Problem With An HOA And Experience With Homeowners Associations
This Article On Experience With Homeowners Associations Was Written By Bob Vogel
Have you ever wondered where your HOA fee goes every month or every quarter when you pay it? Have you ever wondered why a friend of yours might pay as much or less than you do and they enjoy more amenities than you could imagine? I have wondered this as well, on the outside, some things just don’t seem to add up. I am not accusing anyone of wrongdoing per say, but the numbers just don’t add up.
Experience With Homeowners Associations: HOA Fees
Let’s take for example my community, and I pay $35/month or $105/quarter, which in reality isn’t a huge price to pay at all! For this amount we get a clubhouse, a swimming pool, a wildlife pond and a park. We don’t have a ton of amenities, but for $35/month, I wouldn’t expect too much more. So let’s take it to another level, with 400 homes, there is a pot of over $150,000 collected every year from HOA fees. Now I am not sure what they spend their money on, but the pool doesn’t work off and on throughout the summer for days at a time, the pond has absolutely zero upkeep and is overgrown and a huge breeding ground for mosquitoes, and the clubhouse requires $200 just to rent it. I would be very curious to see just where the funds go to support this. In theory, there is about $12,000 per month to be used on upkeep and bills. Being an accountant by trade, I want to put my auditors hat on and see what is going on. Now they could possibly have some bad contracts/agreements or it could just be mismanaged.
Experience With Homeowners Associations: Are HOA Fees Fair?
The community we were looking at prior to moving to Hampshire, had a monthly HOA fee of $70 per month which is double what we are paying. However, they have more than double the amenities that we currently have. In their community they have 3 swimming pools (indoor and outdoor), 3 fishing ponds that are stocked, miles of walking paths and trails, multiple parks for kids, a clubhouse with party rooms, a library, and workout facility. This in and of itself would probably cost more from Lifetime Fitness if you got a monthly membership for 1 person.
Experience With Homeowners Associations: Where Do HOA Fees Go?
Now how can this community, granted with more homes, be able to afford all these amenities for their residents, and I am stuck with a hit or miss pool that may or may not be heated on any given day? I would gladly pay more than what I currently am to get these options. This brings me full circle for the need of the HOA to be even more transparent in what their funds are actually going towards? I feel as if my HOA fees is wasting $150,000 as the money isn’t even getting saved as they are operating annually on a “break even” basis. This means that we aren’t putting any money away should something catastrophic happen, and we are staring at a special assessment at any given time things don’t go exactly right.
I understand that we don’t have the bank roll that other communities may have, but all I ask for is that the grounds be taken care of and amenities be in working order 99% of the time. Things can happen and I understand that, but it seems too many things are happening to affect the day-to-day functionality. I don’t think that I am asking for too much, but I would just like to see some answers. If I were to find out there are certain items out of our control that affects us, then so be it, and I can deal with it. All I am looking for is some answers.
Let this be a lesson to all the homebuyers out there that before purchasing a home, look into the HOA and check the price that you are paying and what exactly you are getting. Don’t live somewhere that will fill you with regret and anger, it isn’t worth it. Do your research and make an educated decision!
About The Author: Bob Vogel
Bob Vogel is a senior writer for Gustan Cho Associates Mortgage And Real Estate Information Center and is an accounting manager by trade. Bob Vogel is an expert in all areas of accounting and is a consultant to many mortgage loan originators, both commercial and residential mortgage loan officers. Bob Vogel can analyze complicated business tax returns and often has commercial mortgage underwriters contact him for advice. We look forward to future articles by Bob Vogel in the coming days and weeks.