Addequate Amenities

Started by JoeB18 • 16 replies • 1671 views

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JoeB18 (Georgia)
Posts: 31

Posted:

I reside in a community that is planned to be 500 homes. We are currently controlled by a
developer controlled POA and a non homeowner run board of directors.
My concern is that the amentities we have are lacking and undersized
for the community. We have a pool with a max bathing capacity of 90 people
and a tiny playground. How do the homeowners increase the amenities? Can we hold
the developer responsible? I do know he is in active negotiations with two builders on building out 120 additional
lots. Should the homeowners reach out to the two builders concerning the amenties?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe

Remember the more amenities the higher your dues will have to be to cover the expense of operating such and I mean after the developer turns the association over to the owners.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Exactly what JohnC said. The more amenities the more expense you the owners will face at turnover. Plus you have to put in insurance expenses to cover those amenities. Not cheap. Keep in mind amenities are going to be your HOA's LONG term expense. Which means maintenance, replacement, improvement, and other expenses will be past down to you all to pay after turn over. So do you really want amenities that you all won't be able to afford 10 years from now?

BTW: We have 107 homes and a small pool/clubhouse. The use of which is so little that many of our owners want to bury the pool in. Not enough pool or clubhouse use for it to be such a big expense. We paid someone in summer months to take care of the pool with chemicals/general maintenance. Plus any expenses for repairs/maintenance/replacements. The pool can sometimes cost $500 a month in just general care/maintenance/water/chemicals.

Former HOA President

JoeB18 (Georgia)
Posts: 31

Posted:

I appreciate everyone's help and advice. Our POA fee is currently $600 a year. I agree adding additional amenities come with a tradeoff but I think with 500 houses we should be good. Our operating expenses currently aren't that much even with a small Pool, playground, common areas and bathroom facilities.

I am just trying to quickly work the Developer to pay for these amenities now instead of the HOA in the future having to find financing for this venture. With 500 houses and that POA fee i think that would give us proper financial legs to cover expenses.
What are your thoughts on this?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sorry it doesn't work that way. The developer makes their money up front. Example: The developer buys 100 acres of land and then sales them for 100K a piece. They then team up with a builder who then will build $500K houses on that lot. To attract buyers to this development they promise to put in amenities buyers want. They also form the HOA/POA to attract and also maintain the development once they leave.

Well putting in a $25K pool and building a $100K clubhouse structure is basically the price of doing business for a developer. Without them they may not sale a home/lot. However, the long term maintenance expense is where the "real" expense is for these amenities. Well guess what? The developer doesn't care once they sell. That's the new owner's bills. The new owners being the owners.(HOA).

The response from the developer in requesting bigger amenities or taking on additional expense? Go pound sand! They did what they were supposed to do. Put in a pool and clubhouse. You want it to be taken care or expand it? That's going to be on the next person's priorities NOT theirs.

My recommendation? Find out the real expense involved in maintaining these amenities. At turnover, knowing the expenses your going to face will allow you to adjust the dues adequately. Right now you the member are not doing much or any contribution to purchase of these amenities. Your just basically waiting to inherit them.

Former HOA President

JoeB18 (Georgia)
Posts: 31

Posted:

Thank you for the response. I kind of figured there was really nothing we can do. So if they decided to add an additional 125 house to the community they
Would have no interest in adding additional amenities due to the expansion? Keep in mind the developer is not the builder in this case. I know for a fact the
developer is currently negotiating with 2 companies to build out the additional lots. What if I contacted the prospective builders and planted the idea about needing additional amenities to accommodate the 500 plus houses to help increase the sale prices?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You can always suggest it. However, the Developer won't see it much of a "money maker" unless they see a demand from potential buyers. They may have to give up another lot to accommodate more amenity. Which is another lost home sale to them plus the amenity cost.

Does your HOA allow someone to install their own pool? That is another factor why pool may not be that much attraction. If you can have your own, most likely not going to go to the public one down the road.

Former HOA President

JoeB18 (Georgia)
Posts: 31

Posted:

backyard pools are not allowed that this time. My thought is that the builders could push the Developer
to add a pool to enhance the sale value of the additional 125 house. We are not an HOA right now but a developer run POA.
It just downs feel right that we will have 500 house and a tiny playground and a 90 bather pool capacity. Seems so small and underwhelming.

GenoS (Florida)
Posts: 4,276

Posted:

Melissa is right that developers will only put in whatever amenities they think will help them sell homes. My subdivision was originally planned to be 102 homes. When sales started out slow the developer took a look around to see what other developments were doing amenity-wise. They found out that tennis courts seemed to be a big draw and eliminated 2 lots in favor of tennis courts. This was 2 years after the developer swore he would never build tennis courts because they were too expensive. When a few more home sales beckoned he changed his tune.

JoeB18 (Georgia)
Posts: 31

Posted:

In the examples you guys detail was the developer also the builder? In my situation
the developer and builder are two separate entities not tied to each other.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Developer and builder are usually separate although can also be the same company. If that makes sense. They may have a company that develops land. That same person may then also own a building company. It can also be that you can hire your own builder as long as you stay within the guidelines of the developer. Each HOA/POA is different. I would say a POA would fall under Developer with a separate builder definition. That builder just may work exclusively with that development.

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By GenoS on 08/19/2017 8:20 PM
Melissa is right that developers will only put in whatever amenities they think will help them sell homes. My subdivision was originally planned to be 102 homes. When sales started out slow the developer took a look around to see what other developments were doing amenity-wise. They found out that tennis courts seemed to be a big draw and eliminated 2 lots in favor of tennis courts. This was 2 years after the developer swore he would never build tennis courts because they were too expensive. When a few more home sales beckoned he changed his tune.

And on the other hand, the developer/builder of my community put in a clubhouse and pool - there were supposed to be 200 homes, but developer 1 went bankrupt, as did developer 2 - we ended with 156 townhomes.

Around the time I moved her in 2001, usage of the pool had begun decreasing and the costs were going up(the community's 46 years old now). The board had talked about closing it for good, but some hesitated, fearing we'd take a hit in property values. Three years after I joined the board, the numbers hadn't improved and there had been several incidents of bad behavior (people getting into fights and some kids throw the last remaining fish from the retention pond into the pool!) We decided to close the pool for a year due to pressure on the operating budget, but polled the homeowners first to see how they'd react. Most didn't say anything and the few who did said they were ok with closing it, so we did. That later prompted us to recommend to the homeowners that we take a vote to close the thing permanently after it remained closed for about 4 years and of course its condition had slowly deteriorated to where we'd need a special assessment to fix it and the board knew no one would approve it. It took us about 18 months, but we did get the votes to close it for good, and that was that.

Your community might not have these issues if it gets built out to 500 homes, but this is a cautionary tale from the other side. What you might want to do is ask that a poll is taken to see what current homeowners think about the amenities now. Should they be expanded or not, and if so, what would they like to see (some may be more interested in a bark park for their pets). From there, the developer can decide, or keep things as is until the homeowners take over and then revisit the issue at that time.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By SheliaH on 08/20/2017 10:46 AM
And on the other hand, the developer/builder of my community put in a clubhouse and pool - there were supposed to be 200 homes, but developer 1 went bankrupt, as did developer 2 - we ended with 156 townhomes.

This can also be a problem. Usually some county department will have to approve site plans and a plat before building can commence. The developer is committed to putting in whatever amenities are called for in the site plans, and if he does not build them then the county might have something to say. The problems get sticky when developers go bankrupt.

The subdivision south of mine has been under construction for 20+ years. 4 different developers have gone bankrupt, one of them twice due to the way developers weasel their way through the forest of corporate entities, liability for debts, and the bankruptcy laws. I imagine all sorts of unanticipated wrinkles pop up in those cases. Original developer promises a clubhouse and goes bankrupt. Is the new developer or builder on the hook to build the clubhouse? There's no simple answer. The courts may have discharged that responsibility and liability along the way, with or without the concurrence of the existing homeowners and county government.

It's why many people do not recommend being an early buyer in a new community that will be governed by an HOA.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe

There are many cases of a developer not delivering what was promised. Many will not buy in an association until all promised amenities are in place. Many want no amenities.

Have your promised amenities been delivered? If yes, what is your issue?

HomE (Washington)
Posts: 29

Posted:

Quote:

Posted By JohnC46 on 08/19/2017 6:04 AM
Joe

Remember the more amenities the higher your dues will have to be to cover the expense of operating such and I mean after the developer turns the association over to the owners.

That's really overstated. Some amenties, like a movie room, social area, etc, really don't require much upkeep. The developer just has to be willing to give up the space.

The real question here is for the OP to decide if this is really somewhere where they want to live. The builder is cutting corners on amenities. Where else are they cutting corners? Probably best to move elsewhere.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By HomE on 08/24/2017 9:13 PM

That's really overstated. Some amenties, like a movie room, social area, etc, really don't require much upkeep. The developer just has to be willing to give up the space.

That is really understating.

To me, that is like saying your home doesn't require much upkeep.
Although such a statement may be true for a new home, as the home ages, the upkeep costs will escalate.
This will be the same for amenities.

Amenities will require maintenance, repair and replacement over the years.
The Association should have a Reserve fund for this.
The more amenities, the larger the fund will need to be.
Since Reserves are funded by assessments, the larger the funding requirement, the larger the assessment requirement.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JoeB18 on 08/19/2017 3:20 AM
I reside in a community that is planned to be 500 homes. We are currently controlled by a
developer controlled POA and a non homeowner run board of directors.
My concern is that the amentities we have are lacking and undersized
for the community. We have a pool with a max bathing capacity of 90 people
and a tiny playground. How do the homeowners increase the amenities? Can we hold
the developer responsible? I do know he is in active negotiations with two builders on building out 120 additional
lots. Should the homeowners reach out to the two builders concerning the amenties?

How much more do you want to pay in association fees??? Have you had more than 90 people in your pool??? The developer is building a pool area, playground, etc. as noted in his contract (probably filed as an SIA - Sight Improvement Agreement) with your local government. Following that agreement and your CCR's is all the developer is responsible for providing. If the Owner's want something more ... YOU need to provide it and PAY for it.

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