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I don't know if this can go here or needs to go in the home section, but here it goes.
I am looking at homes/condos and I remember the nightmare my buddy went through with his HOA fees. With the HOA fee, is there a limit to the HOA increase they are allowed to do? My concern is several years down the road the cost goes up so dramatic that I can't afford it. An example would be my buddy's HOA was 2x the cost of his mortgage.
I'm done moving, I did it in my 20s, and I don't want to do it anymore.
I don't know if this can go here or needs to go in the home section, but here it goes.
I am looking at homes/condos and I remember the nightmare my buddy went through with his HOA fees. With the HOA fee, is there a limit to the HOA increase they are allowed to do? My concern is several years down the road the cost goes up so dramatic that I can't afford it. An example would be my buddy's HOA was 2x the cost of his mortgage.
I'm done moving, I did it in my 20s, and I don't want to do it anymore.
The CC&R's state the maximum amount of increase each year. Each one is different.
The increases are to account for the increasing costs of maintaining the common grounds and amenities. Some HOA's are more efficiently run than others. It all depends on the board members and the property managers; how pro active and efficient they are.
The best way to help keep the dues down is to become a board member, or at least attend meetings and ask questions, and volunteer to be on committees to assist your community. If money is being wasted by not getting good competitive bids for all the necessary vendors, then you can help make a difference.
As CB has already posted, ShipHead . . . GET INVOLVED.
Attending the HOA Meetings (rarely more than once a month, sometimes once a quarter or less) and/or becoming a Board Member is the best way to know and understand exactly what the fees cover and why the increases are necessary. Also, know exactly how pro-active the board is in collecting fees from the deadbeats.
There are many reasons the HOA Fees increase over the years and a few involved homeowners can make a difference.
Just to add to this subject, is there any guarantee a non-HOA area will stay non-HOA?
I would venture to say no, there is no guarantee. However, it would take a large percentage of a community to vote to start an HOA, plus hiring an attorney to deal with setting it up and possibly having it approved by the city. And first of all enough people would have to come up with the costs of getting an HOA set up, which could get fairly expensive.
I don't know if this can go here or needs to go in the home section, but here it goes.
I am looking at homes/condos and I remember the nightmare my buddy went through with his HOA fees. With the HOA fee, is there a limit to the HOA increase they are allowed to do? My concern is several years down the road the cost goes up so dramatic that I can't afford it. An example would be my buddy's HOA was 2x the cost of his mortgage.
I'm done moving, I did it in my 20s, and I don't want to do it anymore.
HOAs and condo corporations are tied to two very different types of regimes.
An HOA corporation often burdens homes on "lots" in a subdivision. The term "common area" is a marketing gimmick in HOA properties. There are no "common areas" - the HOA usually owns the amenities and any "open space" areas.
In contrast the "common areas" for condos are usually owned by all the members of the condo association in some undivided percentage amount. Individual members will own a "unit" and may have a common area of "limited exclusive use" associated with each unit (e.g., balcony, patio, yard, garage, etc.)
The term "condominium" might conjure up images of high-rise buildings (the "vertical regime" type), however, there are occasionally "horizontal regimes" consisting of individual site built condos that look like individual homes on lots. A visual inspection would not suggest they are condos. Instead of your own "lot", the unit is built on an area of limited exclusive use and the units are all collectively sitting on "common area" (you do not own a lot, nor the ground beneath your unit). These are being used to get around platting restrictions.
The vendor trade groups that make a living off of the homeowners in HOA and condo properties actually push and lobby for unlimited assessments. The vendors are in the business of making bucks from debt collection and debt creation. See, for example, policy #3 of Community Association Institute's "Public Policies":http://www.caionline.org/govt/policies/Pages/default.aspx (http://http//www.caionline.org/govt/policies/Pages/default.aspx - broken link) Creating financial hardships on the homeowners leads to collection, handling, and attorney fees for these organizations. You might want to see if the vendors have already been successful getting laws passed in your state that would allow the board to borrow without your consent or vote.
Even more troubling, this trade group is encouraging boards to borrow money - without any vote by owners. The vendors would prefer that terms (such as interest rate) and collateral (such as assignments of the assessments) - all be worked out without the owners' knowledge, consent, or input. Now think about that since your home is the security for any debt that the HOA incurs.
Although you might hear advice such as "run for the board" or "get on the board", such advice is usually of little use. In most states you do not have an absolute right to either vote or to run in an HOA or condo board election. The vendor trade groups have lobbied against such things. Look for any provision in the law, restrictive covenants, and bylaws that limits voting to "members in good standing" or candidates to those "approved by the board" or "in good standing". Such language allows unscrupulous management companies, HOA attorneys, and existing boards to retain control over the board of the HOA or condo for years.
If you are concerned about assessment increases, special assessments, and fees du jour then avoid condos altogether. If you can't avoid HOA-burdened property, then try to avoid those that do not have express limitations on assessment increases.
Last edited by IC_deLight; 03-06-2012 at 05:02 AM..
...An HOA corporation often burdens homes on "lots" in a subdivision. The term "common area" is a marketing gimmick in HOA properties. There are no "common areas" - the HOA usually owns the amenities and any "open space" areas.
It's correct that the HOA owns the grounds, parks, swimming pools, and other amenities within the community. However, to say that there are "no common areas" is not correct.
The HOA is the "Home Owners Association"; made up of each homeowner or vacant lot owner within that community, and organized as a non-profit corporation. Therefore, the term common area means the area that is commonly owned by each "member" of the Association. If there are 100 improved and vacant lots within the community, then each owner of that lot owns 1% of the common area.
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The vendor trade groups that make a living off of the homeowners in HOA and condo properties actually push and lobby for unlimited assessments.
Click on the thumbnail below to see that full policy. It is actually lobbying for the government to not interfere with the guidelines that HOA's already have in their CC&R's. They are not lobbying for unlimited assessments at all.
All the CC&R's have restrictions on the amount of assessments than can be increased; and can only be changed by around 80% of the voting members.
The board members know what it costs to maintain the association assets, and they should only be restricted as called for within their governing documents,or as modified by a vote of the members.
As to borrowing, it is still restricted in the CC&R's. If homeowners would read and understand their CC&R's, and attend meetings then they would have a greater voice in the operation of their community.
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Although you might hear advice such as "run for the board" or "get on the board", such advice is usually of little use. In most states you do not have an absolute right to either vote or to run in an HOA or condo board election. The vendor trade groups have lobbied against such things. Look for any provision in the law, restrictive covenants, and bylaws that limits voting to "members in good standing" or candidates to those "approved by the board" or "in good standing". Such language allows unscrupulous management companies, HOA attorneys, and existing boards to retain control over the board of the HOA or condo for years.
I bolded "members in good standing", because that means one who has not paid the dues for a certain amount of time. This is usually in all CC&R's, and I believe it's there for a good reason. If a member is not going to pay his/her dues, they are placing a heavier financial burden on the other homeowners; then why should they be allowed to vote. Pay the dues like everyone else, and then enjoy all the amenities.
At any time there are only a few homeowners who would be "not in good standing", and that would not affect the outcome of the election of the board of directors. The board of directors have no say in who can run for the board. Each director is elected by the members of the community during an annual election, and any member "in good standing" may run for the board.
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If you are concerned about assessment increases, special assessments, and fees du jour then avoid condos altogether. If you can't avoid HOA-burdened property, then try to avoid those that do not have express limitations on assessment increases.
As the cost of living increases, so does the expense of maintaining one's own home, and the common areas of an HOA. I would agree to avoid an HOA that does not have limitations on assessment increases. Read the CC&R's.
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