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Irresponsible is shady. If you cant manage a community correctly, don’t take on the job.
"Irresponsible" is not "shady." "Shady" implies "intent."
"irresponsible" is negligent, careless, or obtuse. "Intent" indicates an effort to be duplicitous and self-serving.
There are probably bazillions of condo board officers who only take the job because no one else will, and they are begged to do so. They may not be cut out for the role.
It is not an easy role, particularly to fix a financial mess one didn't create.
"Job?"
Most condo directors have "day jobs," and being on the board is a service role.
"Irresponsible" is not "shady." "Shady" implies "intent."
"irresponsible" is negligent, careless, or obtuse. "Intent" indicates an effort to be duplicitous and self-serving.
There are probably bazillions of condo board officers who only take the job because no one else will, and they are begged to do so. They may not be cut out for the role.
It is not an easy role, particularly to fix a financial mess one didn't create.
"Job?"
Most condo directors have "day jobs," and being on the board is a service role.
Well OP said Shady things happened in the org. So im going to go with that.
A lot of HOAs, up in CT and NJ especially, have to be managed by companies/arrangement’s. So they arent forced. A deal is made between the board and the company bidding for the community.m which raises HOAs. If they agree to take it on and fail, they did it with intent. You cant fail that bad without reporting deficits to your community after dozens of meetings and open town hall events every year. Even if you arent doing it to be malicious, the company not balancing the budget correctly and not remedying implies intent.
Maybe i have a very strange look on HOAs. I vehemently oppose them.
I am sure there are exceptions, but the common method for correctly determining maintenance fees involves two major components:
The Operating account, from which is paid all routine daily, weekly, monthly, and annual expenses, many of which are contract amounts, such as for regular groundskeeping, trash service, insurance, utilities, and site staff. There are also various contingency items that are included for unexpected, generally minor issues, broken down to plumbing, electrical, equipment, building, grounds, and other broad categories.
Each of the relevant categories have a total calculated estimated amount for the budget year, with the total being the annual requirement for routine items. This is divided by 12 months, and provides the average cost per unit owner.
The second component is your reserve funding. It is common for states to require that a plan is developed to make funds available for major repair or replacement of EVERY element of the common and limited common elements. All elements have a statistical useful life, which is your baseline when new. For example, depending on the type of roofing material, it may have a 25 year life. Or 50. Each element also has a current estimated cost for the repair or replacement. If, today, you have a 25 year roof, that is already 15 years old, and you know based on an estimate today that the cost to reroof will be $100,000, and you currently have NO reserve funds allocated, or if allocated, uncollected, then you need to put $10,000 per year into the roof reserve account in order to have the $100,000 to complete the job when it is expected to become due. (adjustments for inflation are handled within the worksheet for the calculations).
For a $10,000 annual reserve contribution, if you have 10 unit owners (assuming they all have the same percentage of ownership, which is often NOT the case), each owner will need to contribute $1,000 over the12 month period. Add up the amounts for each reserve element, based on actual "remaining life" of each element and the current estimated repair/replace cost, and you arrive at the average cost per owner to fund the reserves properly. Divide by 12 to arrive at the monthly contribution needed.
Add the amount needed to fund the operating account to the amount needed to fund the reserves, and that is the total amount needed as your monthly fee.
Keep in mind, Condo and Homeowner Associations are NON-PROFITS. They (in theory) are not just collecting money to do what they "want", or to figure out where to spend it. Every penny is accounted for, and you should receive at least a year end financial report showing what was spent and where, plus a Budget and Reserve funding plan for the new year, showing where they plan to spend future money. IF they are doing their job, The Board would have a fairly accurate, 20 to 30 year plan to ensure all funds are available when needed. It is, after all, the Board's Number One Job to maintain, protect, and preserve all common and limited common elements. It is most certainly NOT their job to "keep maintenance fees low".
I am sure there are exceptions, but the common method for correctly determining maintenance fees involves two major components:
The Operating account, from which is paid all routine daily, weekly, monthly, and annual expenses, many of which are contract amounts, such as for regular groundskeeping, trash service, insurance, utilities, and site staff. There are also various contingency items that are included for unexpected, generally minor issues, broken down to plumbing, electrical, equipment, building, grounds, and other broad categories.
Each of the relevant categories have a total calculated estimated amount for the budget year, with the total being the annual requirement for routine items. This is divided by 12 months, and provides the average cost per unit owner.
The second component is your reserve funding. It is common for states to require that a plan is developed to make funds available for major repair or replacement of EVERY element of the common and limited common elements. All elements have a statistical useful life, which is your baseline when new. For example, depending on the type of roofing material, it may have a 25 year life. Or 50. Each element also has a current estimated cost for the repair or replacement. If, today, you have a 25 year roof, that is already 15 years old, and you know based on an estimate today that the cost to reroof will be $100,000, and you currently have NO reserve funds allocated, or if allocated, uncollected, then you need to put $10,000 per year into the roof reserve account in order to have the $100,000 to complete the job when it is expected to become due. (adjustments for inflation are handled within the worksheet for the calculations).
For a $10,000 annual reserve contribution, if you have 10 unit owners (assuming they all have the same percentage of ownership, which is often NOT the case), each owner will need to contribute $1,000 over the12 month period. Add up the amounts for each reserve element, based on actual "remaining life" of each element and the current estimated repair/replace cost, and you arrive at the average cost per owner to fund the reserves properly. Divide by 12 to arrive at the monthly contribution needed.
Add the amount needed to fund the operating account to the amount needed to fund the reserves, and that is the total amount needed as your monthly fee.
Keep in mind, Condo and Homeowner Associations are NON-PROFITS. They (in theory) are not just collecting money to do what they "want", or to figure out where to spend it. Every penny is accounted for, and you should receive at least a year end financial report showing what was spent and where, plus a Budget and Reserve funding plan for the new year, showing where they plan to spend future money. IF they are doing their job, The Board would have a fairly accurate, 20 to 30 year plan to ensure all funds are available when needed. It is, after all, the Board's Number One Job to maintain, protect, and preserve all common and limited common elements. It is most certainly NOT their job to "keep maintenance fees low".
Yes. Good details.
What I meant was a simple reference, a 700SF 2 BR Flat often will have a lower dues amount than an 1100SF 3 BR flat.
Higher SF implies more roof, foundation, exterior area for that unit, and higher BR count implies more usage of facilities.
Shady suggests that they were embezzling money (which happens, but very very rarely).
It's quite common in S. FL, which is why local governments are finally cracking down and prosecuting HOA officers that have embezzled money. There are so many complaints by residents that local governments were forced to take action. No doubt the Surfside building collapse had something to do with it. Miami Dade HOAs are now required to upload financial statements and be made public. The former president of my mom's condo association has been reported to the city, along with supporting evidence showing they embezzled money. BTW, this isn't the first time that a president has stolen money from my mom's HOA, but nothing has ever been done. So the condo owners continue to pay more and more in HOA fees to cover the losses due to theft.
Just do a quick search and you'll see how many recent cases come up. It's disgusting.
Don't forget that a Homeowners Association and a Condo Association are not the same thing. Yes, they are similar, but still different and regulated under different rules/regulations in most, if not all, states/counties/cities. Those monthly dues are used to pay for services and amenities that the owners don't have to pay for entirely out of pocket, the costs are shared instead.
If you don't want to live in an HOA, there will be homes available where there are none. To each their own.
True, I've never lived in one with an HOA, and after reading this thread, never will.
For a $10,000 annual reserve contribution, if you have 10 unit owners (assuming they all have the same percentage of ownership, which is often NOT the case), each owner will need to contribute $1,000 over the12 month period. Add up the amounts for each reserve element, based on actual "remaining life" of each element and the current estimated repair/replace cost, and you arrive at the average cost per owner to fund the reserves properly. Divide by 12 to arrive at the monthly contribution needed.
Add the amount needed to fund the operating account to the amount needed to fund the reserves, and that is the total amount needed as your monthly fee.
Note that Fannie Mae requires that the amount going to reserves must be at least 10% of the total budget even if the reserve study doesn't indicate a need for that level of funding. It must appear as a line item in the budget. Absent a line item for reserves equal to or exceeding 10% of total budget the project will not pass a full FM review for a conventional loan.
What people pay in other HOAs obviously depends greatly on a number of factors. In urban high-rises it's not uncommon for association fees to be over a grand a month, especially for maintenance-intensive vintage buildings. But that will often include all utilities including cable and internet and rec facilities like gym, pool, clubhouse, etc.
As for your specific situation... if there's a substantial reserve deficit, a spike in monthly dues is pretty much the only practical remedy other than an even more painful one-time special assessment. Maybe the previous board could be sued for breach of fiduciary duty but that doesn't repair the financial hole the association faces; it just brings some measure of justice.
Yep. I pay $800 a month in HOA fees for my 2bed/1bath condo in Honolulu. Why are my fees so high? Because they cover 24/7 security as well as a property manager, daily grounds upkeep, rooftop pool and BBQ area and associated maintenance, water and sewage (and water isn't cheap in Hawaii), and cable.
Hopefully, OP's increase will only be temporary until the reserve funds are adequately funded.
Never had an HOA, would never buy a house where there is one. But I had no idea whatsoever that these were $400 a month. It is hard to imagine any justification for a fee that high.
I used to say the same thing, but now I'm on the I'll pay higher HOA fees or higher property taxes, but not both. In Hawaii, property taxes are among the lowest in the nation. For context, I pay $1,300 a year on a $500k condo in property taxes. My $800 a month HOA bill, while not insignificant, is something that I don't mind doing as a result. And it's not like associations that charge such amounts are not generally providing expansive services in return. So, honestly, I feel that one has to do a balancing act when discussing these matters and whether something is "worth it" to them.
$800 a month HOA bil,what do they provide?
I know with NYC co-op apts,their monthly bill is high as part of the $$ goes to servicing the mortgage of the CO-OP building.
C-O-OP are big rip offs.
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