HOA lowering monthly fee--probably cause? (approved, state, company, homes)
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I am the Treasurer in a single family HOA. Our declaration requires us to obtain a super majority in favor of increasing the annual assessment by more than 5% over the prior year. A recent state law trumps our declaration/bylaws and allows HOA boards to increase the annual assessment by up to 15% over the prior year and homeowners have no legal grounds to challenge it. ( We have no intention of doing so).
As a prospective buyer, you have a right to information and most certainly the right to know why the assessment declined. I would not assume the seller knows and it may be necessary to contact the president or treasurer or management company, if there is one. There can be many reasons for a decrease so it's not even worth speculating.
This old thread popped up as a recommendation. At the last place I lived, I was on the board starting in the beginning with turnover from the developer.
After the first 18 months or so when things had settled in and we had a completed reserve study and gone through a budget cycle, we realized that the developer had set the dues high enough to fully fund the reserves ahead of normal schedule, put aside some money for extra landscaping upgrades and also perform the regular maintenance and still some would be left over, so we reduced our dues. Seemed like the right thing to do as its the homeowners money after all (and board members are of course homeowners too).
After about 3 more years, we did need to raise the rates some as costs went up, but even with a small bump (seems like it was $15 a quarter maybe) the dues still ended up less than they started by $50-$60 a year. I guess we could have held onto that money all along, but again, it just seemed right to let the homeowners keep it.
It does not have to be anything nefarious if the dues go down or up, but staying involved is the best way to make sure.
Too many discussions of HOA dues occur in a vacuum. The amount of the dues (fees) cannot be considered except in relation to issues like the size of the reserves, the age of the units, the state of maintenance (up-to-date or lots of things back-burnered?), the existence or non-existence of a pool, and so forth. If dues are nice and low, but so are the reserves, that is a red flag because it means a big assessment sooner or later. If expenses have been low because maintenance is being deferred that is another red flag - the longer you defer exterior painting, for example, the more wood rot will have to be repaired. A pool is a big expense, so expect dues to be higher with a pool (other things being equal, which they aren't). Age of the units is important; a brand-new complex can go a number of years with very low maintenance costs - there will be no re-roofing or re-painting for a while.
I see this is an old post, but for anyone else with this question, my dues have gone down several times. They were set high to begin with, and once we had a few years in place to know what expenses ended up being, they adjusted down. A few years later, they adjusted down again because our reserve was high, and then back up slightly as things settle out. So mine went from $250 to begin with, all the way down to $100, and now are $150/year. Nothing ominous about it.
As an HOA President, our board recognized that the money belonged to the owners, not the association ... and it was our job to be the best stewards we could of other people's money. Twice, we found opportunities to reduce the HOA fee (once due to an insurance refund, and another when, after a period of making-up for delinquent HOA fees from pending forclosure units ... with added HOA fees on others ... banks compensated us for delinquent fees.) ---- As a result, we gained a high degree of trust among the members who realized that we were all on the same team ... and not simply a 'mean old HOA' who did little but increase fees and assessments.
[Wouldn't it be nice if our 'government HOA' did the same?]
If the HOA continues to slash the prices & wrote it into a contract that its fee will stay low or waived Most likely not) for this property "infinitely"... I would not look into it even if for a rental property.
Most community properties like condos, town homes, even McMansions (not the private mansions on 5-10 or more acres that Tigerwood resided in) = max packed people into the sq ft...
Mostly good for renting / rental property IMO.
As an HOA President, our board recognized that the money belonged to the owners, not the association ... and it was our job to be the best stewards we could of other people's money. Twice, we found opportunities to reduce the HOA fee (once due to an insurance refund, and another when, after a period of making-up for delinquent HOA fees from pending forclosure units ... with added HOA fees on others ... banks compensated us for delinquent fees.) ---- As a result, we gained a high degree of trust among the members who realized that we were all on the same team ... and not simply a 'mean old HOA' who did little but increase fees and assessments.
[Wouldn't it be nice if our 'government HOA' did the same?]
Especially on the highlighted...
Would definitely be "ideally" almost heaven.
Only then would homes be worth considering if they are built upon that government HOA that works ONLY "for its people" & not back pocketchange themselves... totally angelic-like hence very un-human-like trait for "greed" & selfishness... & won't ever be "corrupted" by anyone or anything.
Would be most perfect indeed.
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