Growing Pains and Future Expansion

Started by BillB17 • 4 replies • 1742 views

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BillB17 (South Carolina)
Posts: 92

Posted:

I am president of a single family home HOA in South Carolina. The community presently has approximately 270 homes built out of a total of 422 lots. Recently, another company has purchased the remaining 152 lots and Declarant Rights from the original developer and Declarant.

The new company's present marketing plan forecasts selling 2 to 3 lots per month going forward. Should that happen, our community would be built out in the next 5 to 7 years.

Our Board is in the process of strategic planning for the next 5 to 10 years.

Our present amenities, particularly our pool and clubhouse, are marginally large enough for our current size, but will soon be too small to serve our projected growth over the next several years.

Our problem is that our present common properties may not be able to support the necessary expansion of the clubhouse/pool facility. A potential solution is to purchase several lots from the developer and convert them to Association Common Property and build a new facility which would contain clubhouse and other amenities which would adequately accommodate our community at build out level of 422 homes.

We intend to consult with our Association Attorneys for advice on taking this sort of action, but I would like to hear from any of you who may have had similar issues or considered or taken similar actions and what your experiences may have been.

Thank you

MikeL13 (South Carolina)
Posts: 83

Posted:

I'll be first before more knowledgeable posters come up with the best answers.

Does the Declarant have controlling votes and what is their opinion?

What do you documents say in regards to usage of lots? Houses only?

Do you have the money to buy lots and build your dream pool and clubhouse?

That is just what came to mind right off the bat. The HOA manages common property. I have not really seen any HOA in the development business.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

imo:

the HOA's only real concern should/would be the long term maintenance of the engineered storm water retention facilities (a/k/a lakes, ponds, lagoons)

dredging will be required every 20 years ~ price it now and save up

if y'all could actually afford a quasi public country club y'all would ALREADY be members

STICK TO AND PROPERLY FUND THE BASICS

a top notch small pool and clubhouse will be far preferable to a future underfunded decaying and crumbling 'McMansion' type

CAVEAT EMPTOR

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By BillB17 on 07/16/2014 9:32 AM
I am president of a single family home HOA in South Carolina. The community presently has approximately 270 homes built out of a total of 422 lots. Recently, another company has purchased the remaining 152 lots and Declarant Rights from the original developer and Declarant.

The new company's present marketing plan forecasts selling 2 to 3 lots per month going forward. Should that happen, our community would be built out in the next 5 to 7 years.

Our Board is in the process of strategic planning for the next 5 to 10 years.

Our present amenities, particularly our pool and clubhouse, are marginally large enough for our current size, but will soon be too small to serve our projected growth over the next several years.

Our problem is that our present common properties may not be able to support the necessary expansion of the clubhouse/pool facility. A potential solution is to purchase several lots from the developer and convert them to Association Common Property and build a new facility which would contain clubhouse and other amenities which would adequately accommodate our community at build out level of 422 homes.

We intend to consult with our Association Attorneys for advice on taking this sort of action, but I would like to hear from any of you who may have had similar issues or considered or taken similar actions and what your experiences may have been.

Thank you

Just to put a spin on things, how do you know that your pool and clubhouse will be too small? Are they getting a lot of use? What do you use your clubhouse for in particular? I live in a similarly sized community and I can tell you that our very small clubhouse sees very little action considering the size of our community. When the bloom fell off the rose, a lot of owners were no longer excited about a pool or a clubhouse. Are those lots you want to buy zoned for residential and what would need to be done to convert them to common area? You would also need to figure out what it would cost in terms of assessments.

GlenL (Ohio)
Posts: 5,491

Posted:

Bill have you run the numbers at all? Remembering the old adage about counting the chickens before the eggs are hatched, you can't count on the proposed assessments until they come due, so figure you and your current fellow homeowners paying for everything at least for a while. Property, architect, permits and the construction itself will depending on costs in your area run maybe a million, if you're lucky you can get a 10-15 year note. Divide the cost by the number of homes 420 (since you'll need at least two lots and assessments go up around $159.00 on to of everything the HOA is currently paying for. Plus with a larger pool, you will probably need to hire lifeguards, check local pool regulations and what do you plan to do with the current facilities, maintain them or raze them?

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