Unequal HOA fee increase; Board refuses to give written explanation

Started by RuthM4 • 34 replies • 363 views

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RuthM4 (Florida)
Posts: 10

Posted:

Background:
I live in an HOA of 450 houses in Florida. There are 3 neighborhoods with different HOA fees due to different lot sizes (S, M and L for small, medium and large lot sizes). The fee differential was established by the developer from the start--20 years ago. Every year, instead of increasing fees proportionally, the board increased HOA fees by an equal $ amount. Due to this error, units in S were overpaying and M and L were underpaying HOA fees, with units in L underpaying the most (basic mathematic principle). An owner in S brought this to the board's attention and sought to play "catch up" with HOA fees. When the proposed 2025 budget was sent out, the board did not highlight the fact that units in M faced a significantly larger % and $ increase in HOA fees than the other 2 neighborhoods. An owner would only be aware of this if he did the math. I did the math. The problem is that the math was done all wrong. The correct math shows that if the board was trying to correct its 20 year old mistake, S should have had a reduction in HOA fees and L should have had a greater increase in HOA fees.

Before the budget meeting, I asked for a written explanation of the differential. The board refused to send it or explain it and said it would be explained in the budget meeting. I could not attend the meeting in person, but listened in via Zoom, The audio was horrendous and I could barely make out what was being said. The board approved the budget before the explanation of how they arrived at the 2025 HOA fees was given. The owner who originally brought this matter to the attention of the board gave a rambling and convoluted explanation which made no sense. He stated that the reason units in M faced a higher HOA fee increase than units in L was because they "benefited" most from the error. That is mathematically impossible!

After the budget meeting, I asked for a written explanation and calculations to justify the unequal HOA fee increase in only one neighborhood and received a harsh response stating that the explanation was given in the board meeting and no written explanation would be given.

Question:
What specifically can I ask for in a formal written request (certified mail, return receipt requested) to understand how the board arrived at their numbers? In the budget meeting the owner explained there were meetings with the Finance Committee and the HOA attorney (who is an owner in our HOA in the L section that benefited from the board's mistake the most). Surely there must be written documents submitted to the board with calculations and justification for the 2025 HOA fees. This info must be part of the official records of the HOA, no? And according to FL 720, it seems that this should fall under "Any other records that identify, measure, record, or communicate financial information."

I don't think the board even has the power to levy this unequal increase, as our documents clearly state that the only variable in HOA fees is the cost to maintain residential landscaping in the 3 neighborhoods based on general lot size. Nothing has changed there over 20 years. But first, I need to understand how they even arrived at their numbers.

GregoryT1
Posts: 315

Posted:

Before the experts start chiming in I do have a question.

Is it your expectations that with the 2025 budget that it will conform to the docs or is your expectations was the past also financially going to be corrected?

My understanding is that you can fix going forward but you won't be able to fix the past.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 11:18 AM
Every year, instead of increasing fees proportionally, the board increased HOA fees by an equal $ amount.

Mathematically I think you are overlooking that S, M and L likely have HOA-covered expenses associated with each that vary because of the differences in lot size. But other fees have no relation to lot size. E.g. if the HOA is responsible for clubhouse maintenance, then arguably each lot should pay the same amount for this particular expense. Each lot should also probably pay the same amount for the HOA's insurance on common areas.

Later you say:

Quote:

Posted By RuthM4 on 01/06/2025 11:18 AM
as our documents clearly state that the only variable in HOA fees is the cost to maintain residential landscaping in the 3 neighborhoods based on general lot size.

Would you please post here exactly what your CC&Rs say on this point?

Quote:

Posted By RuthM4 on 01/06/2025 11:18 AM
Question:
What specifically can I ask for in a formal written request (certified mail, return receipt requested) to understand how the board arrived at their numbers? In the budget meeting the owner explained there were meetings with the Finance Committee and the HOA attorney (who is an owner in our HOA in the L section that benefited from the board's mistake the most). Surely there must be written documents submitted to the board with calculations and justification for the 2025 HOA fees. This info must be part of the official records of the HOA, no? And according to FL 720, it seems that this should fall under "Any other records that identify, measure, record, or communicate financial information."

-- By my reading of FS 720, any meeting of the Finance Committee discussing the amount by which the assessments are to be increased (1) need not be open to members; and (2) need not have minutes. If the Finance Committee did not keep any records, then I think you are out of luck.

-- Records of the meeting with the attorney are protected by attorney client privilege and can be withheld from owners.

-- You do realize that trying to make up for any perceived inequalities or unfairness in past assessments is rather difficult, don't you? For one, inflation would have to be factored in (and the outcome would still likely not be 'fair' in everyone's eyes. For another, the CC&Rs may not even allow 'making up for past inequities in the assessment.

-- Legally when so much time has gone by without anyone filing suit over the yearly increase (that was the same dollar amount for all lots, regardless of the lot being S, M or L), the courts resist trying to make the "victims" whole. I tend to think the S owners are out of luck and need to look forward, trying to get equity for the upcoming year 2025 (as you are doing), to the extent the CCRs allow. But what "equity" is is tricky, as I describe above.

-- I would have to know a lot more to comment more on this situation. Can you give an overview of all the types of expenses the HOA pays each year? E.g. road maintenance? Swimming pool? Clubhouse maintenance and operation? Park? What amenities and infrastructure does the HOA offer/have?

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By GregoryT1 on 01/06/2025 11:48 AM

Is it your expectations that with the 2025 budget that it will conform to the docs or is your expectations was the past also financially going to be corrected?

My understanding is that you can fix going forward but you won't be able to fix the past.

Well said.

I agree with all.

RuthM4 (Florida)
Posts: 10

Posted:

My view is that there cannot be a correction for the past, only a correction to put us where we should be going forward. I would argue that the developer established a differential in HOA fees by neighborhood from the start and that differential should have been maintained over time. If annual increases were apportioned properly to maintain that same differential every year, then that would be fair. Instead, an equal $ increase was assessed every year across all neighborhoods, resulting in the narrowing of the differential over time, so S units pay too much and L units pay to little (a basic mathematic fact). My issue is that the "correction" or "catch up" as the board called it going forward is calculated incorrectly. Our CC&Rs clearly state that ALL common expenses (pool, clubhouse, roads, tennis courts, insurance, property management, etc.) EXCEPT FOR RESIDENTIAL LOT LANDSCAPING MAINTENANCE (grouped by S, M or L neighborhood) are to be shared equally by all units in the development, regardless of which neighborhood in which one owns a house. Lot size and landscaping costs did not suddenly grow in % terms in 2025 for units in only the M neighborhood relative to the S and L neighborhoods, so what is the justification for the greater % increase in HOA fees for only the one neighborhood? All I ask is for a written explanation. Something had to be submitted to the board in writing for their consideration that owners can view, no? Otherwise, the board can just pull numbers out of thin air and decide to charge certain neighborhoods whatever amount they want.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 1:22 PM
Our CC&Rs clearly state that ALL common expenses (pool, clubhouse, roads, tennis courts, insurance, property management, etc.) EXCEPT FOR RESIDENTIAL LOT LANDSCAPING MAINTENANCE (grouped by S, M or L neighborhood) are to be shared equally by all units in the development, regardless of which neighborhood in which one owns a house.

Hence proper budgeting requires that a certain dollar amount X of each lot's assessment is exactly the same as that of all the other lots. Over time this amount will rise, due to inflation and other factors.

X = (total annual maintenance costs and reserve contributions for pool, clubhouse, roads, tennis courts, insurance management in dollars) / 450

A certain dollar amount Y of each lot's assessments differs depending on the lot size (S, M or L).

Y for S lots = Total Residential Lot Landscaping Costs * S / (S+M+L) / number of S lots

and so on.

Could the fixed dollar amount that was added each year in the past to each lot's assessment, regardless of lot size, represent increases in the costs for the pool, clubhouse, roads, tennis, insurance and management? Yup. Whence no harm no foul. That's a basic mathematical fact.

The only question I have is whether the assessments the board proposes are consistent with the projected expenses (including reserves) for 2025.

As to determining the board's reasoning: The budget should show the math that you want.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 11:18 AM
Background:
I live in an HOA of 450 houses in Florida. There are 3 neighborhoods with different HOA fees due to different lot sizes (S, M and L for small, medium and large lot sizes). The fee differential was established by the developer from the start--20 years ago. Every year, instead of increasing fees proportionally, the board increased HOA fees by an equal $ amount. Due to this error, units in S were overpaying and M and L were underpaying HOA fees, with units in L underpaying the most (basic mathematic principle). An owner in S brought this to the board's attention and sought to play "catch up" with HOA fees. When the proposed 2025 budget was sent out, the board did not highlight the fact that units in M faced a significantly larger % and $ increase in HOA fees than the other 2 neighborhoods. An owner would only be aware of this if he did the math. I did the math. The problem is that the math was done all wrong. The correct math shows that if the board was trying to correct its 20 year old mistake, S should have had a reduction in HOA fees and L should have had a greater increase in HOA fees.

Before the budget meeting, I asked for a written explanation of the differential. The board refused to send it or explain it and said it would be explained in the budget meeting. I could not attend the meeting in person, but listened in via Zoom, The audio was horrendous and I could barely make out what was being said. The board approved the budget before the explanation of how they arrived at the 2025 HOA fees was given. The owner who originally brought this matter to the attention of the board gave a rambling and convoluted explanation which made no sense. He stated that the reason units in M faced a higher HOA fee increase than units in L was because they "benefited" most from the error. That is mathematically impossible!

After the budget meeting, I asked for a written explanation and calculations to justify the unequal HOA fee increase in only one neighborhood and received a harsh response stating that the explanation was given in the board meeting and no written explanation would be given.

Question:
What specifically can I ask for in a formal written request (certified mail, return receipt requested) to understand how the board arrived at their numbers? In the budget meeting the owner explained there were meetings with the Finance Committee and the HOA attorney (who is an owner in our HOA in the L section that benefited from the board's mistake the most). Surely there must be written documents submitted to the board with calculations and justification for the 2025 HOA fees. This info must be part of the official records of the HOA, no? And according to FL 720, it seems that this should fall under "Any other records that identify, measure, record, or communicate financial information."

I don't think the board even has the power to levy this unequal increase, as our documents clearly state that the only variable in HOA fees is the cost to maintain residential landscaping in the 3 neighborhoods based on general lot size. Nothing has changed there over 20 years. But first, I need to understand how they even arrived at their numbers.

This is some tough math.

You as the home owner pay a landscaper to recruit and train employees, pay employees shift prep and transportation time to get the equipment to the site, payroll, insurance, supervision, and other costs that are fixed and do no vary with lot size.

Do you believe the people with larger lots should pay more for this?

Is it possible the the developer set the fees for the smaller lots are too low a level to better market the sale?

RuthM4 (Florida)
Posts: 10

Posted:

All I ask is show me the math and show me the reasoning why one neighborhood got hit harder than the other two. Our board is less than transparent in many, many ways.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 3:27 PM
All I ask is show me the math and show me the reasoning why one neighborhood got hit harder than the other two. Our board is less than transparent in many, many ways.

Can you break down the 2025 total assessment of the S, M and L lots into its two parts? Then can you do the same for the 2024 total assessment of the S, M and L lots?

Please understand that readers here do not have in front of them what you have in front of them. People wanting help here need to be very precise when they post and ask a question.

DeanJ
Posts: 1,786

Posted:

Quote:

Besides landscaping, what common property does your HOA maintain? What is the annual assessment on the largest and smallest lots and how much was the increase?

RuthM4 (Florida)
Posts: 10

Posted:

Please understand that I am not asking this board to come up with the numbers. I am asking what info can I obtain in a formal request that explains how the board came up with these numbers. Also, it is important to know that owners who did not attend the board meeting for whatever reason (seasonal residents, other commitments, etc.) were also denied an explanation by the board. Do owners even have a right to know how HOA assessments are determined?

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 5:32 PM
PDo owners even have a right to know how HOA assessments are determined?

Yes. The assessments are determined by the HOA's projected expenses. The projected expenses are presented in the budget.

From FS 720:
The association shall prepare an annual budget that sets out the annual operating expenses. The budget must reflect the estimated revenues and expenses for that year and the estimated surplus or deficit as of the end of the current year. The budget must set out separately all fees or charges paid for by the association for recreational amenities, whether owned by the association, the developer, or another person. The association shall provide each member with a copy of the annual budget or a written notice that a copy of the budget is available upon request at no charge to the member.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By RuthM4 on 01/06/2025 5:32 PM
Please understand that I am not asking this board to come up with the numbers. I am asking what info can I obtain in a formal request that explains how the board came up with these numbers. Also, it is important to know that owners who did not attend the board meeting for whatever reason (seasonal residents, other commitments, etc.) were also denied an explanation by the board. Do owners even have a right to know how HOA assessments are determined?

What if they just tell you they did it the way it’s been done without complaint for the last 20 years?

CathyA3 (Ohio)
Posts: 6,299

Posted:

If HOA members are being charged different amounts, then somewhere in the CC&Rs it should explain how the different amounts are determined.

In some ways this sounds like the par values assigned to homes in my condo community. We have three different par values, and units are assigned one of them (spelled out in the CC&Rs). To calculate the assessment amount, we total up the par values assigned to all of the units, divide the individual unit's par value by this total to get that unit's fractional share of the total, and then multiply this fractional share by the budget amount for that year. That's the annual assessment amount. We pay assessments monthly, so we divide the annual assessment amount by 12, and that figure is printed on coupon books and the informational letter that goes out with the new budget figures in December.

Yes, people have gotten it wrong in the past. Not badly wrong (a few dollars), but wrong.

As others have said, you can't correct what's been done in the past. People have sold their homes. New owners who were not affected by the mistakes have moved in. You can only fix things going forward.

Is it possible that the board is still getting it wrong? Yup. The only way to know is to do the calculation yourself. Unfortunately, math skills are not required for serving on the board. You'd hope that the treasurer would have them (and the community manager), but I wouldn't bet any money on it.

GregoryT1
Posts: 315

Posted:

Hi Ruth,

Can you request how they got their numbers? The answer from the folks it seems yes you can and more importantly do the math yourself (which I think you already did) and potentially show them the errors of their ways.

What the team is really good at is they can generate the writing for that information request if you want them to. I seen them several times create formats for people in different situations from demand letters to inquiry letters etc. Would you like them get you a format for a letter to get them to explain the numbers and also show them that they did the math wrong?

Excel I am good at letter writing so so. They are much stronger in that regard.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By GregoryT1 on 01/07/2025 7:21 AM
Can you request how they got their numbers? The answer from the folks it seems yes you can

-- She can ask for anything she wants, but the Board does not necessarily have to provide what she asks for.

-- The Board has to provide the budget as dictated in more detail in FS 720. Otherwise not one person in this thread has said the Board has a legal obligation to elaborate further.

-- So far I think the OP needs a bit of instruction on how to deduce information from the budget.

-- I think RuthM4 needs to get clarity on what she wants here. If I were she, what I would want to know is if the assessment numbers are consistent with the numbers in the budget and with the CC&Rs.

-- There is no "team" that drafts letters for participants here.

KerryL1 (California)
Posts: 14,550

Posted:

The HOW is in the CC&Rs in my condo HOA, which has a square foot variance for dues. This is noted in the CC&Rs and readers are directed to Exhibit A. Of our 200+ units, there are 31 different sf units. The mathematical formula is there.

If such a formula is not in Ruth's CC&Rs, how can anyone determine dues for the different lot. size variables?

GregoryT1
Posts: 315

Posted:

hi Ruth,

Were you able to speak to a few neighbors who attended the meeting to find out what happened? Also did you speak to the "rambler" at the meeting to understand in why their math which is different than the HOA in their eyes is correct? It looks like old fashion sleuthing is needed. You might be able to understand your numbers but then call out the HOA on theirs. You might be surprised that they are math challenged.

KerryL1 (California)
Posts: 14,550

Posted:

To reiterate Cathy's point: "...in the CC&Rs it should explain HOW the different amounts are determined...[KL emph.]" This math. process is in my HOA's CC&Rs too as noted in my above.

WHAT do your CC&Rs say about the "math," Ruth?, i.e., the mathematical process?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Welcome to today's "HOA MATH" class!

The CC&Rs may not describe the math calculations as such. But if not, they should address assessments and they should talk about differences in ownership that can result in different assessment amounts - in this case differences in lot sizes.

If the original assessments were done correctly, then the board could have applied the same percentage increase for everyone. For example, if the new year's budget is increasing by 5%, then you increase everyone's assessments by 5%. [For the math nerds, this works because .05(A + B + C) = .05(A) + .05(B) + .05(C). In other words, 5% of the total is the same as calculating 5% of the individual pieces and then adding them up. This is Known as the Distributive Property.]

Increasing everyone's assessments by the same dollar amount does not work unless everyone's assessments are the same to begin with. That isn't the case here. Adding a flat dollar amount messes up the mathematical relationships between the different lot sizes and their assessments.

Correcting assessments after doing them wrong for a while is more complicated, and I can see why the board won't explain it. They probably don't understand themselves and will just confuse everyone. Once you mess up, you have to go back to doing the calculations from scratch. You can't just apply 5% to everyone's previous assessments, because 5% of a wrong amount is still a wrong amount. In fact, doing it wrong is much easier to explain, unfortunately.

If I were on the OP's board and none of us had the necessary math skills, I'd find some who does have them and get that person to create an Excel spreadsheet that has the correct calculations in it. I created such a spreadsheet for my community since previous boards (and management companies) were math challenged. I also talk math to the community all the time. I call it transparency, but really it's a math nerd geeking out over this stuff.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By CathyA3 on 01/08/2025 6:44 AM

Increasing everyone's assessments by the same dollar amount does not work unless everyone's assessments are the same to begin with. That isn't the case here. Adding a flat dollar amount messes up the mathematical relationships between the different lot sizes and their assessments.

Nope, not necessarily so. If one reads what the OP wrote, all owners share equally in one part (pool, clubhouse, roads, tennis courts, insurance, property management, etc.) of the HOA's expenses. In this case, it is entirely possible a flat dollar amount of increase in any given year is consistent with the CC&Rs.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By CathyA3 on 01/08/2025 6:44 AM

Correcting assessments after doing them wrong for a while is more complicated

I maintain such a correction violates the covenants. That is: Correcting a past covenant violation is not lawfully correctable by implementing a new covenant violation.

Each year the Board is supposed to do what the covenants say, namely: Estimate the coming year's expenses. Divide the expenses among the owners pursuant to what the covenants say.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By ElleN on 01/08/2025 8:29 AM

Posted By CathyA3 on 01/08/2025 6:44 AM

Correcting assessments after doing them wrong for a while is more complicated

I meant correcting them going forward, since you're unable to base new assessments on something simple such as a percentage increase over the previous year.

You can't retroactively correct them even if it were lawful, because the current membership almost certainly has changed. Former owners have sold, new owners have moved in - and depending on when the community transitioned from developer control, there could even be newer homes that were never assessed improperly and do not need to be adjusted.

"Fix it going forward" is the answer to a lot of things.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By CathyA3 on 01/08/2025 6:44 AM
Welcome to today's "HOA MATH" class!

The CC&Rs may not describe the math calculations as such. But if not, they should address assessments and they should talk about differences in ownership that can result in different assessment amounts - in this case differences in lot sizes.

If the original assessments were done correctly, then the board could have applied the same percentage increase for everyone. For example, if the new year's budget is increasing by 5%, then you increase everyone's assessments by 5%. [For the math nerds, this works because .05(A + B + C) = .05(A) + .05(B) + .05(C). In other words, 5% of the total is the same as calculating 5% of the individual pieces and then adding them up. This is Known as the Distributive Property.]

Increasing everyone's assessments by the same dollar amount does not work unless everyone's assessments are the same to begin with. That isn't the case here. Adding a flat dollar amount messes up the mathematical relationships between the different lot sizes and their assessments.

Correcting assessments after doing them wrong for a while is more complicated, and I can see why the board won't explain it. They probably don't understand themselves and will just confuse everyone. Once you mess up, you have to go back to doing the calculations from scratch. You can't just apply 5% to everyone's previous assessments, because 5% of a wrong amount is still a wrong amount. In fact, doing it wrong is much easier to explain, unfortunately.

If I were on the OP's board and none of us had the necessary math skills, I'd find some who does have them and get that person to create an Excel spreadsheet that has the correct calculations in it. I created such a spreadsheet for my community since previous boards (and management companies) were math challenged. I also talk math to the community all the time. I call it transparency, but really it's a math nerd geeking out over this stuff.

Your declaration may specify that is how it is to be done, but like many HOAs, the formula is discriminatory in favor of the owners of the class A (smaller units)

Each unit should pay an equal fee for maintenance of pools, club, houses, and tennis courts. If a building amenity is equal ( ie. Patio / balcony size, parking spots, ect) each unit should pay the same amount for the maintenance of that amenity.

It seems in the OP’s HOA the board is permitted not to use a formula to calculate the assessment.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By CathyA3 on 01/08/2025 9:50 AM

Posted By ElleN on 01/08/2025 8:29 AM

Posted By CathyA3 on 01/08/2025 6:44 AM

Correcting assessments after doing them wrong for a while is more complicated

I meant correcting them going forward, since you're unable to base new assessments on something simple such as a percentage increase over the previous year.

I hope you mean that going forward, the assessments will be imposed consistent with the covenants. In other words, forget about adjusting assessments going forward to address perceived, past assessment inequities (that owners overlooked for many years, which weighs against these owners enormously).

Quote:

Posted By CathyA3 on 01/08/2025 9:50 AM
"Fix it going forward" is the answer to a lot of things.

Not when it comes to past perceived inequitable assessments. Owners need to get into their heads that past wrongs frequently cannot lawfully be redressed by future actions.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By ElleN on 01/08/2025 4:21 PM

Posted By CathyA3 on 01/08/2025 9:50 AM

Posted By ElleN on 01/08/2025 8:29 AM

Posted By CathyA3 on 01/08/2025 6:44 AM

Correcting assessments after doing them wrong for a while is more complicated

I meant correcting them going forward, since you're unable to base new assessments on something simple such as a percentage increase over the previous year.

Quote:

Posted By CathyA3 on 01/08/2025 9:50 AM
"Fix it going forward" is the answer to a lot of things.

Not when it comes to past perceived inequitable assessments. Owners need to get into their heads that past wrongs frequently cannot lawfully be redressed by future actions.

Actually what owners need to get into their heads is HOAs by definition is socialism and everyone is not treated equally or fairly.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By DeanJ on 01/08/2025 4:57 PM
Actually what owners need to get into their heads is HOAs by definition is socialism and everyone is not treated equally or fairly.

Nope. By definition HOAs are a contract between owners and their neighbors.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By ElleN on 01/08/2025 5:09 PM

Posted By DeanJ on 01/08/2025 4:57 PM
Actually what owners need to get into their heads is HOAs by definition is socialism and everyone is not treated equally or fairly.

Nope. By definition HOAs are a contract between owners and their neighbors.

A social contract.

KerryL1 (California)
Posts: 14,550

Posted:

Isn't there something in the CC&Rs that says something like all lots are assessed equally except for Landscaping? Lots designated "S" pay 25% of the Landscaping operating budget for front yards; Lots M pay 30% and Lots L pay 45%. The percentages also are paid for any landscaping in front yards on the Reserve Study.

Here is another of ours in our CC&Rs for two lots: "b) Commercial Condominium Owners Allocable Share. Each Commercial Condominium Owner shall pay an amount equal to the Owner's Proportionate Share set as 5% of the amount specified in the Base Budget as the Commercial Contribution.
The Commercial Owners Special Benefit Area also contributes 5% to Base reserves for all elements or components provided for its use. The Owner's “Proportionate Share” is an amount which was determined based upon the proportion of Grid Areas to the total number of Grid Areas in the Owners’ Com-
mercial Condominium lots as shown on the Condominium Plan."

And yes there are indeed, some major errors for years. The Board voted to make corrections. So going forward, the Comm. Owner has been contributing their correct amount for EVERYthing provided for their use. It was so significant that the Board was unable to raise thier dues 27% the next budget as our CC&Rs & Cali salute doe not permit an increase of over 20%

ElleN (Idaho)
Posts: 1,338

Posted:

DeanJ, go look up "land covenant."

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By ElleN on 01/09/2025 7:34 AM
DeanJ, go look up "land covenant."

I get it Ellen, but just because there is a land covenant doesn’t mean the declaration is a contract requiring everyone to be treated equally.

Owner A can be allowed to perform an improvement, the design standards get amended and owner B is denied. The assessments being calculated using what ever method in the declaration doesn’t mean the values are fair. Various owners will enjoy advantages over other owners and if you move into an HOA you need to be willing to accept these facts.

The entire HOA concept is a form of socialism where the owners conduct and funds can be directed to the common good.

GregoryT1
Posts: 315

Posted:

Great discussion that warrants its own thread. What is the true nature of HOA, Condo and CID in general.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By DeanJ on 01/09/2025 7:54 PM

Posted By ElleN on 01/09/2025 7:34 AM
DeanJ, go look up "land covenant."

I get it Ellen, but just because there is a land covenant doesn’t mean the declaration is a contract requiring everyone to be treated equally.

It is a contract/agreement requiring everyone to be treated according to the terms of a contract/agreement. Don't like it? Don't buy the lot/home/condo unit et cetera.

Consenting parties agreeing to a contract is not socialism.

If you want to complain about HOAs, complain about one's elected state and county/city officials regulating land so as to require HOAs and so offload some costs that states/counties/cities would otherwise bear. This is also not socialism.

I do not see states/counties/cities getting rid of HOA requirements for land to be developed anytime soon. Why? Because it is about the money.

CathyA3 (Ohio)
Posts: 6,299

Posted:

What ElleN said.

A contract is the foundation of economics. It spells out the terms under which a group of people agree to do business with each other. The terms of the contract apply to all parties. Any differences must be spelled out in the contract; otherwise they don't exist. But, as others have noted, no contract can cover all contingencies. A well written contract will specify how the unanticipated events can be handled. In an HOA, these can include ACCs and dispute resolution procedures. Parties to the contract agree to the process, not the outcome.

"Socialism" and "capitalism" are just labels we put on differing economic philosophies. They're a shorthand, and are actually not terribly informative - unless the person who uses the label spells out exactly what they mean when they use the term.

Few people can give correct definitions of the labels without resorting to Google - and that includes well educated and well informed people. More info: Capitalist vs. Socialist Economies

In my experience, these labels are used more often to mislead and rouse the rabble - in which case they can be effective.

(I had an economics professor who hated price controls. To him, prices were sacred. They're an implied contract between two people who agree to exchange money for goods and services. He felt that governments should not interfere with this, since the people best able to sort out this exchange are the ones doing it. Price controls don't work all that well, either. If you try to control one part of a larger system, you end up with corresponding and often uncontrolled dislocations in other parts of the system. An action is followed by an opposite reaction - physics or systems analysis, in other words.)

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By ElleN on 01/10/2025 7:00 AM
... snip ...

I do not see states/counties/cities getting rid of HOA requirements for land to be developed anytime soon. Why? Because it is about the money.

It dawned on me a while back is that the only people who don't really benefit from community associations are the homeowners. Oh sure, they toss us a swimming pool or lovely landscaping at the community entrance. They also toss us maintenance responsibilities for things such as streets that ordinarily would be paid for by our taxes - but they don't reduce our tax bills to compensate for this. The people who benefit directly from this are those who don't live in a community association and whose tax bills are reduced.

Community associations wouldn't exist without owners. The owners are essential components of the system - the same way that bricks and lumber and asphalt and pipes and electrical lines are essential components. They're also equally interchangeable. As long as developers are forced to create new HOAs in exchange for permission to develop the land, there will be HOAs. There will also be buyers since people's only choice if they want new construction is to buy in an HOA (or buy a piece of land somewhere and hire their own builders).

You know the old saying: if you look around and you don't know who the mark is, it's you. The only way to win at this game is not to play (or to be anyone other than the buyer).

Signed,
The Cynical Mark

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