JosephG13 (Mississippi)
Posts: 1
Posts: 1
Posted:
Is it proper for a developer to advance money to the HOA for general mantience of the grounds and administration as the project is under way and be repaid from the Dues?
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hoa loan from builder
Started by JosephG13 • 5 replies • 202 views
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MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
They own the HOA. It is incorporated under their name. This is normal operations as why you pay dues.
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DeanJ
Posts: 1,786
Posts: 1,786
Posted:
It may not be proper, but mathematically it is required. Also developers can be very dishonest with making their required contributions to HOA funds. Read the annual financial reports and hold their feet to the fire.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
As long as he's keeping the books properly, it's fine.
In the early stages of development, the assessments from homeowners won't totally cover expenses and the developer has to put additional money into the pot. For example, the builder I work for typically builds the amenities first (some do this last), and the maintenance costs for these things will eventually be spread out among all homeowners. If only a few homes have been built so far, there isn't enough assessment income yet - so the developer may advance money to the HOA and get reimbursed later.
In the early stages of development, the assessments from homeowners won't totally cover expenses and the developer has to put additional money into the pot. For example, the builder I work for typically builds the amenities first (some do this last), and the maintenance costs for these things will eventually be spread out among all homeowners. If only a few homes have been built so far, there isn't enough assessment income yet - so the developer may advance money to the HOA and get reimbursed later.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By DeanJ on 12/12/2023 8:34 AM
It may not be proper, but mathematically it is required.
It may not be proper, but mathematically it is required.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By JosephG13 on 12/12/2023 7:05 AM
Is it proper for a developer to advance money to the HOA for general mantience of the grounds and administration as the project is under way and be repaid from the Dues?
Is it proper for a developer to advance money to the HOA for general mantience of the grounds and administration as the project is under way and be repaid from the Dues?
Yes.
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