Rising HOA Fees

December 1, 2008 | By Kelley Koehler | Filed Under First Time Buyer, Home Buying

I was showing a few luxury condos here in Tucson the other day and got into an HOA fee discussion. After doing a little research, we discovered condo community where the fees have more than doubled over the past 3 years, from the low $100s to the high $300s. Which isn’t an insignificant increase over such a short duration on very new units.

There are many HOAs that are trying to raise fees right now. Those in foreclosure or otherwise tight budgets often let the HOA dues slide first. When you buy a home with a homeowner’s association, you’re usually supposed to receive copies of the most recent financial report and reserve studies and copies of the operating budget. Typically, you’ll get these on a disk in the mail, and you really need to check those things out. I don’t get copies, only you. So make sure you’re looking into the financial stability and dues history of homes in an HOA.

Comments

4 Responses to “Rising HOA Fees”

Chris Griffith on December 7th, 2008 10:53 am

I’m walking with dinosaurs, here. I’m trying to get HOA and title companies to put their data on disc instead of me mailing condo docs as thick as the Miami phone book. They think I’m from Mars or something.
Kelley Koehler on December 7th, 2008 11:00 am

Chris – most of our HOAs send their info out on disks, but there’s a few yet that like to kill a ream of paper or two…
Erika Eaton on April 21st, 2009 5:31 pm

I don’t know if the HOA was recently turned over by the developer. A lot of times the developer will artificially subsidize the HOA fees making them artificially low. As you said, look at the financials, is there any reserve fund?

A lot of other HOAs play games with the reserve fund. Some don’t even maintain one dime in the fund, but the roof will eventually need to be replaced. They’ll assess for all capital projects, keeping the HOA fees low, which I believe is dishonest.

Keep in mind with so many folks behind on the mortgages, especially condos, the HOA fees get neglected. The HOA has the authority to place a lien on the condo, but the lien will get wiped out after the foreclosure – leaving the remaining condo owners stuck with a larger slice of the pie.

If you’re ever in Atlanta, check out my Atlanta homes website.
Joe 535 on February 2nd, 2010 8:41 am

HOA finances even with a financial report may not clearly show how fit it is to maintain a facility, for the HOA has the option to provide gross financial numbers, which may be generally accurate, they provide no specificity on spending in some areas, only general amounts to certain categories, such as furniture, petty cash (can be a few thousand including cell phone use, gas mileage, etc. More importantly, key infrastructure costs and maintenance may be delayed and not fixed in a timely manner necessitating increases of HOA fees. All in all it is a classic buyer beware situation which may hamper sales, for HOA fees which may be controllable, the fact is control is minimal. Unless the economy turns around condo sales may be severely effected by high HOA fees.

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