Monthly PLUS Quarterly Assessments

Currently, our assessments are paid Monthly. We are thinking about changing to Monthly PLUS Quarterly. The Quarterly fee would cover direct services like water, trash, electricity, etc.

Has anyone made such an change? In your experience, what are the pros and cons?

Thanks.

NpS,

Check your CC&Rs. It might specify how assessments are charged (monthly, quarterly, semi-annual, annual). If they do specify a time frame, then you will need to amend the CC&Rs to make those changes.

NpS,

Keep it simple. Paying part of the assessments monthly and part quarterly is complicated. The more you complicate it the more delinquencies you will have. From what you have posted, I can see no reason whatsoever to assess both monthly and quarterly as the services you listed to justify quarterly assessments normally bill monthly.

If I was one of your members I would rather keep the assessments monthly so I could program my bank's bill pay feature to send out a check for the same amount on the same day of each month.

So to get this straight, you are looking at this Rube Goldberg plan to make your MLS listings look more favorable. If they don't list things correctly now, what makes you think they'll get your monthly - quarterly system correct and not confuse potential buys further? And no for the record I have never seen such a system in place, not saying such an animal doesn't exist somewhere, just that I've never seen or heard of it before.

Glen - We think that realtor errors will work in our favor rather than against us as they do now. There is a local HOA that charges M & Q fees. In a true apples to apples comparison we provide equivalent services at lower cost. But they always look better on the MLS.

Melissa - In Pa, the HOA is responsible for disclosures to Seller and Seller is responsible for disclosures to Buyer. All fees etc. are disclosed in the resale package given to selling HO. But all that happens so late in the process and the RE transfer docs are so dense that such disclosures rarely affect the initial buying decision, although they do give the Buyer an out if the Seller failed to disclose. In PA, we can amend HOA by-laws by super-majority of Board which we have. HOs can reject it by majority vote, but that is unlikely to happen. No attorney needed and HOA by-law amendments do not have to be recorded. Am very interested in your community brochure. Any way I can see one?

Np, what Melissa and others have alluded to is that generally speaking what assessments are for and how they are structured are found in the Covenants which would require a homeowner vote to change not in the by-laws. But just out of curiosity do you perhaps have a home on the market? For I can see no other reason for the Board to get so involved in home sales. It would seem to me that it would be the seller and their agents responsibility to make sure the listings were correct and to point out all of the advantages not the HOA Boards.

Comments appreciated Douglas. Worth a shot putting something together for RE companies even if unlikely to move the needle.
Glen, Board believes that our houses are undervalued, and we are taking steps to see that we are competitively positioned.
We have several houses that are vacant. Dues are being paid on all but one, so not really a financial issue. But we would rather have residents than off-site owners of vacant homes. As market improves for our homes competitively, we think that some people holding houses could be encouraged to sell. The M&Q fee structure is only one element of a larger objective to make our houses more appealing to buyers.
Re organizing docs, it is true that we will need to make changes, but all we are doing is splitting one fee into two fees, which is technically doable without too much effort.
Still very interested in seeing anything that HOAs have provided to RE companies and finding out what success has been achieved.
Thanks all.

Larry, the scope of the Board's authority and the limits on the Board's authority are what's spelled out in the CCR&Rs. Working towards improving marketability of our homes sits comfortably within those 2 boundaries. Kerry seems to understand what we are doing. We think its one of our primary objectives as a Board. It has certainly helped us reassess how we budget expenditures.

When I started this thread, I simply asked if anyone had experience with Monthlies and Quarterlies together, and if they did, what were the pros and cons. No one has stated that they had such experience. So no one can speak from experience on my questions. I appreciate the words of caution from those who didn't lecture me. For the rest, when I said that certain changes were doable, I was not being naive, just confident that we could get it done under our HOA structure.

Only one person acknowledged that the role of the Board can be to take actions to lift property values. Frankly, the vision of our Board to lift values has been extremely well received by our membership. We've been working on it for 2 years now, and we don't regret any of it. We're back to the days when our houses don't stay on the market more than a few weeks and we have people contacting us to see if anything is coming on the market. Can't figure out how anyone would find that objectionable or beyond the scope of the Board's responsibilities.

Np, I'm really not trying to kick a dead horse, you've made up your mind and that's that. I'm curious on how you plan to sell the program to the masses. Since I don't know what your assessments are, my numbers are made up but accurate for this purpose.

"Good news everyone effective 08/01/2014 your monthly assessment will drop from $150.00 per month to $100.00 per month but don't spend it on anything because every three months your assessment will be $100.00 plus $150.00 quarterly assessment. The Board hopes that this shell game will make the community even more attractive to future home buyers even though we're back to the days when our houses don't stay on the market more than a few weeks and we have people contacting us to see if anything is coming on the market."

Again someones own drum beating gets in the way of others rain dancing... This is NOT negative posting but REALITY and FACTS. The Facts are a HOA does NOT have a thing to do with Home values but witj ATTRACTING potential buyers.

Reality is that this change will mess with your bookkeping in such a way making it harder to determine late payments. It will add confusion. It also will take ALOT of work, money, time, and the vote of ALL members to change your CC&Rs.

The money your board spends is EVERY members money. The board is just in charge of handling the daily operations and budgets on their behalf. This means doing the way the people want and NOT just you.

Sorry you will not listen to those of who know better. The very people you asked their opinion of and then insult for giving it to you. Good luck cause I would never vote for such an idea that has nothing to do with what your trying to accomplish. Except to make members think their board does not listen and does what they want.

If you keep separate books for water OR trash OR electricity, I could see it as a benefit, but since you are lumping them all together, it seems silly to separate them from dues. I would agree if you had a trash only bill and billed quarterly and simply stop picking up their trash if they stopped paying. Something like that.

Just have everyone pay the same dues each month and lump every expense in there. I agree with others, its a paperwork nightmare to have multiple billing of different amounts for different lumps of services.

Larry on another post the OP says they charge a capital improvement charge to the buyer whenever the property changes hands. This in addition to the dues. Which the capital improvement charge is one time charge and is used toward capital improvements only not comingingly with the dues money collected.

Is it just me or does something seem off with their entire concept of funds collecting and use? This additionaly information on top of this post has me going along with your way of thinking. This is a board who does what they want to do with their members money and just change the name of collections. Sounds like there some card game of guess where the money is under this cup?

NpS, Some, but not all, of us pay little attention to what I'm going to call, however awkward, Melissaisms.

Occasionally, though, she has good insights.

Here comes another Melissanism... The money is supposed to come from the SAME pot for paying bills. Why separate them down the line? I mean, we have an insurance policy that we can' afford in 1 lump sum. So they split the payments up for 10 months of the year. So instead of trying to gather up 10K for the month of May when it's due, we spread the cost out throughout the year. We also do this with our lawncare. We pay them 2K a month but they only work April - October.

So don't understand why you want to add a quarterly payment to cover a separate set of costs. It seems ya are trying to sneak in a special assessment by avoiding the process. This quarterly payment idea reaks of "special assessment". Otherwise, yin's face the fact that yins have to get the vote of the members to allow a raise in dues or special assessment. Something the board can not do on their own...

Notice the "yins"? I am from PA myself. So I know a thing or two about how PA works. It's a bit different with the townships and such. However, this still seems to me yins are trying to sneak some expenses under the noses of your membership. It still makes no sense as your only to collect as much as you spend. Plus not to mention messing with your collections policies.

Richard

If we go forward with this, we will launch it at beginning of new FY. It will be fully explained in the materials we send with the budget. Tweaks to organizing docs not extraordinarily difficult. Super-majority of Board required to pass it. we have already agreed that we will pass unanimously or not at all. Majority of HOs required to defeat ratification. Am reasonably comfortable that neither vote will be an obstacle.

Have posed the question to others. Biggest downsides seem to be:
1. It will be confusing to many. Will have to go through the bother of getting people on board one at a time if needed.
2. People budget for monthly fees, but may find it harder to budget for quarterly fees. Delinquencies may be an issue for a while.

On the other hand, we got feedback from about half the community at open meetings and on the street. After we explained our objectives, no one adamantly opposed.

About 1/3 of our community come to open meetings. The last time we put the question to the community, the consensus seemed to be that, if we did water only in the quarterlies, this could be a good way to send a message that water isn't free - a message that is difficult to get across to those who think they can waste whatever they want because it's paid for in the monthlies. Carving water out specifically makes water consumption very visible to everyone.

We are working with MC right now to see how they can handle our new billing needs. So far, the word is that there will be no technical difficulties.

Sewer bills come to individual HOs quarterly. Water bill payments will be timed to alternate with sewer bills.

That's our status at present time. Could change. Will inform the Board that no feedback from this forum was positive on the idea of MplusQs.

I believe that I have addressed all of your concerns about our processes and procedures along the way in this thread Melissa. I see not reason to repeat them again.

My only comment is this:
If you are focused strictly on the outcome, you will put up procedural roadblocks to every new idea.
If you are focused strictly on the process, you will set your personal biases aside until you finish your exploration.

You and I seem to come from different camps. I don't think that's going to change.

Melissa

IMO, HOA leadership is a skill that involves looking past today's noise and figuring out what's best for the community down the road. Rules guide us for sure. But harping on rules as if they are the only thing that matters or as if they are impossible to revise as needed seems a bit short-sighted.

Thanks Steve

Interesting thought about breaking out specific costs on monthly. Already doing the test pills every 18 mos or so. Also investigating sub-metering but that would probably take us 2-3 years to implement.

John

It began a couple of years ago. We have an extraordinarily high percentage of RE professionals who live in our community. We asked them to sit down with us and explain why they chose to live in our community and how they thought we fared in the comps. What we learned is that the MLS is a hodgepodge of misinformation. We are attractive once you get here, but our "stats" cause us to get screened out from a first look on many occasions.

Our own RE professionals thought that our monthly fees were higher than two other HOAs that actually had both adopted an MplusQ fee structure. In reality, we weren't more expensive, but our own RE people thought we were. The MplusQ fee structure was discovered by a Board member who investigated what was underneath the MLS data. The MLS as it turns out only has one place to enter "Recurring Fee" and "Frequency". The listing agents for the other HOAs were only listing the Monthly.

We decided to explore what we could do to get past the first screening without being misleading. One solution is to remove water from what is included in the "recurring" monthly fee. We could reduce our Monthly by $40 and create a $120 Quarterly fee for water with a bit of initial inconvenience but no net financial effect to HO or HOA.

Even if you don't agree with the path we are considering, the exercise of learning how your HOA is positioned in your marketplace by RE professionals is enlightening. I would recommend it to anyone.

Sewer billed individually by water district. Only water is billed to HOA. Don't know why it was set up that way, but that's the way it is.
If I hear you correctly Steve, you might be amenable to splitting out water but not multiple expenses.