Buying Land with (not from) HOA

Welcome.

Good explanation. Makes sense.

How much per household would it cost? Do you have the funds or would you need a special assessment? If needed, could you borrow funds from reserves and be able to pay it back?

To "sell" your idea to the community, I think you'll need some kind of plan to change how the land is being used. That will cost more money? And it will take time. Are you ready for all the questions?

Thanks for the reply. I should really stress that this very much a "pie in the sky" idea that I'm 99.9% sure will never come to fruition. But it never hurts to have all the facts/info as sometimes far-fetched ideas can become reality - like when you're facing down the barrel of having your street turn into a drag strip.

Very much in the infancy of doing research as I'm not even sure how the loan process or a special assessment for vacant land works - let alone doing it through HOA funds - as I imagine the HOA doesn't have nearly the reserve to cover the cost.

Current dues are ridiculously minimal at $75/annual/home which covers the maintenance of a very small communal space at the entrance. Rough estimates for the cost of the land/loan over the amount of homes comes to roughly $450/annual/home. Obviously a huge jump and a hard pill to swallow but, given home values (and the volume at which people complain about said field), it's an easy assumption that most people could afford it and really nothing else is needed in the neighborhood.

As far as land use, I imagine that having a common space, pavilion, park, etc would be optimal but obviously an additional cost. At this point, I'm purely looking at something like this as purely a preventative measure.

At minimum, it would be nice to have ammunition for the "let it go/deal with it" side of the debate as almost every...single...household complains about the dirt bikes and teenagers (incessantly). A way to say "put your money where your mouth is on a solution or zip it" ;)

Playing devil's advocate here (and in the OP's place, I'd also be thinking about buying the land):

* Do you know why no one has purchased the land before now? I'd want to know that before moving ahead with plans to buy it myself.

* Your HOA would now be responsible for insuring and policing the land. The partyers and bikers won't go away unless the property is made inaccessible in some way, and without police protection, the burden will fall on the HOA.

* What are your plans for the land, if any? What are the tax implications? Is it zoned commercial, residential, or mixed? Can this be changed?

* If the land is developed, would there be a way to provide access without having your community become a cut through to the highway?

There is probably some other pitfall that I haven't thought about...

Cathy

In our HOA, we do not need a member vote to buy land, only sell land. We have done extensive research on this since we looked into it this year as well. Look into grants to reforest land, that was what we were going to do to defray the cost of purchasing it. You have to agree to plant trees and return it to nature never to be developed. That would prevent bikers and maybe partiers. We could get a loan against assessments and we surveyed the community and a high percentage agreed to the purchase. In the end we did not, we lost out.

I would if I owned the property and had a high-enough net worth to be an attractive target for a lawsuit.

If I was in that demographic I wouldn't be living in a place that had no police force.

As for avoiding the road becoming a cut-through, a gated entrance/exit is simple enough.

I know this is 2 years old but we are having this same discussion right now so I'm looking for info. I'm on the board of an HOA with 379 homes and $460 annual dues. We have a large community pool and little else in our neighborhood. There are 8 acres or undeveloped land attached to our neighborhood that is available to purchase. The word is a nearby campsite owner is considering buying but there are other possibilities.

I would like to evaluate the possibility of the HOA buying this land. First and foremost, it would give us a say in what, if anything, gets done there. Cost would be around $300k so about $750 total per homeowner. We could buy it and do nothing and, I believe, we've avoided any decreasing home values that might occur if undesirable development is done. Again, this is all speculation but I believe the possibility is real. It would first affect those homes directly connected to the area, but would flow through the entire neighbhorhood eventually.

My thought is to approach the homeowners and ask if they feel there is anything that could be done there that might lower their home value by $750. If the answer is yes, we should consider buying it.

After we buy it, we know there is annual maintenance expenses for taxes and mowing the grass.

Long term we could consider lots of things like a dog park, community garden, basketball court, tennis court, boat/rv storage, etc. All of these would cost money and should be considered separately from the purchase decision.

I'm not seeing anything in our by-laws or covenants that specifically call this out. I see 2 items in the by-laws that seem to support the board's ability.

Article III, PURPOSE AND POWERS OF THE ASSOCIATION , starting on page 3 of by-laws

Section C - Acquire (by gift, purchase or otherwise) own, hold, improve, build upon, operate, maintain, convey, sell, lease, transfer. or otherwise dispose of real or personal property 'including, but not limited to the Common Area as determined advisable by the Board of Directors;

Section D - Borrow money, mortgage, pledge, deed in trust, or hypothecate any and all of its real or personal property including, but not limited to, the Common Area, as security for money borrowed or debts incurred upon arrival by the affirmative casting of two-thirds (2/3) of all Class A and B votes of the Association;

We will obviously engage our attorney on the details but curious what the original poster ended up doing and what experiences others have with this type.

Things I'm trying to determine:
* can the board vote to buy this property or does it require membership vote
* if it can be purchased, how do we go about doing it? one-time special assessment, multi-year special assessment, or a loan?

Curious what others think.

Check the documents establishing your HOA. I know our Association cannot own property or make capital improvements without 100% agreement. Even in your relatively small association I suspect 100% will be a tough goal to achieve.

Without looking beyond your question John, I would say that the land itself would not be a capital improvement. Anything built on the land would be.

What makes you say it would require mortgage holders approval? I have seen this argument before and rarely is it true especially in the case of improvements versus something that decreases value.

Not much of an answer.

I was an owner of a townhouse in MA when the BOD came out with a list of improvements a owner could make without BOD approval ala larger windows, deck awnings, etc. One owner, a PM at a high rise building, objected and said mortgage holder approval must be gotten. The HOA lawyer basically said, as long as they were improvements, mortgage holder approval was not needed. When questioned, the lawyer said if you were reducing the value of a home then mortgage company approval could be needed as you were reducing the "equity" the mortgage holder held.