Should we sell or should we do something else?

Our community has a few acres of undeveloped land that’s been sitting there since the community was turned over to the homeowners – it’s next to a smaller group of home. Recently, a developer inquired about buying the land to put a store on it.

On one hand, we could REALLY use the money, as we have a serious problem with delinquencies and this would bolster our reserves and take care of some long, long, LONG delayed capital improvement projects, but we’re also concerned about trash, noise, traffic (the top issue) and crime, all of which will have an effect on property values (they’re already low and I’d hate to see us do something that could stomp them down even further.

Obviously we have a lot of work to do before making a decision on this (we have to change the CCRs to give the board authorization to sell the land), and then the developer has to get a zoning variance from the city – and that will certainly need an endorsement from the neighborhood association (we’re members and so I’d want to be sure their issues were addressed which are probably the same as ours).

Of course, we already have one homeowner (a former board member) who’s already voiced his objection to the idea and making noises about getting an attorney and suing to stop it, but believe me he’s the last thing I’m thinking about right now (he has some other issues with the board which is probably the real reason this has come up). In any event, he’s ONE homeowner and I’m sure the rest are going to have their say and then the majority will dictate what happens next.

I was wondering if any of you have gone through something like this and what steps you took to educate the homeowners before taking a vote. I know we need to get our own appraisal of what the property’s worth and CCR revisions is a project we’ve been working on for years now (it needs to be done for a number of other reasons , so if we did that and homeowners decided not to sell the land, that would be ok with me). Does anyone else have any suggestions as to what we should consider, tips on gathering information, etc?

If we don’t sell after all of this, I’m thinking we should decide what to do with the land besides continue to pay property taxes on it every year. If your community decided not to sell to a developer and you did something else with it, what you did, how much it cost, etc.

Thanks for your suggestions and comments!

Have you seen a tax bill? Most common areas are taxed at $0.

As for selling it, if the common area is on everyone's deed, you need to vote and get 100% of homeowners to sell the land. Next, each homeowner needs to contact their mortgage company and maybe 2nd mortgage company to approve the sale of the land. And more.

Instead of having a store go in there, could the land be parceled up and sold for home lots? It would be better than a store going in. I agree that the noise, potential crime, and increased traffic through the neighborhood are all undesirable. If you don't sell the land, consider putting groomed hiking/jogging trails through it. Our neighborhood has many acres of undeveloped land with trails throughout that the community uses heavily. It really adds a lot of value to this neighborhood.

Thanks for all the replies so far (hopefully there will be more!)

GlenL – as written right now, the CCRs don’t allow us to sell the land. One of the many reasons we began revising them several years ago was that another developer inquired about the land. However, with everything else going on in the community, the revision process was pushed aside over and over. The revisions finally got done and we started the process, but then found several errors were made and there have been a number of ownership changes so our attorney told us we have to start over. We never got the required majority at that time, so starting over is ok.

I didn’t know the mortgage companies might have a hand in this decision, but I would think that was an issue the revisions would have addressed. I will double check with our attorney – thanks for the information.

SteveM9 – I’d have to look at the tax bill to see how it breaks down, but we do pay taxes on our common area – I don’ t think they’re very high, but given our finances, anything we can do to save money would help.

RobW – that’s an interesting idea (leasing to telcoms to erect cell towers), but the surrounding area is developed enough that I don’t think that would work. We also have a fire station nearby and I’d be worried about interference

ChristinaO – part of the problem with our area (I’m talking about the larger community now) is that we had a lot of overbuilding of housing communities and when the real estate market tanked, it really got hit hard, so building new homes ain’t gonna happen (for one thing, there’s a strip mall on the other side of the land and I don’t think anyone wants to be that close).

The land is shaped like an “I”, but I suppose a walking trail of some sort could work (better than the homeless guy who used to camp in the middle of it!). This morning, I also got to thinking some sort of community garden might work – either for our community or perhaps we could lease it to a non-profit organization that’d be willing to cut down the tall grass. I even thought about the city buying it for a small park, since we don’t have a lot of places for kids to play.