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MichaelG18 (Washington)
Posts: 9
Posted:
Hi folks,

I am a BOD member of a 300 person HOA in WA. Our community was originally planned as a roughly 600 home community, however the builder got into financial difficulties and ended up splitting into two developments, creating two separate HOAs that neighbor each other. The builder also put in place a Cost Sharing agreement to cover shared costs associated with maintenance of things like the community parks (both neighborhoods have rights to use), landscaping along the main entryway/streets, etc.

I'm wondering how common this is, and specifically looking to find out how other associations cover sharing costs for things like beautification of an entryway into the association(s), off of a main street/highway. In our case, the main entryway itself comes directly into the first neighborhood (my association) and the main street continues up and through our neighborhood up into the other neighborhood. There is no access to the upper neighborhood without going through ours. Regarding sharing of costs for maintenance of this entryway and landscaping along this main street, our contention is that both neighboorhoods benefit from this and should share the cost. Our neighboring association disagrees and contends that we benefit from this as it is "our" entryway, whereas they only pass through it, and must pass through it, to get to theirs. They view being required to pay for maintenance of this as a sort of "toll".

Has anyone an idea of whether there is any generally held practice in this kind of situation,or is it all over the map as to how these are treated?

For the record, I hate the cost sharing agreement as written, it was poorly constructed and makes administration very difficult, and we have been in the midst of a dispute over what should be covered and not, for the past several years. I'm trying to reach a mutually beneficial settlement of the dispute, and want to be fair and open minded. I just don't know how common the practice is, and if there are any clear cut "usually done" ways this is handled.
TimB4 (Tennessee)
Posts: 21,062
Posted:
Michael,

Typically when this is done, the two sections have their own Associations and a third Association (called a master association) is created to maintain the shared common areas and shared common elements.

When this happens, there is usually a separate assessment for each Association and the individual member is responsible for paying into two of them (the master and the local). Typically the Board of the master is made up from an equal representation from each individual association.

Here is a link to an article titled Master Homeowners Associations: Is Your HOA Its Own Master? published by HOALeader that may be helpful.

Hope this helps,

Tim
MichaelG18 (Washington)
Posts: 9
Posted:
Thanks Tim, wish ours had been structured that way. Ours is just two associations each paying the other for their share of costs spent by respective associations to maintain "common areas" and "areas of common interest" in thir areas. Which leads to a complicated accounting of expenses, and lots of legal challenges surrounding what areas should be covered, and whether the costs shared are equitable, etc.

I will check the article you linked and see if it has any helpful insights!
RichardW6 (Maine)
Posts: 13
Posted:
Michael,

My HOA has an arrangement with 2 other HOAs that's similar in concept to what Tim spoke about. We share a large common lake with these 2 other HOAs, although we use a legal agreement that's binding on all 3 HOAs instead of a Master HOA. The agreement specifies that all expenses directly related to the lake (management services, maintenance, stocking of fish, operating the boat ramp, etc.) shall be proportionally shared by all 3 HOAs based on the number of occupied homes in each HOA. Proportionally sharing the expenses was done to account for any new homes built in each HOA. The rationale was that as each HOA grows, its homeowners will consume more of the lake's assets, and therefore it should pay more towards the expense of maintaining the lake. Then as lake expenses are paid by the management company, the proportional share is calculated according to the number of occupied homes at that point, and each HOA is billed for their share. Decisions regarding the lake are also shared by the 3 HOAs, with the BOD in each HOA getting one vote, and the majority rules. Thus far it's worked well, even though 1 HOA pays very little towards the lake expenses because it has relatively few homes.

In a neighborhood that I lived in some years ago, that HOA also had an entryway that was shared with an unrelated HOA. The original developer went bankrupt, and the undeveloped ground was purchased by a new developer, who created the unrelated HOA. Even though there wasn't any way for those homeowners to get into their neighborhood without using our entryway, we didn't ask or expect them to pay for its upkeep. But since only our HOA funds were used to maintain the entryway, we also had total control over it and the entryway was "branded" with our HOA's name and not the other HOA's name. So there's a trade-off in sharing the expenses. If the other HOA contributes funds, then you're forced to accommodate their desires. But if you take responsibility for the upkeep, then it's your HOA's prerogative to decide what is done with the entryway. As they say, "He who has the money, makes the rules."

MichaelG18 (Washington)
Posts: 9
Posted:
Thanks for the comments. It is unfortunate that our agreement was written by the developer and very poorly at that. It is difficult to discern specifically what areas should be covered and what not (some like community parks are more obvious). The legal hassle over this has gone on too long, I am hoping we can just write a new contract that is much more simple to follow. This topic of common entryway came up in recent negotiations, and it just got me wondering how many other HOAs share costs for a shared entry like this.
RogerH9 (Colorado)
Posts: 1
Posted:
We have a similar situation with adjoining HOAs.

Our twelve unit 3 floor condo building with underground garage was built and then the developer sold the rest of the property to a developer. Our building is a small lot with minimal landscaping in the middle of a horse shoe drive of 34 unit duplex development that has an easement from our HOA.

For obvious reasons to the benefit of the developer and the owners of the duplexes, he wrote up a cost sharing agreement to make sure that the condo HOA would pay 26% of the costs for our share of the driveway and parking snow removal etc.

Our tract does not include the detention pond across from our driveway and parking lot in front of our building but the developer has declared it as being our shared costs for landscaping and maintenance. Again at 26% based on the total units. The new developer also included the management fees for the other HOA to be shared at 26%. We have our own management company.

We have been paying approximately 16% of the other HOA's total costs based on the cost sharing agreement written by the developer signed and notarized by our previous HOA president six years ago. This is based on a formula used by the other HOA's accounting between shared and not shared expenses.

We have recently had new owners and hence new board members who are more interested in correcting this disparity in expenses. Especially since we are in the arrears on these payments.

How do we go about renegotiating this cost share agreement? Attorney, mediator or just the board members?

Thanks for any and all input.

DeanJ
Posts: 1,786
Posted:
I not certain 2 HOA can be co-owners of the same common areas. If HOA A borrows money, can the lender place a lien on property also owned owned by HOA B? What would occur if A defaults?
ElleN (Idaho)
Posts: 1,339
Posted:
Quote:
Posted By RogerH9 on 07/17/2025 2:26 PM
We have been paying approximately 16% of the other HOA's total costs based on the cost sharing agreement written by the developer signed and notarized by our previous HOA president six years ago.
Pursuant to what covenant in the condominium's declaration?

If there is no covenant to support this, then what should have been done is put this to an owner's vote.

The condo association president of six years ago likely cannot lawfully make a decision like this on his or her own.

This forum can prepare you for a meeting with an attorney. And you do need an attorney, if only because readers here do not have your 12-unit condo association governing documents ant the 34-unit duplex HOA's governing documents in front of them.

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