Large HOA Assessments

[JoJo]

Got some bad news last night.  HOA dues going from $310 to $395 a month and there's plan to have a $27,000 assessment per unit (may be more if rot is found below the siding).

What's the largest special assessment or home repair you've had to make?

[meg_shannon]

What is the value of your place? We used to rent in a development with a HOA. The value of the condos was about 200K, HOA fee at 375$, and there was one small special assessment of 5K (for snow removal and winter damage after a particularly bad winter, and talk of a large special assessment for some big maintenance projects.

I'm wondering because these costs seem really high for multi-unit dwellings. We're looking at buying a house, and everything I've read says to budget 1.5%/year for maintenance. At our previous rental the HOA fees were already 2.25% of the home's value every year. If I owned one of these units, I would be pissed if it turned out the HOA board hadn't been saving through the years for the eventual roof replacement, bad winter, etc.

[Sibley]

Thus why I don't want to buy a house with HOA.

[slugline]

This is why I'm glad my HOA only has a pool and a tennis court. The less community property there is to maintain, the less exposure I have to a shocking special assessment.

I have an old SFH where the main drain line is being breached by tree roots and will eventually need to be replaced. That will probably run five to six thousand dollars and will likely be the most expensive repair needed until the next time the roof wears out.

[Zikoris]

This is definitely a big factor in my decision to never buy Vancouver real estate - strata special levies. One coworker recently got hit with a 40K one. The highest I've ever heard of was one case my boyfriend mentioned that was about 100K per unit, and that one was particularly bad because it was for some structural critical thing that was increasing in cost by the day, but many of the owners didn't want to pay it, so there was a fight going on while the building was literally collapsing. I'm not sure what eventually happened - I'll have to ask him about it.

[JoJo]

This is a condo with 20 units.  I think the $27,000 is just the start... there's lots of cosmetic stuff too (replacing parking lot, cement, railings etc) that isn't included.  And this is only a 800 square foot condo in 2 buildings!

It doesn't help that one of the unit owner brought a suit against the HOA that went all the way to court last year (complained about people above them that put in hardwood floors, ants in the unit, and general not maintaining).  The judge ruled in favor of the HOA but our legal costs to defend were $100K -  or $5K per unit owner.  We're hoping to recover some but can't count on it.

[Balance]

We don't have a huge HOA since we have a single family residence.  But we do pay $75/mo because we have a management company that takes care of all of our front yard landscaping as well as make decisions for the architectural committee. 

For work though, I just appraised a condominium here on the Peninsula in the Bay Area, CA and the unit I appraised paya $897/month.  Most of the other condominium developments in this neighborhood pay close to $500 but this particular development was higher.  They didn't have any special assessments but they liked to keep high reserves apparently.  I guess its all relative, the unit I saw was a 3 bedroom/2.5 bathroom with 1,750 square feet that was worth a little bit over $1.3M.  Either way, its a crap load of money for the condo and the monthly HOA fee.

[marty998]

This is a condo with 20 units.  I think the $27,000 is just the start... there's lots of cosmetic stuff too (replacing parking lot, cement, railings etc) that isn't included.  And this is only a 800 square foot condo in 2 buildings!

It doesn't help that one of the unit owner brought a suit against the HOA that went all the way to court last year (complained about people above them that put in hardwood floors, ants in the unit, and general not maintaining).  The judge ruled in favor of the HOA but our legal costs to defend were $100K -  or $5K per unit owner.  We're hoping to recover some but can't count on it.

Well.. at least it cost that unit owner $5k extra as well... given he is part of the HOA (how do you go about essentially suing yourself is anyones guess but hey).

[meg_shannon]

This is why I'm glad my HOA only has a pool and a tennis court. The less community property there is to maintain, the less exposure I have to a shocking special assessment.

I have an old SFH where the main drain line is being breached by tree roots and will eventually need to be replaced. That will probably run five to six thousand dollars and will likely be the most expensive repair needed until the next time the roof wears out.

Our old development didn't have a pool or a tennis court. There was a very small playground. After hurricane Irene damaged the sandbox they just got rid of it, though the slide and two swings remained. There was a lot of little stuff that made it obvious that the property wasn't well managed or that many units weren't paying their HOA fees. I'm glad we were renting.

[paddedhat]

We just had a friend who cancelled a closing, a few days before buying a condo on the beach, in North Carolina. He ended up listening to a neighbor complain about the upcoming $40K special assessment. The realtor was hoping to close the deal without mentioning it. The assessment represented a bit less than 25% of the sale price. Needless to say, he was a bit unhappy with the realtor.

[Bearded Man]

Thus why I don't want to buy a house with HOA.

I'm curious, do you think only homes in HOA's are susceptible to rot below the siding??

This is why I'm glad my HOA only has a pool and a tennis court. The less community property there is to maintain, the less exposure I have to a shocking special assessment.

I have an old SFH where the main drain line is being breached by tree roots and will eventually need to be replaced. That will probably run five to six thousand dollars and will likely be the most expensive repair needed until the next time the roof wears out.

The OP stated that the special assessment may be for rot under the siding. How does the fact that your HOA only has a tennis court and pool factor in as relevant here? Do you not have siding?

[coppertop]

The thing about HOA's is that if you own your own home free of an HOA, YOU decide when and how much to spend on maintenance and repairs.  If you have an HOA, THEY decide how much to spend and when and how often.  My husband and I might decide, for example, we need new windows, but we can't afford them this year and we will revisit the situation next year.  Even more likely, my husband would install the windows himself.  If we were enslaved to an HOA, they would decide when to do the windows, how much to spend and charge us an assessment for, and very definitely they would hire a contractor to do the work.  I will never live in a place with an HOA again if I can possibly help it. 

[Chris22]

The thing about HOA's is that if you own your own home free of an HOA, YOU decide when and how much to spend on maintenance and repairs.  If you have an HOA, THEY decide how much to spend and when and how often.  My husband and I might decide, for example, we need new windows, but we can't afford them this year and we will revisit the situation next year.

Exactly right.

I will never live in a place with an HOA again if I can possibly help it.

I agree, but you're also confusing HOAs for attached buildings (condos/townhomes) with HOAs for single family homes, to some extent.  Most single family home HOAs aren't going to be subject to special assessments except for maybe on shared common areas (fix the pool, for instance).  And it's really hard (impossible?) to avoid some form of HOA in a condo/town home. 

[AH013]

Largest HOA assessment I've heard of is, "Sorry, you're SOL for the full value of your property"

It was a case example in my risk management class.  Background was some bored retiree rube ran for and was elected to be the Treasurer of the HOA.  After a little while in the role, he ended up having a friend who happened to be an insurance agent (don't we all have "that guy/girl"?) who could "beat his rate" for whatever the HOA was paying for master insurance, and give him a bit of a kickback on his commission.  You can probably guess where this is going.

"Buddy" beats his rate, never mind it is inferior coverage.  Treasurer cancels old insurance (as in stops paying premiums).  Major fire happens, levels all the units.  The HOA goes to put in the insurance claim and come to find out, they aren't fully covered like they used to be (money saved by going from replacement cost to depreciated value coverage), and end up short to the tune of having to level a special assessment for $10k per owner that should have been $0.  Owch, right?

The owners aren't happy that, without authorization and against the bylaws, the Treasurer changed policies.  They petition the original insurance company to reinstate the policy under the appeal that the Treasurer wasn't authorized to cancel the policy.  Original insurance company points to rule that if the premiums aren't paid, the policy is void.  Oh well, it was worth a shot right?  Guess we'll all have to pay that $10k, right?

It gets worse.  2nd insurance company finds out from the 1st insurance company that the Treasurer wasn't authorized to purchase a policy.  2nd insurer points to a clause in their agreement that they're conducting with a "duly authorized representative of the HOA", and as the Treasurer had no authority to buy the policy, it too is void.  Premium returned.

Yeah.  That rube retiree's $250k in wealth (other than his freshly burned down condo now worth $0) would have been just about enough to pay to clear all the rubble from the lots so they could sell the land...except it was 100% protected from judgement because it's in 401ks/IRAs.  Each and every unit owner had to eat a 100% loss, on what were about $300k units.

HOAs and their boards are a mother.

[JoJo]

Thus why I don't want to buy a house with HOA.

I'm curious, do you think only homes in HOA's are susceptible to rot below the siding??

This is why I'm glad my HOA only has a pool and a tennis court. The less community property there is to maintain, the less exposure I have to a shocking special assessment.

I have an old SFH where the main drain line is being breached by tree roots and will eventually need to be replaced. That will probably run five to six thousand dollars and will likely be the most expensive repair needed until the next time the roof wears out.

The OP stated that the special assessment may be for rot under the siding. How does the fact that your HOA only has a tennis court and pool factor in as relevant here? Do you not have siding?

Unfortunately the assessment is just for regular siding.  If there's rot it may be much more than $27,000

[nobodyspecial]

Not having an HOA for a condo could be worse.
I rented in a place where the organizer of the HOA moved out and nobody else wanted to do it - so they hired a letting agency to manage the property. Their fee was low but every little job they could find to do - they would send their own tradesmen to perform.

They got around it by showing quotes for other contractor's call out fee to change a single light bulb was more than the $100 they charged.
 

[MayDay]

I was on the board for our old HOA for SFH's.  The HOA just covered property maintenance of common areas (mowing, gardens, etc) so fees were low, ~200 a year.  Well despite the low fees, we had gobs of money- we needed maybe half that in dues.  So over time the reserves were becoming insane.  But we were advised to keep the fees flat, and not decrease them, because someday in 20 years people will be pissed that we had to increase them.

It was a bizarre power structure.  We had a PM that helped us (handled mailings, collection of fees, legal stuff with transferring deeds when houses were sold).  All this stuff was way beyond the board's scope to manage.  The first employee was amazing, but she left, and the new guy was a moron.  If we hadn't left the 'hood, I was in favor of firing the PM and getting a new one.  But as a board member, it very much felt like I had no expertise in how to do any of this stuff- how would I even go about doing that? 

If I ever buy into a HOA property again, I will definitely plan to be on the board.  And if it is a condo, I will do a LOT of research beforehand.  I was comfortable with the level of risk for SFH's but condos are a whole 'nother ball game. 

[JoJo]

This is a condo with 20 units.  I think the $27,000 is just the start... there's lots of cosmetic stuff too (replacing parking lot, cement, railings etc) that isn't included.  And this is only a 800 square foot condo in 2 buildings!

It doesn't help that one of the unit owner brought a suit against the HOA that went all the way to court last year (complained about people above them that put in hardwood floors, ants in the unit, and general not maintaining).  The judge ruled in favor of the HOA but our legal costs to defend were $100K -  or $5K per unit owner.  We're hoping to recover some but can't count on it.

Well.. at least it cost that unit owner $5k extra as well... given he is part of the HOA (how do you go about essentially suing yourself is anyones guess but hey).

It cost them way over $5K... I'm thinking they spent at least $50K for their own lawyer.  The details are ridiculous... they asked the association to pay $10K for soundproofing and they said no.  They took it to arbitration and the board was then willing to just pay the 10K to make them go away but at the last minute they up'ed it to 30K so everything fell apart.  Eventually it went up to court.  They called 14 witnesses (including 6 board members, 2 people from our mgmt company, 2 people from pest control, 2 owners above them) and wanted 10 full days of the court's time.  Thank God the judge refused that at the end and made them cancel most of the witnesses to get it down to a 5 day case.  They are just not reasonable people.

[boarder42]

i live in a lake community so we ahve an HOA.  to maintain everything.  Its all run very well and we have stock piles of cash.  They did however waste a bunch of money suing over a purple play set. 

Info here:

http://fox4kc.com/2015/08/29/judge-rules-in-favor-of-controversial-purple-playset-in-lees-summit/

waste of time and money and the playset doesnt even look that bad.

Nonetheless we're still very solvent so its not a huge deal.

[jackiechiles2]

When was the place built?  With that kind of assessment, I'd be looking at suing the builder.

[JoJo]

When was the place built?  With that kind of assessment, I'd be looking at suing the builder.

Was apartments built in 1977.  Converted to Condos in early 2007 - absolute peak of market here.  We actually did sue the developer and insurance for the conversion.  Won about $400K after lawyer fees and there's no more to get there.  $225K of that went for a new roof and replace a couple rotting chimneys & deck work.  After the recent owner's lawsuit we're down to $150K and the siding project & painting will be around $500K.  That doesn't include some cosmetic stuff that folks have been complaining about that probably totals another $100K  (parking lot, internal halls painting, replacing some rusty railings, etc.)

[Reynold]

I've known more than one person who bought into a new development, and when something turned out to have been done wrong (for example bad plywood used for the roofs, they all had to replaced) they find out that the "builder" routinely forms a company, builds a development, closes the company and/or declares bankruptcy to avoid paying contractors, and starts a new company.  Nobody to legally sue. 

[onlykelsey]

I got hit with a 64K one last year in my 12-unit Manhattan apartment (condo).

[paddedhat]

I'm in an area of HOA controlled resort communities that often have lakes as amenities. A while back, after a few unpleasant failures, the state required complete structural reviews of any lake that is contained within a manmade dam. Our community ended up dropping four million dollars to repair our failing dam. Fortunately, we live in a large community, and they were savvy enough to get a govt. grant to cover half the costs, so it was a pretty light hit at $1000 per lot, payable in two yearly payments. That said, other communities had to drain lakes and breach dams, since they just couldn't afford to make them safe. Hell of a situation to own a lakefront single family home that no longer has any water to look at.

[onlykelsey]

Yikes! What happens if people can't afford large assessments? Can they force you to sell or do they just put a lien on your unit and recoup later? What about seniors on fixed income? Are they given the boot too?

I've been considering selling my house and possibly downsizing g to a small condo at some point but after reading this thread I don't think I'd go that way - will just rent or get another SFH without an HOA.

For our apartment building, everyone (except me) bought when the units were appraised at ~55% of what they're worth now, so they took home equity loans.  I cash flowed some, HELOC-ed some, and 401(K) loaned some.  If people don't pay and there's not a loan/pay over time option, the board is more or less required to begin proceedings on those units.  It's a crapshoot, though, because once one unit is being sold at auction after a (presumably) lengthy process kicking the owner out, everyone's unit falls in value.

I don't think I'd buy a condo if I weren't in a large city and downtown.  It's not like I can buy a SFH in Manhattan.  Even if I could, a huge part of the price is just that it is legitimately VERY expensive to get work done in Manhattan, so it'd be just as expensive if it were my own building.

[slugline]

This is why I'm glad my HOA only has a pool and a tennis court. The less community property there is to maintain, the less exposure I have to a shocking special assessment.

I have an old SFH where the main drain line is being breached by tree roots and will eventually need to be replaced. That will probably run five to six thousand dollars and will likely be the most expensive repair needed until the next time the roof wears out.

The OP stated that the special assessment may be for rot under the siding. How does the fact that your HOA only has a tennis court and pool factor in as relevant here? Do you not have siding?

I have no siding on a house with brick walls, but that's not really the point. The point is that the HOA can only levy assessments for repairs on communal property. For repairs to my own house (including the walls), I'm in control of when and how and how much it will cost to get done, because my house is not communal. Hence, the less property maintained by the HOA, the less exposure an individual homeowner has to big surprise assessment fees.

[Thinkum]

Reading this makes me glad we didn't buy a condo, even if they are sometimes more efficient. I cannot stand having others control my money and having the say as to when maintenance is taken care of. I also do not like trusting that others have my best interest in mind when dealing with something as important and expensive as housing.

I remember an old co-worker told me his condo HOA had told implemented a $16K special assessment. It was the first time I had ever heard about SA's. Looking back, I owe that guy a beer.

[onlykelsey]

To be fair, I think sometimes condo associations (at least in big crowded cities) get backed up against the wall by teh Department of Buildings in a way that single family homeowners do not.  Once the DOB is involved, you do exactly what they say on their timeline.  And I'm not sure the DOB is even out of line with its sometimes crazy demands. The potential loss of life and property if my building collapsed is huge.  It would possibly pull down the one next to it with which we share ~60' of brick wall, it would definitely throw debris in to six other lots including a church with a daycare out back, and it would fall in to a public park where people go to garden with their families.  if it were bigger, I'd worry about the effects on the pipes/gas/subway underneath.

[JoJo]

  I'm sort of wondering if I should suggest to see if there's a buyer that wants to buy out the property.  We'd avoid the assessment, we could return about $10K per unit that's sitting in reserve, plus whatever we could get for the sale.

This easily could be a tear down - other apartment buildings built nearby in the same time frame have started being torn down to build nicer townhomes and office buildings.  Our condo is an especially large lot with great location/view.

Coming to a collective price per homeowner would probably be impossible.  The unit sizes are similar but the location in building & views are so different that the selling prices in 2007 varied from $400K-$550K.  Some people also negotiated more parking spaces.

[MrFrugalChicago]

Why do people always refer to HOAs as THEY.

My last place had an HOA. It was okay.. how did I make sure it was OK?  I was on the board. Used my MMM knowledge as treasurer, and generally kept things above board.

Don't just be a member and hate it, join the leadership and see the other side of the problem ;)

[Chris22]

Why do people always refer to HOAs as THEY.

My last place had an HOA. It was okay.. how did I make sure it was OK?  I was on the board. Used my MMM knowledge as treasurer, and generally kept things above board.

Don't just be a member and hate it, join the leadership and see the other side of the problem ;)

Having to actively participate in something just to ensure I don't get fucked by it doesn't really appeal to me.  I'm a big "live and let live" guy, don't tell me what to do with my property and I promise to do the same WRT yours.

[asiljoy]

We just had a friend who cancelled a closing, a few days before buying a condo on the beach, in North Carolina. He ended up listening to a neighbor complain about the upcoming $40K special assessment. The realtor was hoping to close the deal without mentioning it. The assessment represented a bit less than 25% of the sale price. Needless to say, he was a bit unhappy with the realtor.

Don't you have to disclose assessments if you know about them before the sale?

[Spitfire]

The largest one I have ever had was $5k for an insurance deductible to repair the roof after a hurricane. The HOA took out a loan and we had to pay an extra $89/mo for 5 years. Of course, if it was my own SFH I imagine I would have had to pay for that too, so I couldn't complain too much. It sounds like the OP would have been screwed if the same thing happened in a SFH as well. Just bad luck. 

It can be risky putting your maintenance in someone else's hands, but many times board members are volunteers who are trying to help the community. You can always run for the board yourself if you need to have a little control. That said, having a SFH and doing everything on your own terms will always give the most peace of mind.

[JoJo]

We just had a friend who cancelled a closing, a few days before buying a condo on the beach, in North Carolina. He ended up listening to a neighbor complain about the upcoming $40K special assessment. The realtor was hoping to close the deal without mentioning it. The assessment represented a bit less than 25% of the sale price. Needless to say, he was a bit unhappy with the realtor.

Don't you have to disclose assessments if you know about them before the sale?

I would believe so, otherwise you'd surely get sued.  However, I don't know what the laws are when an assessment is being discussed but not final.  One of the units in my condo is pending.  They put it up for sale the week after we got the letter for the annual meeting and stating we'd be discussing an assessment.  The assessment amount is still pending... we voted to do some sampling around the building to determine if we really need new siding around the whole building or can just patch in a few known areas with water intrusion.

[Jack]

$27k per unit for siding sounds completely insane. I'm almost certain I could re-side my parents' McMansion for that price. Given that a condo owner should be responsible for a smaller ratio of exterior wall square footage to floor space square footage than a single-family house owner, I don't understand how it can be that expensive.

[onlykelsey]

$27k per unit for siding sounds completely insane. I'm almost certain I could re-side my parents' McMansion for that price. Given that a condo owner should be responsible for a smaller ratio of exterior wall square footage to floor space square footage than a single-family house owner, I don't understand how it can be that expensive.

We repointed brick, and a huge portion of the costs were scaffolding.  It gets up there in cost on more than two-story buildings, especially in dense areas.

[Jack]

I'm in an area of HOA controlled resort communities that often have lakes as amenities. A while back, after a few unpleasant failures, the state required complete structural reviews of any lake that is contained within a manmade dam. Our community ended up dropping four million dollars to repair our failing dam. Fortunately, we live in a large community, and they were savvy enough to get a govt. grant to cover half the costs, so it was a pretty light hit at $1000 per lot, payable in two yearly payments. That said, other communities had to drain lakes and breach dams, since they just couldn't afford to make them safe. Hell of a situation to own a lakefront single family home that no longer has any water to look at.

Around here, we had an entire (very small) city that had that sort of problem. (Apparently, FEMA eventually agreed to bail them out.)

[iris lily]

Yikes! What happens if people can't afford large assessments? Can they force you to sell or do they just put a lien on your unit and recoup later? What about seniors on fixed income? Are they given the boot too?

I've been considering selling my house and possibly downsizing g to a small condo at some point but after reading this thread I don't think I'd go that way - will just rent or get another SFH without an HOA.

My mother bought a condo in an old, 1920's building. It had  Low condo fees, delayed maintenance, cond board run by peole who know  nothng about buildngs. A recipe for the $$$ assesment that came later. She was fine since she had money but the eejits who had been pissing away cndo fees n yard decorations had to sell.

Also, lots of stories of condo owners around here who dont pay fees. Sure, theoretically the condo assoc,takes them to court but nothng real results.

I would never ever ever buy a condo in flyover country. I keep hearing these tales of woe.I wpuld lways rent, first.

[katstache92]

Don't just be a member and hate it, join the leadership and see the other side of the problem ;)

This works... assuming you can get elected.  Where I live they use a proxy system so one person can go around and collect as many votes from their neighbors as they want.  It's astonishingly easy to not get elected if you're "on the other side," even if you have experience on another HOA board.  Oh well, not much I can do about things until next year when I try again.  Unless by then I've given up and decided to sell, which is very much an option.

Don't you have to disclose assessments if you know about them before the sale?

As others have said, yes you do need to disclose knowledge of an upcoming assessment.  It's a question on the disclosure forms that I have seen and used.  This might vary by state, I'm not sure.  A quick email to a local realtor would get you an answer.

I'm pretty terrified of a large special assessment.  They're planning on replacing the tennis courts to the tune of over $500/unit - but claim there won't be a special assessment.  All while whining about the low reserves fund.  Biggest mistake of my life so far was buying this condo (3 months before I found MMM, gah!)  The market has turned a bit sour so selling right now is not ideal.

[bacchi]

I've known more than one person who bought into a new development, and when something turned out to have been done wrong (for example bad plywood used for the roofs, they all had to replaced) they find out that the "builder" routinely forms a company, builds a development, closes the company and/or declares bankruptcy to avoid paying contractors, and starts a new company.  Nobody to legally sue.

CORPORATION, n. An ingenious device for obtaining individual profit without individual responsibility.
-- Amborse Bierce

[onlykelsey]

I've known more than one person who bought into a new development, and when something turned out to have been done wrong (for example bad plywood used for the roofs, they all had to replaced) they find out that the "builder" routinely forms a company, builds a development, closes the company and/or declares bankruptcy to avoid paying contractors, and starts a new company.  Nobody to legally sue.

CORPORATION, n. An ingenious device for obtaining individual profit without individual responsibility.
-- Amborse Bierce

Yup, that's what happened to us.  Of course we have a judgment against them, but it's worthless. And then contractors wonder why we're up their butt about things sometimes, haha.

[Cassie]

In the past we have owned condos and what we have seen it is best to live in a complex with 200 units because then there are many people to split the bills with. We lived in one that only had 40 units and an inside pool.  The board wanted to charge everyone 20k to fix it and other improvements. My hubby is a PE in civil engineering so was able to get that # down to 4k per unit.  Some people wanted to close the pool permanently but some bought into that building for that very reason.  If we get really old and no longer want a house I would make sure it had lots of units and a big reserve fund.

[paddedhat]

In the past we have owned condos and what we have seen it is best to live in a complex with 200 units because then there are many people to split the bills with. We lived in one that only had 40 units and an inside pool.  The board wanted to charge everyone 20k to fix it and other improvements. My hubby is a PE in civil engineering so was able to get that # down to 4k per unit.  Some people wanted to close the pool permanently but some bought into that building for that very reason.  If we get really old and no longer want a house I would make sure it had lots of units and a big reserve fund.

Well stated. Our lake community that I discussed previously has 4K lots,  roughly 60% built out.
We run a reserve of several million, and spending $400-800K per year to repave roads is just SOP. Other smaller communities in the area vary from very high dues (10x ours) and spectacular amenities, to dead broke and trying to hustle up enough cash to fill in the potholes on the "gravel" roads, which look a lot more like dirt roads to me. Over time this radically impacts resale value, with our community bringing a serious premium over adjoining smaller ones that are poorly run.

[asiljoy]

Yikes! What happens if people can't afford large assessments? Can they force you to sell or do they just put a lien on your unit and recoup later? What about seniors on fixed income? Are they given the boot too?

I've been considering selling my house and possibly downsizing g to a small condo at some point but after reading this thread I don't think I'd go that way - will just rent or get another SFH without an HOA.

My mother bought a condo in an old, 1920's building. It had  Low condo fees, delayed maintenance, cond board run by peole who know  nothng about buildngs. A recipe for the $$$ assesment that came later. She was fine since she had money but the eejits who had been pissing away cndo fees n yard decorations had to sell.

Also, lots of stories of condo owners around here who dont pay fees. Sure, theoretically the condo assoc,takes them to court but nothng real results.

I would never ever ever buy a condo in flyover country. I keep hearing these tales of woe.I wpuld lways rent, first.

As a former owner of a town home in flyover country, my recommendation would actually be to analyze the market to see if it makes sense to buy, then ask for the HOA's financials to see if they're solid, then meet the board to see if they're crazy or not. Our association was small (16), but was set up and run by smart people originally who then handed down pretty bullet proof processes to future boards. All big purchases up to 30 years in advance were planned with their own dedicated funds, then had an additional emergency slush fund that needed to be funded up to whatever the current deductibles were on the insurance plans; what I thought was particularly smart was that they planned for only 80% of the units to be paying dues at any particular time so they were always working from conservative plans.

We lived there 7 years and the first year the dues were $200 per month and when we left, they were $225, but the board was contemplating reducing them back to $215 because the funds were all well ahead of where they needed to be.

tltr; condos/townhomes can be great buys, but I'd start investigating strength of the home owner's association before I looked at the view in the backyard or at the pretty tile in the kitchen.

[Thinkum]

As a former owner of a town home in flyover country, my recommendation would actually be to analyze the market to see if it makes sense to buy, then ask for the HOA's financials to see if they're solid, then meet the board to see if they're crazy or not. Our association was small (16), but was set up and run by smart people originally who then handed down pretty bullet proof processes to future boards. All big purchases up to 30 years in advance were planned with their own dedicated funds, then had an additional emergency slush fund that needed to be funded up to whatever the current deductibles were on the insurance plans; what I thought was particularly smart was that they planned for only 80% of the units to be paying dues at any particular time so they were always working from conservative plans.

We lived there 7 years and the first year the dues were $200 per month and when we left, they were $225, but the board was contemplating reducing them back to $215 because the funds were all well ahead of where they needed to be.

tltr; condos/townhomes can be great buys, but I'd start investigating strength of the home owner's association before I looked at the view in the backyard or at the pretty tile in the kitchen.

Very nice to hear the other side of the HOA spectrum. If we ever buy a condo/townhome, I planned on doing exactly that; looking over their financials like I was looking over a corporations financial statements. If I could meet the board members as well, that would be great. Thanks for the tips.

[iris lily]

Yikes! What happens if people can't afford large assessments? Can they force you to sell or do they just put a lien on your unit and recoup later? What about seniors on fixed income? Are they given the boot too?

I've been considering selling my house and possibly downsizing g to a small condo at some point but after reading this thread I don't think I'd go that way - will just rent or get another SFH without an HOA.

My mother bought a condo in an old, 1920's building. It had  Low condo fees, delayed maintenance, cond board run by peole who know  nothng about buildngs. A recipe for the $$$ assesment that came later. She was fine since she had money but the eejits who had been pissing away cndo fees n yard decorations had to sell.

Also, lots of stories of condo owners around here who dont pay fees. Sure, theoretically the condo assoc,takes them to court but nothng real results.

I would never ever ever buy a condo in flyover country. I keep hearing these tales of woe.I wpuld lways rent, first.

As a former owner of a town home in flyover country, my recommendation would actually be to analyze the market to see if it makes sense to buy, then ask for the HOA's financials to see if they're solid, then meet the board to see if they're crazy or not. Our association was small (16), but was set up and run by smart people originally who then handed down pretty bullet proof processes to future boards. All big purchases up to 30 years in advance were planned with their own dedicated funds, then had an additional emergency slush fund that needed to be funded up to whatever the current deductibles were on the insurance plans; what I thought was particularly smart was that they planned for only 80% of the units to be paying dues at any particular time so they were always working from conservative plans.

We lived there 7 years and the first year the dues were $200 per month and when we left, they were $225, but the board was contemplating reducing them back to $215 because the funds were all well ahead of where they needed to be.

tltr; condos/townhomes can be great buys, but I'd start investigating strength of the home owner's association before I looked at the view in the backyard or at the pretty tile in the kitchen.

Younarwnright.
But most people ncludng me wouodnt be able to read the balance sheet of an HOAto know if it is solvent. I know that is standard advise for peole contemplatng a cond puechase and it is good advice.

[libertarian4321]

Got some bad news last night.  HOA dues going from $310 to $395 a month and there's plan to have a $27,000 assessment per unit (may be more if rot is found below the siding).

WTF?  For that kind of money, your homeowners association better be providing you with hookers and blow (or wine, women and song, if you are over 50).

What the Hell could possibly warrant that kind of extortion?

Good God, we pay $50 per year to a VOLUNTARY HOA.  The neighborhood looks fine.  Though I'll admit, we don't have HOA nazis measuring the height of our grass every week- though some would say that's a good thing.

Can anyone tell me why mandatory HOA's exist, and why anyone would voluntarily subject themselves to one?

[libertarian4321]

The thing about HOA's is that if you own your own home free of an HOA, YOU decide when and how much to spend on maintenance and repairs.  If you have an HOA, THEY decide how much to spend and when and how often.  My husband and I might decide, for example, we need new windows, but we can't afford them this year and we will revisit the situation next year.  Even more likely, my husband would install the windows himself.  If we were enslaved to an HOA, they would decide when to do the windows, how much to spend and charge us an assessment for, and very definitely they would hire a contractor to do the work.  I will never live in a place with an HOA again if I can possibly help it.

I'd sooner have my testicles slowly crushed in a vice than subject myself to the arbitrary and often stupid whims of an HOB.  I have no idea why anyone would voluntarily submit to an HOA.  There are plenty of perfectly good homes that aren't subject to an HOA.

[coppertop]

I can remember newspaper articles about an attorney who bought a single family home with an HOA.  He installed an outdoor play system for his kids, but it was not the kind the HOA approved - so they demanded he take it down.  As I recall, he fought them in court and I believe he won. 

When husband and I lived in a condo, members of the board would actually walk around with a clipboard, peering at people's curtains to make sure they showed white to the outside.  A neighbor received a warning letter about "trash" on her porch when, in fact, it was a bag full of clothing waiting for a Purple Heart pickup.  Everything has to be cookie cutter - doors all painted the same; exactly the same kind of storm door; better not have a tomato plant growing outside your door.  It's horrible and takes away all individuality.  We now live in a mid-century Cape Cod on 3/4 acre of ground.  No HOA, naturally.  It needs work, but my husband is doing it in his own time and within our budget.  He can change oil in our vehicles in our driveway; we can plant anything we want to and have a big vegetable garden.  I chose the paint color for our front door.  We can hang laundry on outdoor lines, which is better for the environment and saves on our electric bill.  HOA's are a money suck as well as an individuality suck. 

[Chris22]

Got some bad news last night.  HOA dues going from $310 to $395 a month and there's plan to have a $27,000 assessment per unit (may be more if rot is found below the siding).

WTF?  For that kind of money, your homeowners association better be providing you with hookers and blow (or wine, women and song, if you are over 50).

What the Hell could possibly warrant that kind of extortion?

Based on the wording (per unit) I'm assuming the poster you were responding to is in a condo/townhome, in which case the assessments tend to be much higher to cover maintenance, groundskeeping, cleaning of common areas, etc etc etc.  Versus you apparently are in a SFH, and the assessments likely don't cover much (you mow your own lawn, for instance). 

Condo/townhome HOAs are very different than SFH HOAs and not really comparable.

Can anyone tell me why mandatory HOA's exist, and why anyone would voluntarily subject themselves to one?

For SFHs, right there with you, only reason I can see for an HOA is to support common amenities like a neighborhood pool.  But just a group of people who exist to make rules on what you can do on your property?  Agreed, it's stupid and I'd never buy into one.

For Condos/townhomes, again, someone has to management the maintenance and upkeep of all the stuff the owners DON'T individually manage, thus the HOA.