I have concerns

Hi,

I own in a Homeowner Association Community. I am a Realtor since 2000 and I am also on the HOA Board of Directors and sit in the Treasurer role. Our homeowners' association is self-run. We do not have a paid management company.

The biggest problem I see is that people buy in homeowner association communities thinking that everything is going to be done for them and that the association is some third-party entity.

I have experienced this in our community where a person told our president that he thinks the association is just trying to screw over the little man. The president educated him on who the association is.

The association is the homeowners. The board is made up of volunteer homeowners. Our goal is to keep the property and amenities in good repair so that we can maintain the value of our property and live in a nice place.

This year our homeowners insurance doubled in price. It went from $111,000 to $232,000. That took an extra $121,000 out of our reserves. At the time of our renewal in March, we were told if we replaced our Federal Pacific electric panels that we could get our insurance back down to where we estimated in our budget ($130,000) because we would now be open to so many more insurance companies that previously wouldn't give us a quote.

We had a meeting of the homeowners and we all agreed that we would replace our panels. After doing that the price reduction was not immediately forthcoming. Fast forward to October when we were creating our budget for 2024 and the insurance agent tells us our insurance will likely be in the $450,000 range in 2024. We had to go to the homeowners and explain that if we had to pay that $450,000 in March we would likely go bankrupt as it would leave us with no money in reserves or checking and no money for anything else. To cover this drastic increase we would need to double our dues from $314 to $600 per month.

People in the community made ridiculous statements like where did all our money go. The board is lining their pockets. They wanted to see the last three years of budgets (which budget vs actual is published every month for them to see) so they could determine where things went wrong. I could go on. But suffice it to say, the homeowners are not engaged, not paying attention, and even when we explained it to them, they still said they weren't going to vote for the increase.

After that meeting numerous homeowners gave us insurance agent contacts and we reached out to all of them to no avail. But our longstanding insurance agent, when he realized we were shopping for insurance, came back with a lower quote as long as we renew before the price increases that will happen on January 1. Our new policy will be $205,000 (not $130,000 as previously stated) and we would need to raise the dues to $398 per month. For many this was palatable compared to the $600 per month we were potentially facing. But there were still many people who voted against the increase.

Fortunately, the majority voted yes and we will be solvent for another year. But our community was built in 1969 and many things need to be repaired. Like our streets which need to be paved at a cost of $550,000. Our sprinkler system broke this year and needed to be replaced throughout at a cost of $28,000 which was not in the budget. And in just the last 3 months we had 3 water line pipe breaks at a cost of $10,000 each. We had $5,000 in the budget. Our 2024 budget allows for $40,000 to go into reserves. In the last 3 years zero has gone into reserves and if we have as many water line breaks as we've had this year, I expect zero will go in again.

My point here is that when people move into a homeowners association they have to realize that they are agreeing to be a member of the community and to work together with the other homeowners to keep it in good repair. This means paying their dues, and understanding that as things break it is the homeowners who have to pay for the repairs. The association is the homeowners. When one person doesn't pay their dues (which in our case it is more like 10%) that hurts us financially. We don't want to send people to collections. We want to be understanding of the situations people are in. But some people just don't ever get out of their bad situation and expect the others living in the community to just carry the weight. That is not fair to those who pay.

On a separate note, I see that someone wants the board to go through training. We can barely get people to sit on the board let alone go for training. We just had to change our board requirements from 9 people to 7 because we can't get anyone to run for the board. If we tell people they have to go through training I expect we will get even less.

I do think a disclosure to buyers about buying in a HOA Community would be valuable if done right. We had two homeowners who bought and never paid an HOA fee in 2 years because they thought it was included in their mortgage. They are now on payment plans.

If you have questions on anything I wrote, please feel free to reach out.

Sincerely,

Donna Campanelli
719-330-8531