Cohousing-L Mailing List: Re:Homeowners' Association Dues

[David Mandel (dlmandel]

Reading Monica's compilation of previous replies on the subject of
homeowner "dues" (I'm impressed by your organization) and recognizing my
own previous one therein, I'm prompted to add a couple of other short
points:

1. We recently voted a 30% increase across the board. This came when we
realized that we had grossly underbudgeted for reserves for repainting our
exteriors. Some walls are going to start needing it soon. We're not sure
what we were thinking; maybe that we'd do all the labor ourselves
(chuckle). Anyway, our assessments now range from around $117 to $169,
somewhat higher than they would have needed to be had be budgeted correctly
from the start.
     The obvious lesson here: Make up your budgets carefully and
re-evaluate them at least annually. California law requires a written
reserve study every three years. Other states are probably similar. It was
no fun to have to approve such an increase, and it creates inequities
(someone who sells now will have paid less then their fair share; someone
who buys now will be paying more, for instance.)
     By the way, after some discussion, we decided to make the increase a
straight 30% and not try to figure out whether painting should be allocated
by unit or proportionally to size. If felt right, because in fact it's part
both.

2. Don't get blown away by the differences in numbers from one community to
another. The factors vary a lot. Ours, for instance, is still pretty cheap
considering that the community is responsible for maintaining and replacing
roofs, painting exteriors, holding a comprehensive insurance policy
(including flood) for all the buildings and paying city utilities such as
water, sewerage, garbage. Communities developed on the lot model with each
owner responsible for these things may pay a lot less per month in
assessments.

3. We need to refer to these charges as "assessments," not "dues." The
latter implies that they're voluntary, and in the unlikely event that a
member fails to pay and the community has to sue or foreclose, it's
important that it be clear they are mandatory.
        We learned this, by the way, at a recent workshop sponsored by an
accounting firm that specializes in serving homeowner associations. There's
a whole network out there of such HOA, with newsletters, lobbyists, trade
shows, seminars, classes, etc. We are probably about to join an association
of HOAs, paying dues (correct term here) of $75 a year. Anyone interested
in more information can ask me.

David Mandel, Southside Park.