Building of Clubhouse, Amenities

Started by McgrathH • 11 replies • 2396 views

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McgrathH
Posts: 30

Posted:

Greetings, just became aware of this site and you people are doing great and much appreciated work!

We live in a 55+ community started in 2007 (172 homes total to be built). Currently, the builder is operating under a forebearance agreement, and has sold approx 115 homes. We were promised a clubhouse, etc, after 1/2 the homes were built, but of course, under the current condition, all bets appear to be off.

In our public offering statement it makes reference to the clubhouse and that the builder will put bond or cash up for the amount to complete these items; which he has never done.

I'm guessing that we're out of luck, and just have to hope for the best, but I can't envision a scenario where the builder or his banks decide to drop $3million on us to build the clubhouse....can't see what would motivate them to do that as long as people are still buying houses; which they are.....any insight or prayers??

JohnC46 (South Carolina)
Posts: 14,265

Posted:

The builder (I assume he is also the Declarant) still has homes to sell and the last thing he would want to see are peaceful, have permit to do so if needed, etc. present homeowners holding protest signs saying like do not buy here. Handing out brochures, etc.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Are you sure that a bond wasn't established with the city/county?

McgrathH
Posts: 30

Posted:

That's a great suggestion, and we have several people ready to do that. the problem is, believe it or not, is that the majority of the people living here are afraid that if we do that, the builder goes out of business and we are left with a half-finished community for years. I think that is foolish thinking, but most of my neighbors feel that way

McgrathH
Posts: 30

Posted:

Yes, a bond was secured for PUBLIC improvements, but the recreation facilities are considered private, even though they are mentioned in our public offering docs

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Mc

I think if the buider truly beleived the street protests were being prepared, it could bring him to the table to discuss what his plans are with the newly formed So and So Clubhouse Building Committee......LOL

McgrathH
Posts: 30

Posted:

He knows that already.....we have a group and that has splintered the community. He says its out of his control and that the bank controls the $$

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You have to understand how HOA's are formed to understand what is going on with your HOA. A developer purchases for example 100 acres of land. They then divide that up to 100 1 acre lots. Sells those at 25K a piece. The developer then combines with a builder who will build 200K houses on those lots. They form the initial HOA with them in charge. The HOA concept is basically a "Sales Tool" to them. They attract buyers by selling the idea if you buy into their development that there are rules that can be enforced to hold up home values.

Now for the amenities portion...The developer MAY build various amenities like clubhouses, pools, or other recreational facilities. It is just a way to attract buyers as options. You mentioned this as part of your development offerings which has your concern. If you look at the way they earn their money, spending 20K for a pool installation is part of their investment and sales attracting. Once they turn over the HOA to the owners, all bets are off. Meaning your HOA dues are now going to the most expensive part of the development. The continued maintenance and care for the item. So be careful of hoping that they spend 3 Million dollars on a clubhouse. That's a 3 million dollar insurance policy to keep, paying for power, and upkeep.

The developer sounds like they are waiting until they get enough profits in from their sales to get around to building the clubhouse. Since they are in control they can do that. It is money coming out of their pocket NOT yours. However, it will be after it is built. So don't be in such a hurry to have it built. It could mean they raise your dues to maintain it.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Mc

Mel supplied food for thought. One reason I chose my current 113 standalone homes, HOA (not an over 55 development) was it lack of amenities. No clubhouse, no pool, no tennis, no bike paths, etc. My experience in 4 other HOS's was that the ameneties are what caused most of the issues. Cost to maintain, use of, rules/regulations, etc. To many of us believed the amenities were one big black hole we shoveled money down and did not get a good return on.

Food for thought.

McgrathH
Posts: 30

Posted:

good thoughts. i would be happy if the builder just said no clubhouse is coming....then people who are thinking of buying would know the truth....now, there's just this carrot and stick approach

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By McgrathH on 01/31/2013 10:53 AM
good thoughts. i would be happy if the builder just said no clubhouse is coming....then people who are thinking of buying would know the truth....now, there's just this carrot and stick approach

Mc

When you say clubhouse, are you referring to one builing alone versus other amenities associated/attached with it like pools, gym, etc.? If you knew there would not be such, would you have still bought there?

In the long run the best thing would be all places sold and the HOA under owner control. Let the new buyers ask their own questions and make their own decisions. The more he promises the more people you will have to go after him if he does not deliver.

McgrathH
Posts: 30

Posted:

JohnC...Yes, was to include indoor/outdoor pools, fitness center, meeting rooms, ballroom, etc. This builder had done this in several other local communities just like ours many times, but the market started to tank when ours was being built. No, i would not have bought here if I knew; i would have bought a resale in one of the other communities already completed and with the ameneties. He operates our community under its own company, so I wonder if he goes belly-up, who are we going to ga after if the company is out of business

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