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Not aware of any such consideration for HOA property. The value is based only on the subject property that will be collateral for the loan. It would be foolish to consider such things as anything other than a liability since the HOA corp can abandon or give away such property at its leisure. The only tie that the homeowner has to it is a liability to pay for it.
As a realtor, I have spoken with lenders about financing and have run into situations where due to a lack of reserves or active management of an HOA/Condo will not get financing approval no matter what the buyer's credit history is.
The statement in bold is garbage. An HOA cannot do so without approval of the homeowners or as setup in the community convents.
As a realtor, I have spoken with lenders about financing and have run into situations where due to a lack of reserves or active management of an HOA/Condo will not get financing approval no matter what the buyer's credit history is.
The statement in bold is garbage. An HOA cannot do so without approval of the homeowners or as setup in the community convents.
No question that individuals are misled and lack understanding when buying - however the HOA "amenities" should not be considered assets nor anything justifying a higher sales price for the property. If anything, more amenities means higher costs of operation, greater liabilities over time for property owners, and the result would be depressed prices.
The value of the HOA's property is not a factor when valuing the subject property. The HOA's property is not collateral for the loan.
Unlike HOA property, for a condo the "common area" does not belong to the condo corporation - it actually belongs to the unit owners typically as an undivided % interest. The value of that interest is relevant because it is pledged as part of the collateral for the loan. In contrast, the HOA-owned property does not represent an asset to the homeowner and at best represents only an economic liability to the homeowner and potentially to the lender.
I have a question about a little of this. I know of an hoa community with common property. In the hoa community are single family homes and several townhouse and garden apt style condominiums. There is no condo corporation. Dues are paid to the master association and those who live in the townhouse and condo subs pay additional dues for their smaller community. Some of the older condo owners sometimes say they own all the common area all around and everyone else is just there at the condo owners' whim to help with payments. We just thought they were imagining things. What do you make of this legally speaking?
My neighborhood of ~150 homes has an HOA but no covenants (removed before I moved to the neighborhood about 8 years ago). Apparently there was much division in the neighborhood during this time in regards to creating a new covenants and there were rumors with the president at the time possibly spending money inappropriately.
Currently the HOA dues are strictly voluntary and pay for the front entrance landscaping, maintenance, and street light (lot is about 2 acres in size). Also, you receive a key for the tennis courts when dues are paid.
Unfortunately, we only receive dues from about 1/3 of the homes and although we are able to maintain the entrance to a degree, the tennis courts are aging rapidly and I fear that an expensive issue could really cause an issue on the budget.
I currently volunteer as the “president†of the HOA but have no idea on how to prepare for the long-term future of this property. I have been unsuccessful in getting anyone involved. There are 5 other board members but the majority of them are really not engaged.
Any suggestion on what I should do to prepare for future expenditures, how to get people to actually care about this property, and or protect myself from any liability?
The current state is pretty frustrating for me so a big thank you for any advice.
You need to look at the articles of incorporation and bylaws for the HOA to be able to determine what, if anything you can do. For the most part, the covenants and restrictions have to be in place when the property is purchased and made a part of the deed. If the bylaws allow you to amend, alter, change, etc., covenants and agreements with a certain percentage of the voting majority (2/3rd or something like that), there is a chance you can re-implement them by having a general meeting and getting the required number of votes but only if that language is in the bylaws.
The best thing to do would be to try to get as much voluntary support from the residents as possible by doing a lot of "positive" marketing and trying to get people involved and caring about their neighborhood. You can have some fund raisers to try to bring in some additional money for the tennis courts and other expenditures that are expected. Have some contests like "yard of the month" as well as perhaps creating a gardening club to take care of the entrance. You might also contact the local college/university and see if they would like to have the entrance to the subdivision as a "project" for one of the local gardening organizations that are managed through the college's extension office.
You might also check with the city or state to see if they have any "beautification" grants, block grants, etc, that will help. Maybe the girl scouts, or rotary club or other organization would like to "contribute" to the beautification of the subdivision in exchange for a sign that recognizes their effort (and a write up in the local newspaper).
You might even talk to a local church and see if the youth minister would like to offer a "learn to garden" experience for the kids in his class.
You might contact a real estate attorney and see what your legal options are also. If the covenants were "removed" illegally, they might still be very much in effect and give you the legal leverage you need to bring the neighborhood back to it's former glory. It's definitely worth looking into.
As a realtor, I have spoken with lenders about financing and have run into situations where due to a lack of reserves or active management of an HOA/Condo will not get financing approval no matter what the buyer's credit history is.
The statement in bold is garbage. An HOA cannot do so without approval of the homeowners or as setup in the community convents.
Actually your statement is garbage. This very scenario just happened a few months ago in Virginia. The HOA was broke and had to sell the community park to raise money. It was approved because the HOA members had no choice. So the previous poster was correct, there is no guarantee that amenities will last. This same thing has also happened in numerous boom/bust areas of California.
I have a question about a little of this. I know of an hoa community with common property. In the hoa community are single family homes and several townhouse and garden apt style condominiums. There is no condo corporation. Dues are paid to the master association and those who live in the townhouse and condo subs pay additional dues for their smaller community. Some of the older condo owners sometimes say they own all the common area all around and everyone else is just there at the condo owners' whim to help with payments. We just thought they were imagining things. What do you make of this legally speaking?
If there are "garden apt style condominiums" then there is going to be a condominium corporation. It sounds like the townhome owners are subject to two involuntary membership corporations and so are the condo owners. The "common property" you are referring to is likely owned by the "master" HOA corporation but that is only speculation - one would need to reference the restrictive covenants and declaration of condominium burdening the properties.
One way of checking might be to look at the appraisal district's characterization of the property. If you know the name of the HOA corporation then a search of the appraisal district records will indicate the description of the property being appraised. That is not "direct evidence" of which entity owns what but it is evidence of what the tax office believes the master HOA owns.
Actually your statement is garbage. This very scenario just happened a few months ago in Virginia. The HOA was broke and had to sell the community park to raise money. It was approved because the HOA members had no choice. So the previous poster was correct, there is no guarantee that amenities will last. This same thing has also happened in numerous boom/bust areas of California.
shame the HOA had a vendetta against those Obama supporters
It sounds like the townhome owners are subject to two involuntary membership corporations .....
When a buyer purchases a property in an HOA or Condo, they are voluntarily agreeing, not involuntarily doing so. If they do not wish to become a member, they can refuse to purchase. No other alternative if the CCR specify mandatory membership.
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