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Buyer Beware! HOA Fees with "coming soon" amenities??

With the rate of foreclosures and short sales being so high in our current market, I am continuously hearing about communities with HOA fees and the ways that they are working around all of the vacant homes in their neighborhood.  For starters, a lot of the newer communities that haven't been fully completed are charging their homeowners for amenities that are "coming soon", but in this economy, and with so many empty homes in the community, it is a safe bet that homeowners could be waiting a long time for said amenities.  I know specifically of two subdivisions in Sarasota that started development in 2006; one is supposed to have a community pool and the other is supposed to have community tennis courts.  Both communities are charging HOA fees to their homeowners as if these things were already in place, but homeowners are paying for something they may never see.

Another thing to think about when buying a home in a community with HOA fees is whether or not there are enough residents to cover the costs of the community's upkeep.  HOA fees are designed so that all the homeowners living in the community share the cost of extras such as street lights, street and sidewalk maintenance, a clubhouse and any entertainment amenities such as a community pool.  When HOA fees are initially decided upon, the developer estimates how many homeowners there will be, thus creating a fee that homeowners can live with.  What is happening now, since there are so many vacant homes, is that communities do not have the funding to continue their maintenance so they are either draining the saved money for highly important things like roof repairs or charging the remaining homeowners much higher HOA fees to cover for the loss.

When a community's roofing funds are low, there is no way for the community to provide new roofs, nor repair leaks as they occur.  This is a severe problem.  There are condo units in Sarasota with such bad roof problems that the subsequent leaks have causes the interior of the vacant condo units to become infested with mold and mildew...another awful thing that home buyers should be aware of.

When the only way to fix these problems is for more homes to be occupied, one must wonder how long things like this could take.  The scariest part for many homeowners is the fact that, any day, their HOA fees could skyrocket by 10%, 25% or even higher to cover the cost of the homes that have been foreclosed on or that are undergoing a short sale.

Here are some things you can do to make sure that this doesn't happen to you:

1.  Get exact figures on how much money is currently in the roof reserves.

2.  Figure out what the ratio is of empty to occupied homes in the community.   If it is mostly occupied, you are much better off.  If there are several vacant homes springing up already, be on the lookout.  If the community has more "for sale" signs than any other, beware!

3.  Don't agree to pay HOA fees for invisible amenities, especially if the above precautions have alerted you to a community that is hurting for funding already.  That community pool they promised you may be another 10 years in the making or, it may never get there at all!

 

For more information, feel free to contact Roxanne and Shannon Moore at RE/MAX Anchor Realty!  941-276-8142

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Comment balloon 0 commentsShannon Moore • January 20 2009 07:07AM

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