Cohousing-L Mailing List: Re: Homeowner's assocation dues

[David Mandel (dlmandel]

Denise of Sebastopol wrote:

>We are trying to figure out how to allocate the HOA dues that we will need
>to start collecting once we move in. Various schemes suggest themselves:
>divided equally by the number of units, by the square footage of each
>unit, by the number of people in each household, and various combinations
>of the above.  If anyone has already written about this, please just let
>me know and I will try to pull it from the archives. Any suggestions or
>information about how you have done it would be helpful.
>

Hi, all.

I know I and others have written about it before; do check the archives.
But we have had some new developments and it's been awhile, so I'll cc the
whole list. My contribution to the people complaining about lack of volume.
;)


1. You can do whatever you want.

2. The standard way condo associations do it is that SOME expenses are
divided equally per unit and others allocated by square footage, so the
result is a hybrid.

3. If you look through your budget line items, most will obviously fall
into one or another of the above two categories. There will be some gray
areas, of course.

4. You can have a professional condo management person do it for you. We
did that initially because we were nervous about appearing "different" to
lenders and the state Dept. of Real Estate. But that might be less of an
issue now with more cohousing condos on the books.

5. When we adopted that standard formula initially, we resolved to
rediscuss it a year later in light of a widely stated desire to take other
factors, like household size and even income, into account.

6. It's been 3-1/2 years and we haven't revisited the issue seriously.

7. I was one of those who favored a more complex formula involving the
other factors and even started developing such a formula, but I have become
much less moved to push it. Partly, it's the complexity involved (household
sizes and incomes change; reducing or raising one household's dues would
require recalculating everyone else's). Partly the realization that the
differences would be very small, especially since income and household size
seem to have a generally inverse correlation, given the same unit size.
About a year ago we discussed it briefly in our
administration/finance/legal cluster and announced to the group that we
recommended against any change but would work with anyone who felt strongly
in favor to facilitate. No one has said a thing since.

8. We did adopt an income linkage for a special assessment for capital
expenditures we adopted early on when we realized that the expected
leftover construction money had vaporized. Each unit size has a range of
monthly fee amounts for self-declared high, medium and low income
households (no set formula; each declares as it sees itself). This is a
small amount, averaging about 5% of the regular assessments.

9. I anticipate the issue may arise again as there is pressure lately to
hire more paid labor to do maintenance tasks that aren't getting done very
well. I'm of the faction that says let's try harder to do most of these
things ourselves, but there will probably be some movement toward paying
for more services, which will of course require higher assessments. As you
know, we have a wide range of incomes, including some very low income
people, and this might stimulate a new look at income-linked assessments,
which I still favor in principle.

Let us know what you decide. ...  Any other groups do anything interesting
in this regard lately?

David Mandel, Southside Park, Sacramento