Saturday, January 17, 2009

Homeowner Associations or HOA's..Boon or Bane?

There are good and bad points about living in a HOA controlled community I suppose. Your neighbor won't likely paint his or her home bright orange with purple polka dots because they just smoked some bad weed, and are having hallucinations. And, it's unlikely they will place their travel trailer on the roof to use as an extra bedroom for junior because it is the simplest way to expand the house. (Don't laugh...there was one house like that in coastal San Diego County, CA!)

The primary idea in HOA's is to provide some semblance of order and uniformity within a community and to maintain the community in a manner that provides a good living experience and quality of life for all the residents. Problem is, some HOA's do and some don't. Some spend more time bickering over the small things, and letting the major problems of the community slide, so that the community starts to look shabby. Some of the Boards of Directors sequester themselves so they can't be contacted except through the pseudo "management companies" they hire to oversee the landscape operations. They won't even publish their e-mail addresses so they can be contacted directly...makes you wonder what they have to hide? Don't think you'll go to a monthly meeting and air any complaints either; they usually require you submit your request to speak at some distant interval before the meeting, so they can be prepared to shoot down your concerns, or conveniently decide there is not enough time to hear your complaint at all.

Some communities turn from being occupied by homeowners, to a rental community, and, unfortunately, the owners then let the property downgrade, and the HOA's are lax at enforcing the rules and regulations regarding property upkeep. Thus the entire community suffers with property devaluation. You can keep your property painted and in pristine condition and the property next door or across the street can be a dump with no consequences to the owners it seems. After all, in Southern California, when you're getting two thousand dollars a month or more for rent, even a twenty-five dollar fine doesn't concern the owner, if they are fined at all. In some areas, the homes have needed painting for many years with no action on the part of the HOA at all.

So, if you're going to purchase a home in a HOA controlled community, before you sign on the dotted line, ask the neighbors and people in the neighborhood about the association and how they handle the rules and regulations, also known as the "CC&R's". Before you sink big dollars into a home that may deteriorate in value due to the laxity of the HOA, look at the streets and walkways, electrical and other common areas. How have they been maintained? Are you likely to get hit with a big assessment if work that is needed has been delayed? Is it an "aging" community, meaning one that is 15-20 years old or more? Usually they require more upkeep and maintenance costs will rise as the infrastructure deteriorates.

Look for signs of poor controls, such as wrong way parking, vehicles parked over sidewalks, heavy commercial vehicles, deteriorating property, cracked and damaged paving, electrical fixtures that need replacement, pools and spas that are old, poor landscape maintenance, (low cost bidding that results in shoddy work), deferred maintenance on fences, gates, walkways, and other common areas. Ask to speak to someone on the Board of Directors. If you can't speak to them before you buy, you'll likely not get to speak to them after either. You should ask for a copy of the CC&R's before your buy (you might be charged a fee) and a copy of the recent financial statements; question what you don't understand. After you buy and sign off is too late to realize you 'll be paying monthly fees for something you don't like, want or won't be getting value for.

Finally, realize the HOA fees only go UP! They can start low but they do go up. Some are relatively reasonable and some are ridiculously high. Having four or six tennis courts when you don't play tennis and two or three swimming pools when you don't swim is part of what you'll be paying for if that's in your community. And when those amenities need repair because kids toss chairs in the pool, or damage the spas, or run all over the tennis courts with street shoes, and the tennis players complain the courts need resurfacing, you'll be paying for that too. Even though you never use them. And the costs can be extremely high.

When the association decides to reseal or repave the streets, you can find they go with a company who does it all wrong. Then it needs to be done again in a few years and you'll be paying all over again. Remember, the Board has no expertise in most areas and takes bids from whom they consider reputable companies. They don't want input from the average homeowner and do things their own way, so when things go sour, the sitting Board takes no responsibility; the Board has usually turned over and it's someone elses' problem.

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