TimH1 (Alabama)
Posts: 17
Posts: 17
Posted:
This didn't happen at my HOA, but did at one of the developers other sub-divisions. These are new sub-divisons in a rapidly growing area, and signage placed at the entrance (prior to the first house being constructed) lists the amenities of the particular sub-division (pool clubhouse, tennis courts, wooded areas, walking trails, workout room, etc.). My HOA has many of those amenities, and, when it came time to turn control over to the newly elected Board, we did due dilligance (assisted by our Treasurer, who is a CPA), and the books were found to be mostly in order, with minor issues and a few questions on back dues on a few lots that had been sold to individuals. All in all, the transition was smooth and our HOA is now a self supporting HOA with an elected Board and entirely volunteer efforts. Of course, we use professional maintenence for things like ground care, pool maintainence, etc. All property has been transfered into the HOA's name, and we assumed no debt; there was no mortgage on the pool, clubhouse or common area.
In another sub-division, the developer decided, after about 2/3 of the 150 houses had been built, to "charge" the HOA for the pool and clubhouse, to the tune of a $500,000 mortage. When I purchased my house, I did not have the foresight to determine if the HOA had debt (and, if so, how much), since this was my first experience in a coveted community with an HOA; fortunately, we did not.
The question is, what disclosure does and should a developer have regarding amenities, and more importantly, the debt and finances of the sub-divison and ultimately the HOA? Would this vary by state? Should the Realtor advise? How may sub-divisions have debt on their amenities? Note that many of these homes are sold by "on staff" developer people who sell the lot, house plan and upgrades, then build the house. If you become a "member" of the association by the purchase of a home, what is the rule of thumb regarding finances? Shouldn't this be disclosed or noted in the closing documents? Needless to say, the folks in sub-division "B" are in an uproar......
In another sub-division, the developer decided, after about 2/3 of the 150 houses had been built, to "charge" the HOA for the pool and clubhouse, to the tune of a $500,000 mortage. When I purchased my house, I did not have the foresight to determine if the HOA had debt (and, if so, how much), since this was my first experience in a coveted community with an HOA; fortunately, we did not.
The question is, what disclosure does and should a developer have regarding amenities, and more importantly, the debt and finances of the sub-divison and ultimately the HOA? Would this vary by state? Should the Realtor advise? How may sub-divisions have debt on their amenities? Note that many of these homes are sold by "on staff" developer people who sell the lot, house plan and upgrades, then build the house. If you become a "member" of the association by the purchase of a home, what is the rule of thumb regarding finances? Shouldn't this be disclosed or noted in the closing documents? Needless to say, the folks in sub-division "B" are in an uproar......