HOA and other fees

[barnaby33]

Several people asked in other forums about whether HOA fees are included in ownership costs. This is an interesting question but what I feel is even more interesting, is where does that money go?

When a condo is built the developer pays for basic services only for a short period. Then as far as I know the homeowners association is responsible for them. If that is so why is it the homeowners don’t or can’t find ways to lower the fees?

[barnaby33]

I remember specifically from my expedition to craneville how high the HOA’s were. I couldn’t figure out what I was getting for that money. Acqua Vista was especially absurd at 500/month. I would love to hear from a couple of people who live downtown (if there are any on this board) as to what the HOA fees cover and how high they are per development.

Josh

[Bugs]

I’ve analyzed budgets for condo projects so I know where most of the money goes.

The different areas of allocation typically include some utilities, like water/sewer/trash, electricity for the common areas, gas to run the laundry rooms, property managements fees, insurance premiums to cover the structures and common areas, reserves set aside to maintain the common elements, salaries, benefits and indirect costs for employees and contractors who provide services, and legal/accounting fees for the association. For some projects there are also property taxes for the common elements, which are assessed separately from the units. It all adds up.

Different condo associations manage their finances differently. Between the management of their finances and the enforcement of their CC&Rs it can have an effect on the value and marketability of units in their projects. A lax HOA can allow maintenance issues to accrue, services to not be rendered, and can even go indo debt for their expenses and repairs. This is especially true for unanticipated major expenses, like paying off a lawsuit or replacing a major structural component before it’s time.

As a sweeping generality, the HOAs run by the older generation tend to be more conservative in their management styles, and that includes enforcing their CC&Rs – that’s how you can wind up with condo projects where kids are not allowed to play on the lawns in front of their units or where it’s forbidden to leave your garage door open. HOAs with younger members are generally more lax about both their finances and their CC&Rs. It can be a real mixed bag.

[MANmom]

Yes, but nowadays we are getting people on the boards of these HOAs that can’t even balance their checkbook. My Husband serves on a board for a condo we own in Rancho Mirage that has been in litigation for several years due to idiots who tried to subvert proper due process in order to lower their own HOA dues while raising other units dues. They were also using reserve funds for other than reserve needs, which has led to increases in our dues. These units are over 25 years old and we really need those reserves right now. It can be a mixed bag, and we finally have enough people’s attention to come to the meetings and participate in the process, but for how long? They will become complaicent again soon enough, that’s when you get an ignoramous for your HOA president.

[Author]

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