May 19, 2008
HOAs in need of bread
Where I grew up in Ellicott City, the Homeowners Association was King. Most decisions about changes to our neighborhood had to be cleared by the all-powerful HOA.
But their power might be draining (if we equate power with money, anyway).
Many HOAs’ access to cash just isn’t what it used to be. Forget pool upkeep or road repaving projects – some HOAs are scraping to meet the essential services such as trash removal. They’ve fallen victim, like so many others, to the foreclosure crisis. Homeowners are paying dues late or not at all.
The WSJ explains:
A growing number of homeowner and condominium associations across the country are raising their fees or putting the brakes on clubhouse improvements, new landscaping and other shared neighborhood amenities. The kitty is so low for some that essential services, such as building maintenance, electricity, trash removal and repairs have been cut.
As community residents lose their homes to foreclosure and new home building has slowed considerably, many of the roughly 300,000 neighborhood associations in the U.S. are grappling with shrunken budgets.
And, as one sage commenter at Poynter.org points out, some condo associations are dealing with an abundance of empty units – which means there are fewer homeowners to share the costs of vital projects.
JACKIE SAUTER, Web Editor
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For a number of years, I was a communications consultant to over a dozen HOAs. I watched, studied and thought often about the value and purpose of such organizations. Again and again, I saw the same mistake: Homeowner managers who were more interested in keeping the monthly fees low, dealing with petty issues and rarely being willing to deal with long-term strategic issues facing their community.
I remember once (in the early ’90s) an association claiming with pride that it had kept their dues at the same rate for the fourth year running. When really, a dollar or two a month increase, times 600 units, over four years, would have been a significant contribution to their coffers.
I don’t understand the point of your article. It’s as though you’re attempting to blame a long-term management issue on the current economy. Hrrmph. Even if a unit is empty, the HOA dues are still due. If an association is having a hard time collecting, maybe it’s time for them to hire a management company that is set up to tend to such details. Even if an HOA property is in foreclosure, those dues are still due. Can’t they be transformed into a lien against the property?
Plus, big projects shouldn’t be paid for with this year’s HOA fees. Such things are supposed to be identified, planned for and executed when the funds are available.
Perhaps a more informative article would be about the need for HOAs to plan, hire good management firms and deal with long-term upkeep concerns.
If he assessments are not paid the condo can put a lien on te property and sell it our from under the bank, if the bank elects not to pay.
I would never live in a community with an HOA.
The first poster has a point – the owner of the property should be obligated to pay the HOA dues regardless of whether the property is occupied or not. The problem does not appear to be with foreclosures, rather the HOA’s failure to enforce the requirement to pay the dues.