Homeowners’ associations should be abolished

JohnS111 (New York)
Posts: 228

Posted:

The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

What about:
private roads?
Wetlands?
Storm water management?
Playgrounds?
Security Lighting (street lights)?
Services (trash, snow removal, leaf removal, etc.)?
Gated communities?

JohnT38 (South Carolina)
Posts: 1,631

Posted:

My daughter is young and has three kids. She lives by choice in an HOA that provides amenities such as a pool, tennis courts, gym and a playground. For her it makes perfect sense.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By TimB4 on 03/21/2023 1:27 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

What about:
private roads?
Wetlands?
Storm water management?
Playgrounds?
Security Lighting (street lights)?
Services (trash, snow removal, leaf removal, etc.)?
Gated communities?

Outside of gated, all these were provided with the property taxes you paid by the local municipalities.

JohnS111 (New York)
Posts: 228

Posted:

Quote:

Posted By JohnT38 on 03/21/2023 1:33 PM
My daughter is young and has three kids. She lives by choice in an HOA that provides amenities such as a pool, tennis courts, gym and a playground. For her it makes perfect sense.

Sure. Let people voluntarily join the pool and pay membership dues if they voluntarily join.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 2:13 PM

Posted By JohnT38 on 03/21/2023 1:33 PM
My daughter is young and has three kids. She lives by choice in an HOA that provides amenities such as a pool, tennis courts, gym and a playground. For her it makes perfect sense.

Sure. Let people voluntarily join the pool and pay membership dues if they voluntarily join.

You have obviously made up your mind and closed the book on this subject. What was the point of the post?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 2:13 PM

Posted By JohnT38 on 03/21/2023 1:33 PM
My daughter is young and has three kids. She lives by choice in an HOA that provides amenities such as a pool, tennis courts, gym and a playground. For her it makes perfect sense.

Sure. Let people voluntarily join the pool and pay membership dues if they voluntarily join.

The economy of such could work sometimes but not always. It is like saying those with no kids should not pay taxes to support schools. A rather narrow view.

KerryL1 (California)
Posts: 14,550

Posted:

Given the purpose of this forum, that JohnS111 may wish tor views way above, I have no idea why he has posted anything, let alone this one.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

State legislatures and municipalities continue to believe HOAs reduce the amount of tax dollars that have to be spent on issues like code enforcement, drainage et cetera.

You do realize that it's common for municipalities to require new subdivisions to be HOA-governed, right?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

HOA's were created by developers as "Sales tools". They were created to give buyers a certain additional feeling of "ownership" where they could make sure everyone was keeping up with the Jone's. What better way to offer you amenities like pools, tennis courts, private roads, and making sure your neighbor does not put an "outhouse" in their front yard? The American dream! Plus you are promised the role of "ownership" after the developer/owner is gone. "Free" to create along with your neighbors your own "domain".

However, many people fail to understand how HOA's work and function. They do not realize they are in a corporation. A HOA is incorporated so it has the powers to collect dues and other legal aspects of shared property. Your basically a "Stock holder" in your neighborhood with the option of becoming CEO...

Once you understand what a HOA is and does for your community, then you will get off the "I HATE HOA's" bandwagon. Education is key. That is the overall purpose of this website and the advice given. To EDUCATE why a HOA is what it is and why.

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By MelissaP1 on 03/21/2023 3:11 PM
HOA's were created by developers as "Sales tools".

Maybe covenants were created as relatively modern sales tools, whereby the covenants were designed to keep out certain demographics (like Catholics, Italians, Jews, Asians and Black people). But HOAs for the last few decades have been required because municipalities require them, saving the taxpayer money. (So City Councils and County Commissions thought. Those with the court system may beg to differ.)

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

I tend to agree that more problems can arise from living in an HOA than not. I believe it is because they are most often run by volunteer owners who are not competent enough to run an Association. Abolishing them all is pretty extreme. Some owners like that extra layer of rules and regulations. They also like the amenities some of them offer. Personally, I do not. I live in an HOA with few rules, architectural and otherwise. The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it. Some people believe that HOA's help to raise or maintain property values. I have seen no real evidence that that is true.

We all have choices; where we buy a home and what we can financially afford. Home buying is so complex and what we can afford is usually the top priority. We often have to compromise on what we choose. No home is perfect and we have to decide on what we can live with and what we are willing to compromise on.

At one point in my life, I stated that I would never buy a home in an HOA ever, ever again. I did not have a pleasant experience in my previous home in an HOA. But alas, I am living in one. But it's working out so far. So far no regrets.

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By ElleN on 03/21/2023 3:41 PM

Posted By MelissaP1 on 03/21/2023 3:11 PM
HOA's were created by developers as "Sales tools".

Maybe covenants were created as relatively modern sales tools, whereby the covenants were designed to keep out certain demographics (like Catholics, Italians, Jews, Asians and Black people). But HOAs for the last few decades have been required because municipalities require them, saving the taxpayer money. (So City Councils and County Commissions thought. Those with the court system may beg to differ.)

Today I watched an interesting documentary titled "10 Towns That Changed America." It was about some towns in America that were specifically designed to "improve the lives of residents by design." What really caught my attention was that in Levittown, NY, Black people were not allowed to buy property there. That was the original intent of HOA's as you stated ElleN, not sales tools. There are some documentaries specifically about Levittown, NY.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By ElleN on 03/21/2023 3:41 PM

Posted By MelissaP1 on 03/21/2023 3:11 PM
HOA's were created by developers as "Sales tools".

Maybe covenants were created as relatively modern sales tools, whereby the covenants were designed to keep out certain demographics (like Catholics, Italians, Jews, Asians and Black people). But HOAs for the last few decades have been required because municipalities require them, saving the taxpayer money. (So City Councils and County Commissions thought. Those with the court system may beg to differ.)

NO, they are not saving the taxpayer money, it is their form of double taxation. Your property tax contribution is the same whether you live in an HOA or not.

MaxB4
Posts: 3,513

Posted:

I believe condos, townhouses, or units that are attached should be mandatory, while detached units should be volunteering. Maybe only the rich can afford to live within a gated community, and so be it.

ElleN (Idaho)
Posts: 4,420

Posted:

LayaS, I said discriminating against certain groups was the original intent of //covenants//. HOAs are a different issue.

I do not think Levittown ever had HOAs. It just had covenants.

To me the distinction seems worth noting. But that's just myself.

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By ElleN on 03/21/2023 4:45 PM
LayaS, I said discriminating against certain groups was the original intent of //covenants//. HOAs are a different issue.

I do not think Levittown ever had HOAs. It just had covenants.

To me the distinction seems worth noting. But that's just myself.

Please excuse my misstating what you wrote. After further research, you are correct that Levittown did not have an HOA but restrictive covenants. I'm pretty sure the documentary used the term HOA in reference to Levittown, NY but I didn't take notes.

The point is that America's first suburb of Levittown prohibited Black people from buying property in this community. I often think of HOA's and covenants going hand in hand. I know that is not always the case. But those terms are often thought of in the same realm.

ElleN (Idaho)
Posts: 4,420

Posted:

No dispute, LayaS. I agree Levittown is often referred to as a "HOA."

I happen to think giving owners joint ownership of common area via being shareholders in a corporation is a rather profound development, occurring sometime after Levittown. I do not know when.

Levittown had community pools and parks, didn't it? I think the pools and parks got turned over to the towns at some point?

I think there's still a redneck element out on Long Island, unfortunately. It may very well have a basis in those Levittown discriminatory covenants of almost 100 years ago.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I watched the same documentary. I think no one enforced those rules if story I am thinking of.

Former HOA President

GuyM1 (Ohio)
Posts: 318

Posted:

One of the biggest problems that I see is the ignorance of people on the board not understanding the CC&Rs. They seem to do what they think is right and end up losing lots of money for the members. I've had several board members call themselves King of my Kingdom or I know what I'm doing to all come crashing down on them as they run and hide. An HOA can be a good thing to upkeep the property but some board members think that they can use the common area around your unit as yours but in fact, it belongs to all. Boards thinking is that they don't need to fix the common area around your unit because they think that is yours and a way to punish you. In my case, the board should only take care of snow, grass cutting, and architecture to keep things up. But the common areas around the units should be given to that unit's owner and not the responsibility of the Association. This would allow owners the right to take care of the outside and not have the need to take the association to court which ends up costing everyone. I find it would be cheaper to have the owners insure their property than have Association pay huge amounts in insurance. HOA will still need some insurance but shouldn't cost an arm and leg. This isn't right for all HOA but I feel small HOAs should not be in total control as board members can treat an owner badly just because they don't like them.

CathyA3 (Ohio)
Posts: 6,299

Posted:

My main issues with HOAs/COAs:

* Owners are the financial and legal partners of every other owner in that association. Very few understand the implications of this until something blows up in their faces.

* HOAs/COAs allow local municipalities to offload their responsibilities onto private citizens. This is inefficient at best. It also benefits those who do not living in a community association, since these people enjoy what amounts to a tax cut, while the HOA/COA owner "enjoy" what amounts to a tax increase. Max is 100% correct that this latter group will not see their taxes decrease in exchange for taking on responsibilities that used to be handled by the local taxing authority.

* The upshot of this is that maintenance of various communities within an area can be widely variable. People living in the well-maintained communities may believe that the blighted area a few miles down the road will not affect them. They are wrong. Elected officials may also believe that they won't have to deal with the consequences of this. They are also wrong. In the long run, I think this process amplifies economic inequalities, and this is not good for society as a whole.

Unfortunately the results of this may take years to make themselves known. Therefore, nobody has any incentive to change things.

I take it as read that the HOA/COA racket is well and truly entrenched. Too many big money interests benefit from it, and too many people think that they don't have to pay for stuff. (They are also wrong.) I also take it as read that people have to learn the hard way, and often not even then. [Aside: It would be very interesting to learn how many shaky condo associations in Florida are busy shoring up their structures and finances. I bet it's not many, although I'd like to be wrong about that. It's going on two years now since a building collapsed and killed a bunch of people - plenty of time to forget or pretend that it won't happen to you.]

Long story short: community associations aren't going anywhere. The best people can do is refuse to live in one - at least they'll enjoy a stealth tax cut.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

Be aware of the politicians you elect, they are the ones that pass laws that state all new home developments must be in an HOA

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By MaxB4 on 03/21/2023 4:21 PM

Posted By ElleN on 03/21/2023 3:41 PM

Posted By MelissaP1 on 03/21/2023 3:11 PM
HOA's were created by developers as "Sales tools".

Maybe covenants were created as relatively modern sales tools, whereby the covenants were designed to keep out certain demographics (like Catholics, Italians, Jews, Asians and Black people). But HOAs for the last few decades have been required because municipalities require them, saving the taxpayer money. (So City Councils and County Commissions thought. Those with the court system may beg to differ.)

NO, they are not saving the taxpayer money, it is their form of double taxation. Your property tax contribution is the same whether you live in an HOA or not.

For the most part Laws that mandate HOA's pass the onus of code enforcement to the HOA instead of the local municipality until laws that are passed that stop HOA's
from enforcing said covenants because the whiny people want neighborhoods to look like a pig sty.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

There are good and bad to HOA's. It depends on a lot on how you make it. The end result often comes back to you. Do you participate? Do you follow the rules? Do you want to be on the board? Are you still developer controlled/owned? The power is in how you participate and do in your HOA.

It should be noted that when I lived in my HOA $50 a month of dues I got access to a swimming pool, garbage pickup, recycling, lawncare, and ability to enforce rules against violators. Outside of my HOA? I had to pay $13 for garbage pickup. No swimming pool access. ($125 membership fee for local pool). Recycle was free but once a month not anytime. Lawncare was $50 every two weeks. If my neighbors violated the rules/laws, I had to go to the City to enforce.

So a HOA has advantages and disadvantages. You decide.

Former HOA President

RogerJ1 (Texas)
Posts: 550

Posted:

I used to be in favor of HOAs in general, but I think that in my state, and I assume in many other states, HOAs weld more power than can be trusted to a board of volunteers. I think HOAs' power on violation fining/curing procedures and foreclosure ability should be severally limited. Overall, I think HOA power should be limited to simple actions, and then if an issues needs bigger actions - do it through suits no HOA direct action. I.e. let HOAs take care of the little things and let the big things take care of themselves as warranted.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Realistically, HOAs will likely not be abolished.

There are certainly pros and cons to the existence of HOAs.

I doubt this thread will change anyone's opinion on the topic.

BillD16 (Texas)
Posts: 973

Posted:

Quote:

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

There was a time not so long ago when I agreed with you 100%. But since I started serving on an HOA Board, I've come to realize just how necessary they are for maintaining landscaping, the pool, the common areas, stepping in to handle various messes and emergencies (we had a house burn to the ground several years ago; luckily we had a talented BOD who jumped on it and cleaned it up before vermin took it over), etc.

The HOA system is far from perfect, especially if the wrong people are running it. And there are inevitably neighborhood busybodies who try to twist the system to their own ends. And I am myself not a big fan of excessive violation enforcement ... I could go on, but in short, I think it's a flawed system that is still better than nothing. Personally, I think I'd rather live somewhere out in the boonies (and I may yet do that). But when you've got a lot of people living in homes close together, and especially if they've got some kind of shared amenity like a community pool, you *need* some entity that pays attention to the needs of the community.

JohnS111, have you ever served on a HOA Board? If not - try it sometime.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By LayaS on 03/21/2023 3:45 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
Otherwise, homeowners’ associations should be abolished.
They cause more problems than they solve.

The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it.

I agree the number and severity of problems resulting in people loosing their homes is beyond the pale.

How did the board get to the point where dues dropped more than 50%? Were the reserves totally funded and some smart treasurer state that there was no reason to collect so much money? My HOA finances are getting to that point. We have a front entrance and a park, that hardly anyone uses maybe 10% of the membership uses the park sporadically.

We could easily drop membership dues 10% to 30%, any tips for that?

vis ta vie

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By WendyM5 on 03/22/2023 5:27 PM

Posted By LayaS on 03/21/2023 3:45 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
Otherwise, homeowners’ associations should be abolished.
They cause more problems than they solve.

The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it.

I agree the number and severity of problems resulting in people loosing their homes is beyond the pale.

How did the board get to the point where dues dropped more than 50%? Were the reserves totally funded and some smart treasurer state that there was no reason to collect so much money? My HOA finances are getting to that point. We have a front entrance and a park, that hardly anyone uses maybe 10% of the membership uses the park sporadically.

We could easily drop membership dues 10% to 30%, any tips for that?

There is only one amenity and that is the entrance sign and the landscaping around it. We are still under developer control too. The developer's spokesperson said in a letter that there was no reason to collect more than that. I am speculating that the city made an arrangement with the developer to keep dues low. I have no proof of that. I do know that the city conducted a study and the city had a shortage of housing and encouraged development.

JohnS111 (New York)
Posts: 228

Posted:

Quote:

Posted By BillD16 on 03/22/2023 3:54 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
The only time a homeowners’ association is needed is when there is a multifamily building, since the building structure needs to be maintained.

Otherwise, homeowners’ associations should be abolished.

They cause more problems than they solve.

There was a time not so long ago when I agreed with you 100%. But since I started serving on an HOA Board, I've come to realize just how necessary they are for maintaining landscaping, the pool, the common areas, stepping in to handle various messes and emergencies (we had a house burn to the ground several years ago; luckily we had a talented BOD who jumped on it and cleaned it up before vermin took it over), etc.

The HOA system is far from perfect, especially if the wrong people are running it. And there are inevitably neighborhood busybodies who try to twist the system to their own ends. And I am myself not a big fan of excessive violation enforcement ... I could go on, but in short, I think it's a flawed system that is still better than nothing. Personally, I think I'd rather live somewhere out in the boonies (and I may yet do that). But when you've got a lot of people living in homes close together, and especially if they've got some kind of shared amenity like a community pool, you *need* some entity that pays attention to the needs of the community.

JohnS111, have you ever served on a HOA Board? If not - try it sometime.

Bill

Yes, I served on a HOA board. Most of the other board members had no knowledge of how to run a business or what the governing documents of the HOA required. They simply deferred to the HOA’s property manager, who also served on the board and extracted tens of thousands of dollars from the HOA in additional “fees” and went after owners who questioned that. It was a large business run by complete amateurs and a greedy property manager. Just what could possibly go wrong?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By LayaS on 03/22/2023 5:46 PM

Posted By WendyM5 on 03/22/2023 5:27 PM

Posted By LayaS on 03/21/2023 3:45 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
Otherwise, homeowners’ associations should be abolished.
They cause more problems than they solve.

The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it.

I agree the number and severity of problems resulting in people loosing their homes is beyond the pale.

How did the board get to the point where dues dropped more than 50%? Were the reserves totally funded and some smart treasurer state that there was no reason to collect so much money? My HOA finances are getting to that point. We have a front entrance and a park, that hardly anyone uses maybe 10% of the membership uses the park sporadically.

We could easily drop membership dues 10% to 30%, any tips for that?

There is only one amenity and that is the entrance sign and the landscaping around it. We are still under developer control too. The developer's spokesperson said in a letter that there was no reason to collect more than that. I am speculating that the city made an arrangement with the developer to keep dues low. I have no proof of that. I do know that the city conducted a study and the city had a shortage of housing and encouraged development.

Developers definitely like to keep assessments artificially low in order to increase sales, even if there is no formal arrangement with the city. In one community I live in, the developer negotiated an easement agreement that allowed residents to use an access road to get to the main highway, in exchange for which the association was totally responsible for maintaining that access road. Surprise! This significant expense was never accounted for in the budget or reserve studies. Guess what happened to assessments after this news was uncovered...

Regarding this comment: "The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it." ...

Keep in mind that assessments cover much more than maintaining amenities, and a number of them result from the fact that you're running a multi-million dollar business. These can include:

* infrastructure maintenance (streets, lighting, utility lines)

* insurance (a large expense which includes things like liability, casualty/fire/other extended coverage, fidelity/employee dishonesty which protects your financial assets, directors & officers insurance, and worker's comp or similar if you use volunteers)

* bookkeeping/accounting and tax prep

* "payroll" (community manager or others you hire to deal with day-to-day tasks of running an HOA)

* admin (estoppel letters and other activities associated with new buyers, enforcement expenses, printing/mailing costs, meeting space rentals if you don't have meeting space in your community, routine communications with owners including a website)

* legal (dealing with delinquencies/liens/foreclosures as well as routine legal matters)

These "hidden" expenses really add up.

If assessments dropped in an aging community that is currently dealing with inflation, country-wide increases in insurance premiums, and probably increasing delinquencies since these tend to rise when the economy gets shaky, as a homeowner I would be VERY worried and would be taking appropriate steps.

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By CathyA3 on 03/23/2023 5:38 AM

Posted By LayaS on 03/22/2023 5:46 PM

Posted By WendyM5 on 03/22/2023 5:27 PM

Posted By LayaS on 03/21/2023 3:45 PM

Posted By JohnS111 on 03/21/2023 1:16 PM
Otherwise, homeowners’ associations should be abolished.
They cause more problems than they solve.

The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it.

I agree the number and severity of problems resulting in people loosing their homes is beyond the pale.

How did the board get to the point where dues dropped more than 50%? Were the reserves totally funded and some smart treasurer state that there was no reason to collect so much money? My HOA finances are getting to that point. We have a front entrance and a park, that hardly anyone uses maybe 10% of the membership uses the park sporadically.

We could easily drop membership dues 10% to 30%, any tips for that?

There is only one amenity and that is the entrance sign and the landscaping around it. We are still under developer control too. The developer's spokesperson said in a letter that there was no reason to collect more than that. I am speculating that the city made an arrangement with the developer to keep dues low. I have no proof of that. I do know that the city conducted a study and the city had a shortage of housing and encouraged development.

Developers definitely like to keep assessments artificially low in order to increase sales, even if there is no formal arrangement with the city. In one community I live in, the developer negotiated an easement agreement that allowed residents to use an access road to get to the main highway, in exchange for which the association was totally responsible for maintaining that access road. Surprise! This significant expense was never accounted for in the budget or reserve studies. Guess what happened to assessments after this news was uncovered...

Regarding this comment: "The dues dropped this year (2023) to $50 from $108. The caveat to that is that there are no amenities except the maintenance of an entrance sign and the landscaping around it." ...

Keep in mind that assessments cover much more than maintaining amenities, and a number of them result from the fact that you're running a multi-million dollar business. These can include:

* infrastructure maintenance (streets, lighting, utility lines)

* insurance (a large expense which includes things like liability, casualty/fire/other extended coverage, fidelity/employee dishonesty which protects your financial assets, directors & officers insurance, and worker's comp or similar if you use volunteers)

* bookkeeping/accounting and tax prep

* "payroll" (community manager or others you hire to deal with day-to-day tasks of running an HOA)

* admin (estoppel letters and other activities associated with new buyers, enforcement expenses, printing/mailing costs, meeting space rentals if you don't have meeting space in your community, routine communications with owners including a website)

* legal (dealing with delinquencies/liens/foreclosures as well as routine legal matters)

These "hidden" expenses really add up.

If assessments dropped in an aging community that is currently dealing with inflation, country-wide increases in insurance premiums, and probably increasing delinquencies since these tend to rise when the economy gets shaky, as a homeowner I would be VERY worried and would be taking appropriate steps.

At this point, I'm not overly concerned about it but thanks for making me aware. The development has many more lots to sell and homes to be built. I assume the city is responsible for many of the items you mentioned. Nebraska has the 10th highest property taxes in the nation. And believe me, they are high.

LayaS (Nebraska)
Posts: 249

Posted:

About your list Cathy, Who pays for these thing in a nonHOA city neighborhood? or if you are a renter? I am respectfully asking because I made an assumption that property taxes cover these things. Maybe I am wrong. Please expand on your point, if you don't mind. Thanks.

* infrastructure maintenance (streets, lighting, utility lines)

* insurance (a large expense which includes things like liability, casualty/fire/other extended coverage, fidelity/employee dishonesty which protects your financial assets, directors & officers insurance, and worker's comp or similar if you use volunteers)

* bookkeeping/accounting and tax prep

* "payroll" (community manager or others you hire to deal with day-to-day tasks of running an HOA)

* admin (estoppel letters and other activities associated with new buyers, enforcement expenses, printing/mailing costs, meeting space rentals if you don't have meeting space in your community, routine communications with owners including a website)

* legal (dealing with delinquencies/liens/foreclosures as well as routine legal matters)

These "hidden" expenses really add up.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Developers usually always keep dues low. It increases their sales. Plus their startup costs are not as high as the long term Maintenace/replacement of items. Example: A pool may cost $20K to install. The reality is that the maintenance and upkeep will cost $5K to $10K a year. The Developer will no longer own the HOA by then in many cases. So the owners will now have to factor that expense into their due collections. Which will make the dues or special assessment go up.

A HOA is ONLY funded by it's members for it's members once it becomes owner owned. A developer still has the ability to use some of it's development funds to "cushion" some of the expenses. The city doesn't usually require HOA's. They just require the Developers who form HOA's to follow certain rules the city has.

Former HOA President

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By MelissaP1 on 03/23/2023 6:53 AM
Developers usually always keep dues low. It increases their sales. Plus their startup costs are not as high as the long term Maintenace/replacement of items. Example: A pool may cost $20K to install. The reality is that the maintenance and upkeep will cost $5K to $10K a year. The Developer will no longer own the HOA by then in many cases. So the owners will now have to factor that expense into their due collections. Which will make the dues or special assessment go up.

A HOA is ONLY funded by it's members for it's members once it becomes owner owned. A developer still has the ability to use some of it's development funds to "cushion" some of the expenses. The city doesn't usually require HOA's. They just require the Developers who form HOA's to follow certain rules the city has.

This is a post lost in reality.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That is my reality now... Do you think that my dues are going to stay $150 a year once Developer leaves? Nope. However, one of the reasons I bought into this HOA is that it has no amenities but for retention ponds. Which due to their negligence by the current developer will no doubt raise a few dues upon turnover.

Former HOA President

MaxB4
Posts: 3,513

Posted:

The cities don't require developers to create HOA.s? That's the biggest load of manure one can hear. Where have you been in the last 20-plus years?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Our city doesn't require developments to be HOA's. The Developers who make up the communities they are building make them HOA's. I am not sure the city would care if it is a HOA or not. Just that the Developer follow the rules of the city.

A new "Trend" is that developers are no longer making "HOA" but "Rental ONLY" developments. Meaning ALL the homes they now build are RENTAL only you can not purchase the home. If you can't purchase then you are NOT an owner. Hence no HOA except as Developer owned/operated. The city will approve the developer to build on the land.

Former HOA President

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By MelissaP1 on 03/23/2023 8:15 AM
Our city doesn't require developments to be HOA's. The Developers who make up the communities they are building make them HOA's. I am not sure the city would care if it is a HOA or not. Just that the Developer follow the rules of the city.

A new "Trend" is that developers are no longer making "HOA" but "Rental ONLY" developments. Meaning ALL the homes they now build are RENTAL only you can not purchase the home. If you can't purchase then you are NOT an owner. Hence no HOA except as Developer owned/operated. The city will approve the developer to build on the land.

Clueless once again.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

How am I clueless? Did you not know about the new trend about Renting only? If you rent you are NOT an owner. The Developer is the owner. They are going to take advantage of the benefits of a HOA non-profit or For profit by owning the HOA.

Our city pre-pandemic wanted to charge new owners a $10K move in fee. The Developers were going to have to kick in like $6K for every house they sold to the city. Luckily they squashed that dumb idea. The city is such a huge draw to move to they were trying to get the money out of the Developers/Buyers.

Former HOA President

LayaS (Nebraska)
Posts: 249

Posted:

HOA or not, it's just too situational to make a blanket statement that "'Homeowners' association should be abolished." Geography has a lot to do with it and state laws.

BillD16 (Texas)
Posts: 973

Posted:

Quote:

Posted By JohnS111 on 03/23/2023 4:34 AM

Yes, I served on a HOA board. Most of the other board members had no knowledge of how to run a business or what the governing documents of the HOA required. They simply deferred to the HOA’s property manager, who also served on the board and extracted tens of thousands of dollars from the HOA in additional “fees” and went after owners who questioned that. It was a large business run by complete amateurs and a greedy property manager. Just what could possibly go wrong?

Funny, but - the situation you describe is very close to the one that got me to run for the Board: we had a PM who realized that, with a lazy and uneducated Board, *she* could call all of the shots and tell everyone what to do. Including mining excessive amounts of violations for revenue. It took some work, but - things are better now.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By BillD16 on 03/23/2023 7:45 PM

Posted By JohnS111 on 03/23/2023 4:34 AM
. It was a large business run by complete amateurs and a greedy property manager. Just what could possibly go wrong?

with a lazy and uneducated Board, *she* could call all of the shots and tell everyone what to do. Including mining excessive amounts of violations for revenue. It took some work, but - things are better now.

I think this is starting to happen with our new Property manager our Mgt co assigned us. Seems like violation notices have gone up from 10% a month to 33% a month. We've got 3 board members. One is hawkish, I'm Sheepish and the 3rd doesnt' give any input.

Last month the hawkish board member told the new manager she was fine with all the violations and 2 hrs latter they were all sent out, before I had a chance to review. I complained that in the past we have always had at least 2 board members approve any violation letters that go out. And now this month the new manager asked the hawkish board member if it was OK for her to send out the violation letters again before I had a chance to review them.

the mgt company makes $4 per violation sent out. they can easily make thousand more per year by harrasing our owners.

vis ta vie

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By WendyM5 on 03/24/2023 2:59 AM

Posted By BillD16 on 03/23/2023 7:45 PM

Posted By JohnS111 on 03/23/2023 4:34 AM
. It was a large business run by complete amateurs and a greedy property manager. Just what could possibly go wrong?

with a lazy and uneducated Board, *she* could call all of the shots and tell everyone what to do. Including mining excessive amounts of violations for revenue. It took some work, but - things are better now.

I think this is starting to happen with our new Property manager our Mgt co assigned us. Seems like violation notices have gone up from 10% a month to 33% a month. We've got 3 board members. One is hawkish, I'm Sheepish and the 3rd doesnt' give any input.

Last month the hawkish board member told the new manager she was fine with all the violations and 2 hrs latter they were all sent out, before I had a chance to review. I complained that in the past we have always had at least 2 board members approve any violation letters that go out. And now this month the new manager asked the hawkish board member if it was OK for her to send out the violation letters again before I had a chance to review them.

the mgt company makes $4 per violation sent out. they can easily make thousand more per year by harrasing our owners.

What happens if the board holds a hearing and removes the violation/refunds any fine that was imposed on the ownerer? (This is what should happen if bogus violation notices were sent out.)

If the manager keeps any revenue they made for sending out the letter regardless of outcome, then they do have an incentive to game the system. People are much more likely to be honest if you make it hard for them to be dishonest. You need to re-adjust the incentives to encourage proper behavior:

* For the manager, sending out violation notices should be part of their job and compensation is the amount agreed to by contract. It should not be a separate revenue stream and should not be a variable amount - and if I were on the board, something like that would be a deal breaker if I were evaluating management companies. If you want to make violation notices an extra, then the manager should only book revenue for valid violations - if an alleged violation goes through a hearing and is reversed, then there should be no revenue to the manager. (If I were being a hard@$$ed, I'd say that the manager should actually be penalized for creating excess work for the board, harassing homeowners, and risking legal pushback. Otherwise you're paying them to make your community worse. But this is unlikely to fly, and the easiest method of dealing with a bad manager is finding a better one.)

* The board members who are taking a hands off approach to this should be the ones who handle the hearings. This would incentivize everyone to only send out notices for bona fide violations that the board believes they can make stick.

* Consider using a system that many communities use: send one or two informational/warning notices first, with the third notice being the actual violation and fining notice. In my experience, the large majority of violations are cleared up with only a warning.

I think it's obvious that for me, behavior like you're describing would be an invitation to replace the manager. But the board is also at fault for agreeing to a contract that encourages the bad behavior.

MichaelS56 (Minnesota)
Posts: 859

Posted:

Maybe you believe that city and state government should be abolished for the same reasons. Laughing.

JohnS111 (New York)
Posts: 228

Posted:

Quote:

Posted By MichaelS56 on 03/24/2023 9:48 AM
Maybe you believe that city and state government should be abolished for the same reasons. Laughing.

No, local government may not be the best either but at least there are all sorts of anti-corruption laws that help keep it in check. With HOAs, there are so few guardrails to keep HOAs, HOA lawyers and property managers honest and by the book that bad ones can get away with a lot.

LayaS (Nebraska)
Posts: 249

Posted:

Quote:

Posted By JohnS111 on 03/26/2023 8:34 AM

Posted By MichaelS56 on 03/24/2023 9:48 AM
Maybe you believe that city and state government should be abolished for the same reasons. Laughing.

No, local government may not be the best either but at least there are all sorts of anti-corruption laws that help keep it in check. With HOAs, there are so few guardrails to keep HOAs, HOA lawyers and property managers honest and by the book that bad ones can get away with a lot.

I am giving some kudos to my local government services today. We got 5 inches of snow that began last night and stopped around midmorning today. The city crews were here at 12:30 pm CDT clearing the streets.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By CathyA3 on 03/24/2023 9:33 AM

Posted By WendyM5 on 03/24/2023 2:59 AM

Posted By BillD16 on 03/23/2023 7:45 PM

Posted By JohnS111 on 03/23/2023 4:34 AM
. It was a large business run by complete amateurs and a greedy property manager. Just what could possibly go wrong?

with a lazy and uneducated Board, *she* could call all of the shots and tell everyone what to do. Including mining excessive amounts of violations for revenue. It took some work, but - things are better now.

I think this is starting to happen with our new Property manager our Mgt co assigned us. Seems like violation notices have gone up from 10% a month to 33% a month. We've got 3 board members. One is hawkish, I'm Sheepish and the 3rd doesnt' give any input.

Last month the hawkish board member told the new manager she was fine with all the violations and 2 hrs latter they were all sent out, before I had a chance to review. I complained that in the past we have always had at least 2 board members approve any violation letters that go out. And now this month the new manager asked the hawkish board member if it was OK for her to send out the violation letters again before I had a chance to review them.

the mgt company makes $4 per violation sent out. they can easily make thousand more per year by harrasing our owners.

What happens if the board holds a hearing and removes the violation/refunds any fine that was imposed on the ownerer? (This is what should happen if bogus violation notices were sent out.)

If the manager keeps any revenue they made for sending out the letter regardless of outcome, then they do have an incentive to game the system. People are much more likely to be honest if you make it hard for them to be dishonest. You need to re-adjust the incentives to encourage proper behavior:

* For the manager, sending out violation notices should be part of their job and compensation is the amount agreed to by contract. It should not be a separate revenue stream and should not be a variable amount - and if I were on the board, something like that would be a deal breaker if I were evaluating management companies. If you want to make violation notices an extra, then the manager should only book revenue for valid violations - if an alleged violation goes through a hearing and is reversed, then there should be no revenue to the manager. (If I were being a hard@$$ed, I'd say that the manager should actually be penalized for creating excess work for the board, harassing homeowners, and risking legal pushback. Otherwise you're paying them to make your community worse. But this is unlikely to fly, and the easiest method of dealing with a bad manager is finding a better one.)

* The board members who are taking a hands off approach to this should be the ones who handle the hearings. This would incentivize everyone to only send out notices for bona fide violations that the board believes they can make stick.

* Consider using a system that many communities use: send one or two informational/warning notices first, with the third notice being the actual violation and fining notice. In my experience, the large majority of violations are cleared up with only a warning.

I think it's obvious that for me, behavior like you're describing would be an invitation to replace the manager. But the board is also at fault for agreeing to a contract that encourages the bad behavior.

to answer your question, nothing would happen. the fee is for mailing out each violation letter, whether that is solved or correct or wrong is irrelevant, they make $4 and have an outside company mail out all violation letters at the touch of a button online.

vis ta vie

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By JohnS111 on 03/26/2023 8:34 AM

Posted By MichaelS56 on 03/24/2023 9:48 AM
Maybe you believe that city and state government should be abolished for the same reasons. Laughing.

No, local government may not be the best either but at least there are all sorts of anti-corruption laws that help keep it in check. With HOAs, there are so few guardrails to keep HOAs, HOA lawyers and property managers honest and by the book that bad ones can get away with a lot.

I think that any attempt to regulate HOAs beyond what we have now will run up against property rights laws. The laws vary by state, but by and large they tend to favor the free enjoyment of one's property. In addition, the big problem with homeowners is that the majority haven't got the knowledge or skills to govern a non-profit corporation, and this is the pool from which the board members are selected. One solution would be requiring prospective buyers to attend and pass a course that would give them this knowledge. I doubt that a requirement like this will ever become reality.

Community managers are at least somewhat reined in by the market: the good ones will be in demand, the bad ones less so. Unfortunately, the market also has to deal with the reality that homeowners often don't want to set assessments high enough to pay for quality service. Being a community manager is tough, and a low salary will encourage good employees to find a different profession.

So... you have HOAs made up of mostly ignorant members who can act in their own self-interest and against the interests of the HOA and who don't want to pay for competent service providers. As I've said before, I'm often surprised that things work as well as they do.

TomN9 (Florida)
Posts: 1

Posted:

IMHO HOAs can be good & bad. It depends on each individual HOA. We belonged to two large condominium associations without any problems at all. Now we belong to a small out in the country individual property owners association from hell. We believe in logical, reasonable, common sense standards and rules but don’t believe in abuse of authoritative power. Serving on an association board as an officer shouldn’t go to a person’s head but it does with some folks. It does depend on the personalities serving on the board. That’s why it’s important to vote in the right personalities. Well, after years of watching, listening and even serving on the board myself, we’ve elected to hire a lawyer. Yep, sad, but true.
This association often experiences officers who like to bully, intimidate and treat the property owners like they have no rights. The community has developed favored groups and everyone is suppose to think alike and agree with them. And, oh by the way, the rules don’t apply to them when convenient but if you aren’t a groupie, well, the rules will apply to you. Of course, the same folks keep getting elected to the board. I was lucky to serve for a few years, however, since I was about all the property owners with a difference in thought, didn’t always agree, the group managed to get their buddies elected back onto the board. And officers on the board broke the rules themselves with the election process to get me off the board. The groupie thing.

So I’d say when an HOA is properly managed and functions to maintain the common areas and property to reasonable standards so property values remain good, rules and standards coincide with state laws so abusing individual personal property rights doesn’t happen, then they may serve a good purpose. But most definitely when HOAs start abusing property owners rights, I can understand why a property owner(s) would want an HOA to be abolished. After, experiencing our HOA, we are ready for it to be abolished or at least a professional unbiased management company to take it over.