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rated:
Hi everyone.
I need a little advice on the subject of rising HOA fees. I live in a mixed community with single detached homes and town homes. We have a cabana with a pool as the common area. When I moved here the hoa fee was $350 for detached homes. In 2016 the fees increased to $375 because people weren't paying them. I wasn't happy about it but it wasn't that big of a deal to me. This year the fees increased dramatically to $600 due to delinquency. At the meeting in 2016 they gave us a break down of how the money is being spent.

Here is the problem that I have. I don't feel as though the money is being spent well and I've stayed this at the meeting. although we (single detached) pay less than the townhomes owners. Townhome owners pay $1440 a yr which is included in their mortgage. however, our dues go towards repair and maintenance of their homes in addition to common ground. We have to cover our own maintenance such as roof repairs, painting our homes, and yard maintenance that's why our dues are cheaper. Keep in mind, no one in my community have a big yard our yard is slightly larger than the Townhomes.
When buying the home the seller told me my hoa dues would cover the common area maintenance.

We also pay $15,000 in legal but rarely recover money from delinquent homeowners and if we do collect money it's nothing more than the hoa fee itself. We 15,000 in administration, 18,000 for management, and 4,880 for insurance. That's not including pool maintenance or common area maintenance.

With that being said I don't want my home forclosued due to not paying hoa fee in full. But I can't afford to continue to pay more due to other ppl not paying either. So should I try to sell or just find another home and let this house go?

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I'm in FL and we do this all the time.  We now have almost 100% of the homes up to date on their dues.

cruisencode (Apr. 25, 2017 @ 7:21a) |

I totally second this. Am on the board of a HOA myself and we are doing everything we can in our community to keep the c... (more)

tsanju (Apr. 25, 2017 @ 8:56a) |

You can afford another $300-ish a year or you shouldn't own a home anyway.
As HOAs are present in MOST of the new communi... (more)

dcg9381 (Apr. 26, 2017 @ 9:10a) |

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rated:
More info needed to answer this. Do you have equity in the home? (I assume no if you are entertaining the thought of just walking away).

How is your credit, are you ready to nuke it by getting foreclosed on.Do you have some other place to live, would you just become a renter? Can you qualify to buy another home first, close on it and then stop paying your mortgage/dues on the old one?

Also.. nothing you can do about it now, but your first mistake was going on what the seller told you about the HOA dues and not actually reading what the cover before you bought!

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Perhaps they should break the two into separate funds. The townhomes basically have their own HOA and they have to manage the financing themselves, and the detached homes have their own HOA. For the shared stuff, divide the costs between the HOAs by the number of dwellings in each. I would say it sounds like a horrible situation because of the townhome maintenance issues.

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Dus10 said:   Perhaps they should break the two into separate funds. The townhomes basically have their own HOA and they have to manage the financing themselves, and the detached homes have their own HOA. For the shared stuff, divide the costs between the HOAs by the number of dwellings in each. I would say it sounds like a horrible situation because of the townhome maintenance issues.
  If the CC&R's currently state that the money is pooled, making the change and unwinding that is going to cost a ton of money in legal fees and also require a vote. Dues could go up even more  

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Sounds like the single detached owners are being deadbeats if the townhome owners are paying in their mortgage.
Your HOA needs to step up on those people. Townhome owners are probably pretty pissed that people aren't paying their HOA dues.

rated:
Get yourself on the board.

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The CC&R's may not allow for a large increase like that. I don't really see it worth fighting this if the money is needed to maintain the common areas. It doesn't make sense to sell your home because your HOA went up $225 a year. The new owners will have the same problem and price in any problems with the HOA.

Finding out the root cause of the delinquency and what is being done about it is the first step. It could be an administrative issue with not sending bills or collecting information, it could be a financial issue where the money is being misused, or it could be an issue with the people who live there not being able to afford it any more. Is the HOA not sending out overdue bills or reminders? Is the HOA not charging a late fee, or waiving it? Are many homes being foreclosed on, or are many of the homeowners elderly and not able to afford living there any more? Is the HOA charging legal fees to the overdue accounts, and if not can this be addressed at the next board meeting? Has the HOA started putting liens on overdue properties for the past HOA dues plus the legal costs? Why do you feel that the money is not being well spent after attending the meeting?

rated:
You need to hire a better law firm that can go after those deadbeats or foreclose on their property and get those dues flowing again. Not sure if your state has a condo super lien law that allows them to jump ahead of the mortgage. What typically happens in our state is that once the lien is recorded, the mortgage company typically pays it off and then increases the payment for the owner because they don't want their interest foreclosed on. If you don't have that, not sure what else they can do.

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plhoward said:   We also pay $15,000 in legal but rarely recover money from delinquent homeowners and if we do collect money it's nothing more than the hoa fee itself.
 

 This may be impacted by state law, but our HOA tacks the late and legal fees on to the collection. Also, we don't actively pursue the debtors, just add a lien which we know will be paid eventually.I doubt there's much you can do as an individual owner, the board has to work with their attorneys to figure out the best way to handle such delinquencies.

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plhoward said:   
With that being said I don't want my home forclosued due to not paying hoa fee in full. But I don't want to continue to pay more due to other ppl not paying either. So should I try to sell or just find another home and let this house go?
 

  Fixed it for you.

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stanolshefski said:   Get yourself on the board.
  This is the answer.  I had concerns about how our HOA funds were being spent in my last house, so I got myself elected and took care of the issue.  I was easily re-elected and continued to ensure we got the best bang for our bucks.  During my time on the board we changed lawyers and management companies, took a more aggressive stance on collecting from the deadbeats (and collected those past due fees and costs), plus upgraded common elements and lowered dues.  I left the board when I moved out of the neighborhood.It usually only takes one person with a level head and willing to be aggressive in getting things done and the rest of the board will follow along.  When you end up with the same old group who does it because no one else wants to, they usually just go through the motions and let the HOA run itself (which means the lawyers and the management company basically make a bunch of money off the homeowners).

rated:
I have only two options for a HOA: Run, run away from that HOA, or make sure you have a say in your HOA. That means get out or get on the board. It's best to sit on the board for a year or so before running for an officer so you know how things are done, or should be done.

HOA's aren't magic either, and there are a ton of laws that must be followed. Check the financial statements, find out where the money is going and where it is (not) coming from. If the HOA is paying for home maintenance, that sounds more like a condo than a townhouse.  

Also, be sure your management company (?) has a smart attorney looking at your collections.   You can lose another ton of cash if debts aren't handled properly or if the statue of limitations floats along before the process is started.

 By the way, who cares what your seller told you?   What did the documents you received from the association when you purchased your home tell you???  Better check them right now, if you didn't bother then. 

rated:
Your HOA does went up ~$20/month and you think letting the house go into foreclosure is a good solution to this?

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If your HOA fees rise because some people don't pay HOA fees but don't get foreclosed etc, why are the rest of you paying the fees?

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Ecuadorgr said:   If your HOA fees rise because some people don't pay HOA fees but don't get foreclosed etc, why are the rest of you paying the fees?
  Foreclose how? The HOA doesn't hold the mortgage.

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atikovi said:   
Ecuadorgr said:   If your HOA fees rise because some people don't pay HOA fees but don't get foreclosed etc, why are the rest of you paying the fees?
  Foreclose how? The HOA doesn't hold the mortgage.

They are foreclosing on the lien. Very common, as allowed by state law.   From Nolo:"Foreclosure of HOA LiensIf an HOA has a lien on a homeowner’s property, it may foreclose on that lien (even if there is a mortgage on the property) as permitted by the CC&Rs and state law. The HOA can foreclose either through judicial foreclosure or a nonjudicial trustee’s sale, depending on state law and the terms in the CC&Rs.To judicially foreclose an assessment lien, the HOA must file a lawsuit against the homeowner and obtain a judgment from the court granting permission to sell the home to satisfy the HOA’s lien. To nonjudicially foreclose, the lender does not have to go through state court, but rather follows specific procedures as dictated by state law, as well as the CC&Rs."

rated:
I was a trustee at a condo where I used to live. We instituted progressive penalties for missed payments and high interest rates for outstanding balances. That brought almost all of the late payers in line quickly. And, it had the benefit of adding an incentive for the deadbeat owners to sell their unit, so that the fees didn't keep accruing. Even for balances that remained outstanding, we recovered everything we were owed when the units were sold.

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henry33 said:   You need to hire a better law firm that can go after those deadbeats or foreclose on their property and get those dues flowing again. Not sure if your state has a condo super lien law that allows them to jump ahead of the mortgage. What typically happens in our state is that once the lien is recorded, the mortgage company typically pays it off and then increases the payment for the owner because they don't want their interest foreclosed on. If you don't have that, not sure what else they can do.

This. I've got the impression that the management company will almost always use their default buddy law firm. Sounds like they aren't being effective. If asked, the management company should be able to go out and find you new counsel, just like they can for a landscaper. If no one acts, join the board.

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stanolshefski said:   Get yourself on the board.
  The Boards are a joke. They send out letters saying you are in violation of XYZ, yet it is ok for board members to do the same thing.

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scottvm said:   stanolshefski said:   Get yourself on the board.
  The Boards are a joke. They send out letters saying you are in violation of XYZ, yet it is ok for board members to do the same thing.

For OP, it's much more important to get control and give direction to the budget.

rated:
tennis8363 said:   
atikovi said:   
Ecuadorgr said:   If your HOA fees rise because some people don't pay HOA fees but don't get foreclosed etc, why are the rest of you paying the fees?
  Foreclose how? The HOA doesn't hold the mortgage.

They are foreclosing on the lien. Very common, as allowed by state law.   From Nolo:"Foreclosure of HOA LiensIf an HOA has a lien on a homeowner’s property, it may foreclose on that lien (even if there is a mortgage on the property) as permitted by the CC&Rs and state law. The HOA can foreclose either through judicial foreclosure or a nonjudicial trustee’s sale, depending on state law and the terms in the CC&Rs.To judicially foreclose an assessment lien, the HOA must file a lawsuit against the homeowner and obtain a judgment from the court granting permission to sell the home to satisfy the HOA’s lien. To nonjudicially foreclose, the lender does not have to go through state court, but rather follows specific procedures as dictated by state law, as well as the CC&Rs."

  I'm in FL and we do this all the time.  We now have almost 100% of the homes up to date on their dues.

rated:
stanolshefski said:   Get yourself on the board.
  I totally second this. Am on the board of a HOA myself and we are doing everything we can in our community to keep the costs down and be fair to everyone. This is a 100% thankless, voluntary work. I hear people complain all the time but no one steps up let alone to be part of the board but even to attend regular association meetings.

rated:
plhoward said:   
With that being said I don't want my home forclosued due to not paying hoa fee in full. But I can't afford to continue to pay more due to other ppl not paying either. So should I try to sell or just find another home and let this house go?
 

  
You can afford another $300-ish a year or you shouldn't own a home anyway.
As HOAs are present in MOST of the new communities, dont assume that you can "buy" your way out.  Nor should you assume that a new HOA is better.

Your HOA is paying someone to manage it.  That's illustrated by the 33k in management and admin fees.   You've got another 15k in legal.  I was in an HOA JUST LIKE THIS.  With almost no common property.... Most of the money was being spent to kick around deliquent home owners who would just go let their homes go (at the time) anyway and we'd never collect.   A $300 debt became $2500 with legal fees in the first year.

Your board needs to make major changes.  Stop auto-enforcing against people that delinquent.  I'm not saying "don't enforce" - I'm saying that however they are doing it is expensive and ineffective.  So don't do that. What worked in our case was:
1) Stop allowing the attorney to send form letters at $250/pop
2) Actually go by and have a conversation with the home owner.  Yes, you, as a board member, take that risk and communicate.  Offer 3 options:   A payment plan, "pay now", or remind the homeowner that you've got an obligation to lien.  
3) Stop foreclosing. IMHO this is unethical to "take" a home over a $375 debt. After the attorney fees and paying the primary mortgage, we realized that foreclosing only cost more money than the debt itself.  Instead, file a lien and forget about it.  Renew it as necessary.  Eventually, it'll get paid..

Part of the problem here is that no one wants to do any work, let alone the "hard" work for actually talking to the people that the board represents.  This has to change, or you're going to continue to squander your community fees on stuff that doesn't benefit the community..

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