6 ms·

a major point people dont consider is the HOA. Speaking from experience of a friend who was a plumber for one of these condo complexes: In a condo, if an HOA

a major point people dont consider is the HOA. Speaking from experience of a friend who was a plumber for one of these condo complexes: In a condo, if an HOA is required to fix plumbing or landscaping, paint, or roofing, then it comes out of the CAM fees paid by the residents. However, if the HOA does NOT pay for that work, or tries to stiff the construction firm they hire, the construction company can take out a lien on the property until their bill is paid. That lien means you cannot sell your condo until the HOA pays their debt. In my friends case, the HOA had blown all their CAM money on lavish vacations and dinners for key members of the HOA board. They had no money to pay for a sewage repair job, and left 54 members of the housing compex stuck with a $20,000USD repair bill. After a grisly court battle the HOA was disbanded, CAM fees were agreed to be paid directly to the plumbing company for the year, and the complex went into foreclosure after the debt had been paid as most tenants had sold.

webdood90 8y ago
54 people couldn't cough up $20k?
- WorldMaker 8y ago
  54 people couldn't pay the bare modicum of attention to their HOA's budget to stop them from spending on meals and vacations that have nothing to do with the HOA's role?
  - magduf 8y ago
    I've lived in HOA neighborhoods before; the power any individual resident has over the HOA is nearly nil. You'd basically have to run around to all the neighbors and convince them to vote for someone else at the next board election; it's just like regular government politics that way.
    - lazyasciiart 8y ago
      Yes, that's a pretty bare modicum of effort.
      - magduf 8y ago
        Convincing your neighbors to vote a certain way is "a pretty bare modicum of effort"? If that were true, we wouldn't have our current democracy in such a terrible state. Billions of dollars are spent on every election to try to convince voters of how to vote, and look where it gets us. How do you think one person running around to his neighbors is going to convince them to vote for genuinely good HOA board members? Remember that the bad members are also going to be running around trying to get votes. And who would you have them vote for anyway? Yourself? I don't know about you, but I have no time or inclination for such a job. Frequently, HOAs turn out this way because the people who do have time for that crap are the people who really are a problem. This is a strong argument in favor of professional property management in fact (which is what my condo has, and doesn't seem to have any of these problems).
        WorldMaker 8y ago
        The "bare modicum of effort" in that case as the average person would be at least paying attention to the folks running around trying to get votes, and paying attention to what they are telling you. Billions of dollars are spent trying to convince voters to vote, because the only real winner in most general elections, whether HOA or national, is "apathy" as most votes are undecided or not even cast. Also, things like meeting minutes and annual budgets are generally required to be transparent in most HOA founding documents (constitutions, articles of incorporation, bylaws). You don't have to want to be a board member to review meeting notes (or directly attend meetings in most cases), and especially to review an annual budget of how your money is spent. 54 different people in the example above had an opportunity to review the budget? Did they just not care? Was it "creative accounting" fraud? (If so, why weren't the people responsible personally liable for fraud? White collar crimes are still crimes.) My HOA maintenance fees include major utilities so we all assume year-to-year increases, but just about everyone in my building still seems to take a fine tooth comb to the annual budget every year in the hopes of avoiding an increase or finding a possible decrease. (Also, property managers are generally orthogonal concerns to HOAs given they have different goals and most property managers still report to an HOA. You can still have good property company reporting to a bad HOA. There are also plenty of horror stories of bad property management companies out there. My HOA has already been through a small handful of property management companies trying to find a good one. We seem to have lucked out with the current one, at least, given all that we are going through.)
- gowld 8y ago
  $20K each, most likely.
  - jiveturkey 8y ago
    1 million dollar sewer repair bill? unlikely.
- magduf 8y ago
  Another "tragedy of the commons" thing. It's only about $370 per person (or unit), but they're probably not all trying to sell at the same time, so you probably can't get them to all agree to it. So there's probably 5 people trying to sell at the moment and the rest refuse to pay up just to help those 5 sell, and they probably think that this might come up again in the future thanks to even more mismanagement.
- castlecrasher2 8y ago
  I had a friend go through a roof replacement in his condo complex that cost $13k for each condo owner. I know nothing about plumbing but maybe it was per owner?
kitcar 8y ago
The laws regarding exactly what plays out when an HOA(condo board) doesn't pay its bills likely changes drastically by jurisdiction, but higher level you are highlighting an important point - "The Tragedy of the Commons" is a very significant issue with condos, only takes a few bad actors to make things really bad for everyone. https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons
msla 8y ago
Are condo HOAs typically run by insane petty dictators who will demand absolute perfection in lawns, house trim, and the shapes your car leaves in your driveway? https://www.idahostatesman.com/news/nation-world/national/article226947154.html https://www.idahostatesman.com/news/nation-world/national/ar...
- ohaideredevs 8y ago
  In our case, it's a bunch of senior citizens who stand outside and stare down anyone who walks in and immediately call the police if someone parks in a reserved spot. I am genuinely amazed at how petty they are. They also upgraded the part of the complex they live in for 3 years in a row and keep postponing the other areas. They write hilarious monthly updates cheering how much damage their new tall speed bumps have done to cars. I would be pretty pissed if I actually owned one of the condos, but as it stands, its pretty funny.
criddell 8y ago
You're talking about the HOA as if they are a third party. Isn't the HOA just the group of condo owners? Who were the two parties in the grisly court battle?
- dragonwriter 8y ago
  > You're talking about the HOA as if they are a third party. Isn't the HOA just the group of condo owners? No, in the same way that a corporation is not just the group of stockholders; it's a distinct legal entity operationally controlled by it's own management (either employees or a contracted management firm), who is accountable to a board, who is normally accountable by election to the condo owners. Owners, or groups of owners, suing HOAs are just like shareholders suing corporations, it's not an uncommon thing. Also, lots of HOAs are actually structured to be effectively controlled by the original developer until certain time and/or unit sales triggers move them out of a privileged role, and may have rules set in place during that time that place high procedural bars on changes that would provide effective control to the actual homeowners even if the homeowners have nominal control. HOAs are a hotbed of principal-agent problems.
  - alistairSH 8y ago
    While all that is true, as an HOA member and major stakeholder in the HOA, it's incumbent on the members/owners to actually read the quarterly financial updates, attend HOA meetings, vote, etc. Certainly easier to do in a neighborhood-run HOA for a small building or TH cluster than a high-rise, but the point still stands, I think.
notJim 8y ago
It's also just the cost. A condo is appealing to me because they're cheaper and I don't need a big place, but when you add in the HOA fees (SFH don't have HOAs around here), they start to look pretty close in price.
danans 8y ago
HOAs are not restricted to condos. Many newer SFHs are governed by neighborhood HOAs also, and they are famous for putting onerous restrictions on residents. Also, not all condo HOAs are a mess like you describe. I'm part of a 3 unit HOA on subdivided infill lot. It's dense, but no shared walls or structures. The low HOA fee covers the shared insurance policy and nothing more. Within my exclusive use area I'm free to do anything reasonable with landscaping, etc. Only structural changes to my unit require HOA approval The dysfunction of some HOAs is more a function of the misplaced priorities of the members, as in the example you gave, not with the idea of shared ownership itself.

webdood90 8y ago

54 people couldn't cough up $20k?

WorldMaker 8y ago
54 people couldn't pay the bare modicum of attention to their HOA's budget to stop them from spending on meals and vacations that have nothing to do with the HOA's role?
- magduf 8y ago
  I've lived in HOA neighborhoods before; the power any individual resident has over the HOA is nearly nil. You'd basically have to run around to all the neighbors and convince them to vote for someone else at the next board election; it's just like regular government politics that way.
  - lazyasciiart 8y ago
    Yes, that's a pretty bare modicum of effort.
    - magduf 8y ago
      Convincing your neighbors to vote a certain way is "a pretty bare modicum of effort"? If that were true, we wouldn't have our current democracy in such a terrible state. Billions of dollars are spent on every election to try to convince voters of how to vote, and look where it gets us. How do you think one person running around to his neighbors is going to convince them to vote for genuinely good HOA board members? Remember that the bad members are also going to be running around trying to get votes. And who would you have them vote for anyway? Yourself? I don't know about you, but I have no time or inclination for such a job. Frequently, HOAs turn out this way because the people who do have time for that crap are the people who really are a problem. This is a strong argument in favor of professional property management in fact (which is what my condo has, and doesn't seem to have any of these problems).
      - WorldMaker 8y ago
        The "bare modicum of effort" in that case as the average person would be at least paying attention to the folks running around trying to get votes, and paying attention to what they are telling you. Billions of dollars are spent trying to convince voters to vote, because the only real winner in most general elections, whether HOA or national, is "apathy" as most votes are undecided or not even cast. Also, things like meeting minutes and annual budgets are generally required to be transparent in most HOA founding documents (constitutions, articles of incorporation, bylaws). You don't have to want to be a board member to review meeting notes (or directly attend meetings in most cases), and especially to review an annual budget of how your money is spent. 54 different people in the example above had an opportunity to review the budget? Did they just not care? Was it "creative accounting" fraud? (If so, why weren't the people responsible personally liable for fraud? White collar crimes are still crimes.) My HOA maintenance fees include major utilities so we all assume year-to-year increases, but just about everyone in my building still seems to take a fine tooth comb to the annual budget every year in the hopes of avoiding an increase or finding a possible decrease. (Also, property managers are generally orthogonal concerns to HOAs given they have different goals and most property managers still report to an HOA. You can still have good property company reporting to a bad HOA. There are also plenty of horror stories of bad property management companies out there. My HOA has already been through a small handful of property management companies trying to find a good one. We seem to have lucked out with the current one, at least, given all that we are going through.)
gowld 8y ago
$20K each, most likely.
- jiveturkey 8y ago
  1 million dollar sewer repair bill? unlikely.
magduf 8y ago
Another "tragedy of the commons" thing. It's only about $370 per person (or unit), but they're probably not all trying to sell at the same time, so you probably can't get them to all agree to it. So there's probably 5 people trying to sell at the moment and the rest refuse to pay up just to help those 5 sell, and they probably think that this might come up again in the future thanks to even more mismanagement.
castlecrasher2 8y ago
I had a friend go through a roof replacement in his condo complex that cost $13k for each condo owner. I know nothing about plumbing but maybe it was per owner?

kitcar 8y ago

The laws regarding exactly what plays out when an HOA(condo board) doesn't pay its bills likely changes drastically by jurisdiction, but higher level you are highlighting an important point - "The Tragedy of the Commons" is a very significant issue with condos, only takes a few bad actors to make things really bad for everyone. https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons

msla 8y ago

Are condo HOAs typically run by insane petty dictators who will demand absolute perfection in lawns, house trim, and the shapes your car leaves in your driveway? https://www.idahostatesman.com/news/nation-world/national/article226947154.html https://www.idahostatesman.com/news/nation-world/national/ar...

ohaideredevs 8y ago
In our case, it's a bunch of senior citizens who stand outside and stare down anyone who walks in and immediately call the police if someone parks in a reserved spot. I am genuinely amazed at how petty they are. They also upgraded the part of the complex they live in for 3 years in a row and keep postponing the other areas. They write hilarious monthly updates cheering how much damage their new tall speed bumps have done to cars. I would be pretty pissed if I actually owned one of the condos, but as it stands, its pretty funny.

criddell 8y ago

You're talking about the HOA as if they are a third party. Isn't the HOA just the group of condo owners? Who were the two parties in the grisly court battle?

dragonwriter 8y ago
> You're talking about the HOA as if they are a third party. Isn't the HOA just the group of condo owners? No, in the same way that a corporation is not just the group of stockholders; it's a distinct legal entity operationally controlled by it's own management (either employees or a contracted management firm), who is accountable to a board, who is normally accountable by election to the condo owners. Owners, or groups of owners, suing HOAs are just like shareholders suing corporations, it's not an uncommon thing. Also, lots of HOAs are actually structured to be effectively controlled by the original developer until certain time and/or unit sales triggers move them out of a privileged role, and may have rules set in place during that time that place high procedural bars on changes that would provide effective control to the actual homeowners even if the homeowners have nominal control. HOAs are a hotbed of principal-agent problems.
- alistairSH 8y ago
  While all that is true, as an HOA member and major stakeholder in the HOA, it's incumbent on the members/owners to actually read the quarterly financial updates, attend HOA meetings, vote, etc. Certainly easier to do in a neighborhood-run HOA for a small building or TH cluster than a high-rise, but the point still stands, I think.

notJim 8y ago

It's also just the cost. A condo is appealing to me because they're cheaper and I don't need a big place, but when you add in the HOA fees (SFH don't have HOAs around here), they start to look pretty close in price.

danans 8y ago

HOAs are not restricted to condos. Many newer SFHs are governed by neighborhood HOAs also, and they are famous for putting onerous restrictions on residents. Also, not all condo HOAs are a mess like you describe. I'm part of a 3 unit HOA on subdivided infill lot. It's dense, but no shared walls or structures. The low HOA fee covers the shared insurance policy and nothing more. Within my exclusive use area I'm free to do anything reasonable with landscaping, etc. Only structural changes to my unit require HOA approval The dysfunction of some HOAs is more a function of the misplaced priorities of the members, as in the example you gave, not with the idea of shared ownership itself.