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As an investor I have bought in a couple of HOA communities and I don't mind paying for the amenities and keep up of the community since overal it keeps the values higher and the proeprties are better maintained.
There are many HOA's that are very nice to deal with and are not like an annoying factor which makes you feel that they are out to get a home owner for any little item or to police a community that you have the feeling you want to sell a.s.a.p. to get rid of the HOA.
On the other hand there are some very annoying and bad property management companies and in this case I mean the ones who are running an entire community.
I was wondering to hear some of the experiences that people have and I'm not looking to hear from people who just don't want to live in a HOA community and hate them because that is not what I'm trying to learn since I'm well aware that some people will never want to live in such a community.
I would like to hear the good, the bad and the ugly but also exceptional positive things and how some management companies run these communities.
We are still looking to buy more proeprties and also deal with other investors and this can help us.
I know about Seven Oaks and like how that is run and never had any issues with the property management company and every letter that was sent out for my property (not many) was based on facts and in a friendly manner so as an home owner and for the tenants, not a issue to work with them to solve the issue.
I have read about the Pebble Creek horror story of the owner fighting them for 11 years and finally he won and about the issues at Bridgewater but I would like to hear if others have maybe different experiences and it can be any community in the Tampa Bay area that has an HOA.
Thanks and I'm looking forward to get constructive replies.
As someone who claims to be an investor in HOA communities, I am surprised that you are confusing the role of the management company with the Association's Board of Directors.
Management companies do not run the communities -- they are run by the Board of Directors, comprised of owners of the community. The management company personnel are merely employees that act at the discretion of the Board.
At the last Condo Association where I was a board member, we were very reasonable and friendly to the owners, until they were in arrears on their dues. Then we sent a vicious attack lawyer after them, and he did a great job of protecting the Association's interests. I am sure that a number of people that were getting run over by our legal team didn't have such high praise for us.
I know of some great managers and management companies that are stuck working for a lousy Board, and it makes them look bad. They then have to decide to give up the contract, try to show the Board a more reasonable path, or hope for a Board overhaul.
There is no reason that a good Board should have a bad management company or bad employees. That's why they sign easily-cancellable contracts.
Any blame should be laid at the feet of your fellow neighbors that occupy the Board.
I'm not confusing anything. We are dealing in the community where i live with a bad HOA but not a bad board. That are 2 different entities. The only thing is that the Board is still occupied with people from the developer and they won't turn over the HOA to the home owners making this 2 different entities.
The HOA is very badly managed and I have seen similar things else where. That is why I would like to know other peoples experience.
In our case the HOA management company writes rude letters to owners and is picking battles with certain owners while others with violations never get a letter. I happen to know this because i was and still am on a committee but we never have any meetings and the management company is making every approval themselves.
Before you judge me, I'm not the one being picked on so I don't worry about myself but see how bad they are handling this. Our property looks very good and I don't mind living in a HOA community but wish we had a different company.
Due to my profession and being an investor I deal with other HOA's and have seen some HOA's that are easy to work with while others are a disaster.
As someone who claims to be an investor in HOA communities, I am surprised that you are confusing the role of the management company with the Association's Board of Directors.
Management companies do not run the communities -- they are run by the Board of Directors, comprised of owners of the community. The management company personnel are merely employees that act at the discretion of the Board.
At the last Condo Association where I was a board member, we were very reasonable and friendly to the owners, until they were in arrears on their dues. Then we sent a vicious attack lawyer after them, and he did a great job of protecting the Association's interests. I am sure that a number of people that were getting run over by our legal team didn't have such high praise for us.
I know of some great managers and management companies that are stuck working for a lousy Board, and it makes them look bad. They then have to decide to give up the contract, try to show the Board a more reasonable path, or hope for a Board overhaul.
There is no reason that a good Board should have a bad management company or bad employees. That's why they sign easily-cancellable contracts.
Any blame should be laid at the feet of your fellow neighbors that occupy the Board.
There is "role" and "reality". The reality is that there is no shortage of unscrupulous management companies and aligned industry attorneys that collude to prey on the homeowners AND on the HOA corporation. A common tactic is to work to usurp the board's powers - particularly with respect to collection and foreclosure. Management companies often have kickback and tying arrangements with insurance, banking, and other vendors that are not disclosed to the board.
For example, some management companies advise the unwitting board to okay the purchase of specific insurance coverage. The word "coverage" as opposed to "policy" is intended as are the quotes. The board is led to believe they are purchasing a policy - but they are not. The HOA board has no idea they are sharing "coverage" with 100-300 other HOAs - all paying full premium for the face value of coverage. The HOA can keep the insurance only so long as it keeps the management company. Now the management company has every incentive to provoke litigation in the subdivision - and they certainly will. Once the HOA is in litigation with an owner, the HOA will not be able to purchase insurance elsewhere. Because of the tying arrangement, the HOA also cannot keep the insurance it thinks it has unless it also keeps the management company.
To provoke the dispute, the management company will flood the subdivision with "notice of violation" letters. It stirs up the place and generates even more business for the management company. Frequently the management company will get paid for each letter - so flooding the subdivision with trumped up accusations is lucrative. Once the management company provokes litigation, it cannot be fired until the lawsuit is over due to the tying with insurance. Many times the management contract will also provide for the management company to get a cut (e.g., 10%) of the payout on any insurance claim. The scheme is sophisticated. The certificates of insurance produced by the management company upon request will not reveal that the HOA does not own the policy nor that 100-300 other HOAs are sharing the same policy.
1. Ask for a copy of the certificate of insurance.
2. Ask the management company to identify the name of the owner of the policy. Do not trust the response of the management company.
3. Ask for a copy of the insurance policy including the declarations page that identifies the owner of the policy.
Management companies frequently DO run the subdivision and they give the board the illusion of being in control.
Last edited by IC_deLight; 10-26-2012 at 09:16 PM..
Thanks for your reply. This is the first time I hear about something like this but it makes sense and could very well be going on where I live.
In another State there was a huge scam/ fraud unruffled with lawyers, realtors and Hoa's who were all in it when they foreclosed on home owners, sold their homes again. Even a couple were found murdered (lawyers) and believe things like that are also going on in Florida.
Quote:
Originally Posted by IC_deLight
There is "role" and "reality". The reality is that there is no shortage of unscrupulous management companies and aligned industry attorneys that collude to prey on the homeowners AND on the HOA corporation. A common tactic is to work to usurp the board's powers - particularly with respect to collection and foreclosure. Management companies often have kickback and tying arrangements with insurance, banking, and other vendors that are not disclosed to the board.
For example, some management companies advise the unwitting board to okay the purchase of specific insurance coverage. The word "coverage" as opposed to "policy" is intended as are the quotes. The board is led to believe they are purchasing a policy - but they are not. The HOA board has no idea they are sharing "coverage" with 100-300 other HOAs - all paying full premium for the face value of coverage. The HOA can keep the insurance only so long as it keeps the management company. Now the management company has every incentive to provoke litigation in the subdivision - and they certainly will. Once the HOA is in litigation with an owner, the HOA will not be able to purchase insurance elsewhere. Because of the tying arrangement, the HOA also cannot keep the insurance it thinks it has unless it also keeps the management company.
To provoke the dispute, the management company will flood the subdivision with "notice of violation" letters. It stirs up the place and generates even more business for the management company. Frequently the management company will get paid for each letter - so flooding the subdivision with trumped up accusations is lucrative. Once the management company provokes litigation, it cannot be fired until the lawsuit is over due to the tying with insurance. Many times the management contract will also provide for the management company to get a cut (e.g., 10%) of the payout on any insurance claim. The scheme is sophisticated. The certificates of insurance produced by the management company upon request will not reveal that the HOA does not own the policy nor that 100-300 other HOAs are sharing the same policy.
1. Ask for a copy of the certificate of insurance.
2. Ask the management company to identify the name of the owner of the policy. Do not trust the response of the management company.
3. Ask for a copy of the insurance policy including the declarations page that identifies the owner of the policy.
Management companies frequently DO run the subdivision and they give the board the illusion of being in control.
Greenacres is a property management company acting as the HOA for several communities up here in Lutz. They are nice to deal with until you start leaving your property to the dogs. Then, they (obviously) start sending letters, and be aggressive about the maintenance.
The one thing I've witnessed over the years is that many HOA boards get the feeling of power and over extend their boundaries. I have asked my own board more than once to stop picking on my neighbors and do something to help our community. I would volunteer and have in the past but now they want me to drive around after business hours and on weekends taking pictures of boats and commercial vehicles illegally parked so the management company can issue violations. While I'm not a fan of large or commercial vehicles in a residential area, I am sympathetic that in this economy that some people have no choice and I just won't do it.
In another State there was a huge scam/ fraud unruffled with lawyers, realtors and Hoa's who were all in it when they foreclosed on home owners, sold their homes again.
Of the millions of home foreclosures since the real estate bubble popped, I don't believe there has been a single documented case where a homeowner who was current with their payments to the HOA was foreclosed on and had their house sold.
I would love to know how a HOA, management company and other parties could conspire to seize someone's home who was current on their payments. That sounds like a nice line of business I'd want to get into.
If the HOA and a realtor had a side deal, I could see some shenanigans happening. Realtors aren't known for their ethics. I was on a condo board that was negotiating with a short seller who owed >$10k in past assessments and legal fees. I discovered that a member of the Board was also the realtor representing that homeowner, and was privy to our negotiating position. She didn't think it was legally or ethically required to recuse herself or even disclose the information. When I found this out, I demanded her resignation or I was going to file a formal complaint at FREC, along with the Board suing her and her broker. We also rescinded our negotiated discount, which cost her client several thousand dollars out of pocket. Ouch.
Like TampaKaren said, it all comes back to the Board, not their employees.
Location: ๏̯͡๏﴿ Gwinnett-That's a Civil Matter-County
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I have been serving on the board of directors with my HOA here in GA for several years. I know that I'm in GA but I have lived in HOAs and Condos in Florida so my post should still be relevant. More on that in a minute.
In a nutshell...
There are good people serving on the board and there are bad people serving on the board.
There are good management companies and there are bad management companies.
There are well written and appropriate governing documents and there are docs that were found on the internet, copied and pasted into MS word and filed with the courthouse.
And likewise, there are good owners and owners that DGAF just like there good renters and renters that will trash your property shortly after moving in and then never pay their rent.
Which one do ya gots? Well, that's where you're going to have to use your due diligence.
The first thing I did when my "administration" took over was we fired our management company because they weren't doing squat. A group of very dedicated volunteers put in a lot of time to tackle some serious problems during the peak of the 08 & onward housing and foreclosure crisis which ravaged our community. We managed to clean up our finances while simultaneously lowering dues and adding landscaping and new amenities to the community. We hired a law firm to deal with the delinquencies with tremendous success. Not to toot my own horn, but I'm very proud of what has been accomplished here and I can see the results with my own two eyes as there are now much fewer homes on the market.
So that ^^^ is a good example of where we have a good BOD and a bad management co. We had gone through a couple of management cos, there were both horrible.
Now here's another example that is in stark contrast to that.
During the 90's I lived in a condo assn in florida which had a good management company but a horrible set of ego maniacs on the board. They did not understand the limits of their rights and responsibilities and routinely took advantage of situations and made enemies. How bad can that really be? I'll tell you how bad... I was sued for shipping and receiving too many UPS packages. I won, the association lost and lost big and then I moved right after that.
On to the issue of good and bad owners and tenants.
Poorly maintained properties beget more poorly maintained properties. Even with HOAs and management cos, there are limits on funds and limits on what can be done if an owner doesn't want to cooperate. We have a couple of owners in our community that break every rule in the book, have never ever paid their dues, their properties look like !@#$ and they have racked up thousands of dollars in fines and there aint a damn thing we can do about it... why? Because they have filed for bankruptcy
Don't forget, if you're renting out these properties and your tenants don't abide by the rules (and really, most of them don't care to) YOU will be the one getting the violation letters and fines. So you're more than likely going to have issues with that any way you slice it. If you don't want any grief from that, you'd be best buying where there aren't any deed restrictions.
That leads me to my next subject... governing documents. These docs outline every rule and procedure. They are the holy grail. But because it would cost hundreds of thousands of dollars to have an attorney draw up a fresh set of documents, most of the time they come from somewhere else. And they can be boiler plate, fairly general and reasonable stuff ... this can be good or bad if they don't address matters specific to a community... or they could have come from a retirement community in west palm beach and are overly restrictive for your community. Luckily, you can find out ahead of time which is the case.
In conclusion, I will tell you how to try to figure out what situation you've got there.
1.) Find your HOAs website. See what kinds of stuff is in the news letter. Activities and gatherings etc.
2.) Contact the association. Ask them some questions. Tell them you are an investor and are there any restrictions on renting properties.
3.) Contact the management co (if there is one) during business hours. Do they answer the phone or is it always voicemail?
4.) Get a copy of the rules and restrictions. They're filed with the courthouse. See if there's anything there you anticipate being broken.
5.) Drive through the neighborhood and look at the condition of the properties and see if the rules are being enforced.
6.) Take a look at the community amenities and see how they are being maintained.
7.) See if you can get a copy of a recent budget and see how much the dues are and where the money goes.
8.) Find out if there are any special assessments or talk of any in the works.
9.) Do a records search to see how many lawsuits your association has been involved in (if any) and what was the judgment.
Remember, even if you don't have a tenant you will be expected to pay dues/maintenance. If you don't and you're in an actively monitored community, you can expect many expensive legal headaches if you don't comply. And if it's not actively monitored, well you can expect end up with a losing investment in the long run.
In our community the HOA seems to pick and choose who to send letters to and in one case they are targeting a home owner who is really maintaining his property while not doing much about properties with many violations if the HOA ( not the board) likes the person.
My property looks very nice so I never had any issues other than with my neighbors who are criminals and it stopped when one of my neighbors got probation and. Community service for something he did to me and after that the stopped harassing us. Kind of when you hit the bully between the eye...that worked and I waited for the neighbor to do something when there were witnesses to go to the police.
The HOA is however providing a lawyer to another home owner to fight his neighbor and it seems the HOA believes we all have to payoff that while they didn't do that for me, and in the end I think they shouldn't be involved in neighboring issues but in my case it started with multiple violations that were never addressed by the HOA even after the builder was asking them to help out.
I think it is wrong to ask neighbors to rat out other neighbors instead of the HOA doing the drive by in the weekends and evenings. Of course many neighbors will call on each other after some are getting letters and always have the feeling a neighbor is getting away with the same thing, but in my community that is really the case and we never have any meetings anymore for the committees and only one annual meeting.
The HOA is taking control on everything while being very biased.
In Seven Oaks the HOA in my opinion is doing very well and as stated in my OP all letters were in my opinion based on facts and written in a decent way.
I have the feeling that many HOA's or property managers ( CAM) are having the feeling they are the power and can use it for everything and it makes a community less desirable due to home owners getting sick of the HOA.
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