem more succinctly as the investor-owned utilities (i.e., "IOU"). This is probably the trait one should focus on.

In terms of what goods/services you need to be on the lookout for as part of the "master plan", you could look the following:

• trash
• electricity (outside the city or area of the co-op)
• internet
• propane gas
• cable (developers in newer subdivisions are still incorporating prohibitions against satellite dishes or requiring prior approval despite prohibitions under federal law )
• security
• water
• telephone/telecom

In some cases the owner is given a "choice" to pay extra by continuing to pay the developer's designated vendor in addition to whomever the homeowner wants. Typically the HOA including "architectural committees" are the mechanisms used to enforce the monopoly under the pretext of "good for the community" and "property values". What they don't like to mention is that "community" doesn't include you and the term "property values" means value that can be extracted you and from your property for the benefit of the vendors.

You might not be able to tell immediately without ascertaining whether there are actually owners who have different providers for some of these goods/services in the same subdivision. In some cases you will have to look at the restrictive covenants for either a direct indication (e.g., mandated vendor/contract) or an indirect indication (e.g., requirement to install and use gas appliances). If it was such a good thing they wouldn't need to try to force you under threats of "fines" and foreclosure now would they?

Good luck. You are probably better off simply avoiding the "master planned" subdivisions to begin with. The management companies in these places also are trying to get into the business of forcing consumption from vendors that the management companies own or have financial affiliation with. It's a never-ending process of fending off the vendors and this problem is unique to HOA properties.
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Old 02-03-2012, 08:19 PM
 
Location: Round Rock, TX
426 posts, read 1,673,615 times
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Quote:
Originally Posted by KerrTown View Post
I thought Austin and San Antonio still have the municipal electric company?
Austin and SA proper, yes - but not a large part of suburban Austin.
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