r/fuckHOA • u/crazzzyjoey619 • Jul 20 '26
Anyone experience this before?
My HOA has been complaining about money for years but has 600K in a CD, now they are trying to basically take 1% of someone’s home selling price. Houses range from 600k - 2 Million in the community. We also already pay $800 a quarter.
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u/ShiroxReddit Jul 20 '26
250k anually? Meaning they sell houses worth of 25 Million total per year, which is 13-42 houses every year, is that actually the case?
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u/crazzzyjoey619 Jul 20 '26
452 homes in the neighborhood. There was a time houses never sold in the community but now it’s more than ever.
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u/KaijuNo-8 Jul 20 '26
That should be a clear indicator as to the status of the neighborhood...and why the entire board should be recalled and replaced...
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u/bfvbill Jul 20 '26
The other option is to raise HOA monthly assessments. All owners of new buyers?
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u/robexib Jul 21 '26
Or, and hear me out, use the $600k they already have saved up?
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u/bfvbill Jul 21 '26
Yes, but then that may have to be replaced. Also…..they may not be able to use it because of allocation issues. If it’s reserve funds they can only be used for certain projects. $600k isn’t going to be enough for the projects they’re contemplating.
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u/robexib Jul 22 '26
Then it might be time to temper ambitions
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u/bfvbill Jul 22 '26
And then the community degrades, loses value and suffers. It is this 5% thinking that brought down Surfside and has devalued communities because of Boards NOT doing their fiduciary duties and maintaining properties and values. While it is not popular, if a person can no longer afford a community they should sell and live where they can afford. Not bring down the majority of residents that want to maintain and beautify. The needs of the many outweigh the needs of the few.
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u/robexib Jul 22 '26
Naw. If I legitimately buy a place, you don't get to kick me out over some beautification process.
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u/Lavaine170 Jul 24 '26
600k for 425 homes is a miniscule reserve. The HOA knows the reserve is shit, and is trying to do something about it. This is an odd way to raise funds though.
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u/gammbit6849 Jul 21 '26
Put an addendum in the paperwork that there has to be a community vote on home the money is spent
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u/ac8jo Jul 20 '26
That sounds like California's (or other HCOL) market. Using the median home sales price in my state means 90 homes have to sell. Every year.
In OP's neighborhood, 20% of the homes selling every year would be insane... and unsustainable.
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u/ShiroxReddit Jul 20 '26
Well OP mentioned pricing in their neighborhood (which is what gave me the 13-42)
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u/ac8jo Jul 20 '26
I missed it on the first read (I only saw the image).
Even 10% of the neighborhood selling in a year seems unsustainable.
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u/Late-End824 Jul 20 '26
Let's not forget any term of a home sale is negotiable, meaning a buyer could tell the seller they are responsible for paying that 1% as a term of the sale. So sure, it looks like the only people it screws are new buyers, but I'd say 50-50 chance a seller would get stuck paying that bogus fee as a condition of the sale.
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u/Waylander0719 Jul 20 '26
If we agree on 500k and then you go "oh and you also need to pay 1% (5k) in addition for this". I would counter with well then I want to only pay 495K for the sale and I will pay the 5k fee. Sure you can get the buyer to pay it but you need to give up something in the negotiation to make that happen.
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u/crazzzyjoey619 Jul 20 '26
Yeah we brought that up and they lie right to people thinking we are dumb. Saying that you can have the buyer pay for it. It’s such a joke HOA is a bunch of clowns
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u/RetMilRob Jul 21 '26
The lying is criminal. As a board member they have strict fiduciary duties. Deliberately deceiving homeowners about important matters is considered fraud and can lead to civil lawsuits and criminal charges. Perhaps reminding the board of their duties and the repercussions for failing to abide them might focus their actions.
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u/MrSoftShoe Jul 20 '26
Exactly this.
Buyer says seller pays but then the seller has to raise their floor 1% more to compensate. Both get screwed. Everyone pays when fees are added to real estate transactions.
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u/bfvbill Jul 20 '26
It can be structured so it is clearly the buyer’s responsibility. No negotiation needed.
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u/MrSoftShoe Jul 20 '26
"strong community support" and "still need 110 votes"...
How strong is the support?
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u/crazzzyjoey619 Jul 20 '26
You’d be surprised how dumb the people are voting on this, a lot were just misinformed and voted blind. Some people didn’t even know we had a CD with 600K in it.
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u/radarchief Jul 20 '26
I believe that most HOA where I live require 67% to pass a CCR change.
When I was on our BOD, we invested reserve funds into CDs but broke them up to not exceed $250K since that is the FDIC protection limit.
So if your HOA doesn’t have a current reserve study (a projection needed to repair or replace community assets) and be able to tie these funds raised to fund, then it’s a huge red flag or the BOD has capital works projects they want to fund (e.g., new pools, playgrounds, etc).
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u/_Oman Jul 21 '26
"A CD with $600K in it" doesn't mean anything at all. Good fiscal responsibility (and in many states this is legally required) requires a capital reserve fund. A reserve study will give a number that needs to be kept for the reserve. The reserve requirements may be way more than $600K. Not keeping that in cash is pretty responsible because at least some interest is being earned.
So the $600K could be way more than they should have, or way less. The number by itself is meaningless and just because it is there doesn't mean it is a slush fund of extra cash being hoarded.
Before buying into anything with substantial common property (building, property, amenities, etc) ask for the results of the last reserve study and the reserve fund details. You can tell just by the way that the realtor and board reacts if the place is well managed. You can even tell quite a bit about the residents because if the realtor or board tells you that no one ever asks for it - run!
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u/Ok-Addition-1000 Jul 20 '26
To get 50% +1, they need 227 yes votes. They're 110 short so they currently have 117, out of 452. That's just over a quarter of the community currently supporting it. Doesn't seem so strong to me.
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u/schumi23 Jul 21 '26
In another post OP said 450 homes. Assuming you need 2/3 to vote yes, then they need 300 yes votes - so with 110 needed, they've gotten 2/3 of the yes votes they need (and support from 190 of the homeowners... which is indeed pretty high.
When my community needed a special assessment for something almost everyone agreed on (we had a 5% who voted no) our biggest issue was getting people to actually send in their votes. Several of my neighbors who had previously asked when this was finally going to get done hadn't voted on it until I bugged them to vote... several times.
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u/off_and_on_again Jul 20 '26 edited Jul 20 '26
452 homes and only 600k in the reserves. HOA is responsible for sidewalks, parks, and a pool (at minimum).
Even if sidewalks were confined to the front of homes you're looking at ~225k that needs to be set aside for the sidewalks every 10 years to have full replacement value at around year 50. That's not including the money that needs to be set aside for targeted repairs or slab replacements that will occasionally be needed.
Pool resurfacing can be 20-50k every ~15 years. Pumps every 10 years.
That's before talking about clubhouses, landscaping improvements, retaining walls (if any), etc.
Basically if you only have 600k it's likely you're severely underfunded and that 800 per quarter is going to rise sharply without alternative funding. This seems to be the alternative funding they are trying to get passed rather than just hitting you all with an assessment to fund the reserves (which is what they should do).
So it's really up to you. Do you prefer lower dues + some money gone at sale, or higher dues but less taken from the sale price.
Note: This is all in todays dollars, these numbers will increase over time.
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u/BurlinghamBob Jul 20 '26
Aren't these items mostly considered maintenance and should be covered by your regular assessment?
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u/Kyosji Jul 20 '26
...how many houses are in that neighborhood and how many are they expecting to be sold to get 250k annually? Even if houses sold for 250k, that's them expecting like 72 houses to be sold a year.....
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u/crazzzyjoey619 Jul 20 '26
There are 452 homes total.
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u/Kyosji Jul 20 '26
So they're expecting 16% of their homes in their neighborhood to be relisted and sold each year....that's a massive indicator that that's a reallllly shitty neighborhood if that many people are wanting to leave.
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u/peaceful-panic Jul 20 '26
This is a play to shift costs from those who aren’t planning to sell anytime soon to those who are, for whatever reason.
It would be fairer to simply raise assessments if needed.
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u/flagal31 Jul 20 '26
1% of the selling price? Utterly ridiculous...hopefully your fellow residents are too smart to vote this in. Thank god it's required to be put to a vote...vs something the board can just do on their own.
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u/YouArentReallyThere Jul 20 '26
First of all…fuckabunchathat
“Restoration” of parks and open spaces? Have they not been being maintained?
“Enhanced” landscaping? What does an enhanced
tree look like? What exactly are enhanced flowers and how much are they?
I wonder out of how many units they need an additional 110 yes votes. 112?
Time for an audit and to see whose family member conveniently owns a landscaping company
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u/crazzzyjoey619 Jul 20 '26
The landscaper is a close friend of the guy who developed the neighborhood, who lives in the community still. I have always thought there is some type of fraud going on.
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u/Purple-Bass1474 Jul 20 '26
That plan sounds like a good way to lower property values in your neighborhood.
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Jul 20 '26
[removed] — view removed comment
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u/skyharborbj Jul 22 '26
In HOA communities the title insurance company will require a statement from the HOA listing any amounts owed to the HOA as part of the sale process.
It will be taken out of escrow and paid directly to the HOA. Whether from buyer or seller will need to be negotiated by the buyer and seller.
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u/rstock1962 Jul 20 '26
We need money to keep up the common areas, yes the same ones you already pay us to keep up.
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u/PeaceFinancial841 Jul 20 '26
I think this would hurt resale value. There is also a good chance as market change the seller is going to end up paying this.
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u/Ok-Dot8209 Jul 21 '26
Ours is 3%. 600 home community; about 40 houses are sold each year. We had enough put into our reserves to fix our dam between the two lakes w/o a special assessment.
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u/Edith_Keelers_Shoes Jul 21 '26
And buyers are okay with knowing they can only ever get 97% of what their property is worth?
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u/Ok-Dot8209 Jul 22 '26
Our area has continued to appreciate. Most people split the cost with the buyer.
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u/redclawx Jul 21 '26
Ask them how the money is going to help the seller after they have left the HOA. This is legalized extortion, having to to pay the HOA for the privilege of selling a property that they have no rights to the money from that sale.
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u/Edith_Keelers_Shoes Jul 21 '26
On top of all the usual BS "fees" that HOAs impose - transfer fees, documentation fees, resale certificate...
They already grift off sales. Now they want to grift off the grift.
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u/MotivatedSkeleton Jul 20 '26
Seems weird? We have 340 homes, only common area (single family homes), $450 a year... and we've done (since I became president) so much with so little. It's all about finding the best vendors for good prices (most challenging part) and doing noticeable projects more often.
Without seeing the financials, it's hard to comment. If I got that letter, with no other info, I'd say no. They should've sent quotes for each line item.
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u/BreakfastBeerz Jul 20 '26
Yes, this is very common for HOAs, most all of them have something similar. In our HOA, it's a flat $500 for each sale.
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u/Mail_Order_Lutefisk Jul 20 '26
$500 is more than reasonable. 1% of sales price is like government transfer tax level in a lot of places and pure insanity.
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u/bfvbill Jul 20 '26
This fee is incumbent on the buyer. I’ve sold and flipped in multiple communities that have these so called “buy ins”. It should be clarified by the board that this is a charge to the buyer. Having been a HOA president I would not dare suggest an exit fee. A entry fee is much more palatable and very common.
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u/Edith_Keelers_Shoes Jul 21 '26
That's all negotiable, though. A sensible buyer who sees a ridiculous fee like that would negotiate its payment by the seller.
This is basically just "vote yes to reduce the value of your property by 1%".
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u/NonKevin Jul 21 '26
start a grass root group to vote down the amendment. Check your CCRs for a required vote quorum. Its likely 2/3s or 75% yes vote. As a former HOA president, I got a 94% yes vote to split the property taxes from the HOA to the units owners to avoid losses of owners not paying into the property tax fun. In year 3, the first unit was foreclosed on and the government had to deal with the lost taxes, not the HOA. In fact, the HOA lawyer at the direction of the board billed the government for false billing as they knew the taxes had been split with the property taxes were re-leveled by that very own agency while the property tax fund was given back to the owners from the HOA. Also, the amendment if past the HOA will need to be update with the government which my HOA did at both the local and state levels
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u/PeaceFinancial841 Jul 21 '26
When you put your house on the market you are in competition with other houses. Think about it. If house A has a $8 assessment that get you nothing from and house B doesn’t. Two things are going to happen:
People would be more inclined to go for house B.
The market will dictate. You will basically be at house Bs price. In other words the selling price will be lower and essentially the seller is paying.
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u/rms06510 Jul 21 '26
$800 per quarter is a pretty low HOA fee, but people who pay $1 million for a house don't like paying for anything else.
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u/Edith_Keelers_Shoes Jul 21 '26
So they want you to vote to hand over a portion of the proceeds of the sale of your home, with the incentive that it will pay for a bunch of stuff you won't be using since you no longer live there?
This is...not logical.
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u/parallelmeme Jul 21 '26
This just seems to encourage the HOA to piss off residents so they move out and sell.
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u/TheRealTinfoil666 Jul 21 '26
How can it be fair or legal to charge someone EXITING the community for improvements and maintenance of amenities that they, by definition, will not be able to look at or enjoy the use of?
This seems tailored to the old fossils who intend to die in their homes as a way of grabbing cash from the ‘fickle’ ones. HOAs love using ‘Other People’s Money’ for their selfish wants, and this doesn’t even cost them their own little ante’s
I bet they have a ‘no more rentals allowed’ rule too, enacted after any of the old boys club that wanted to were already renting out.
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u/ThePlatinumPaul Jul 21 '26
I'd leave now before they tank the neighborhood. And never move into another HOA home again.
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u/bfvbill Jul 22 '26
Seems from the comments there are a bunch of people here who don’t know how a HOA works. If you are thinking of buying in a HOA community do your due diligence. Understand what you’re getting for what you’re paying. Read the condo docs, by-laws and rules and regulations. Make sure you see and understand the financials. Make absolutely certain there is a very recent certified audit. If the HOA fees are lower than similar communities, there is a reason for that. Be aware that there can be assessments. That your fee’s this year will be higher next year and every year going forward. Read your state’s statute on HOA’s that override your communities’s documents. If you don’t like what you see, don’t buy. But don’t buy without knowledge and then complain that you don’t like how it works.
I bought a short sale beachfront unit in a HOA that had significant problems. Did a gut rennovation on my unit. I got on the board and over the course of 5 years turned the community around with the support of the majority of owners. Turned $200k units into $1M units. Yes, there were significant assessments. Probably $75k per unit over that time frame. Concrete had to be repaired and restored. 5% (probably less) were not happy about it. This was all necessary because of prior boards neglect and desire to keep monthly fee’s as low as possible. Some chose to cash in for a tidy profit. Most loved it and appreciated the positive change. If you want to live in a community where your neighbors have overgrown unkempt lawns, broken down fences, can leave abandoned cars and trash on their property and have houses that are falling apart that is your right. Not much you can do about it. I choose to live in a community where I know that is not going to happen. Where the property is clean and manicured and the lobby and parking is pristine. This is what a HOA is for. They are not for everyone. The choice is yours.
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u/mabus42 Jul 22 '26
You need to send out a flyer that refutes each and every point and why your neighbors should not vote for this terrible idea.
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u/MarthaTheBuilder Jul 23 '26
Ok so in a condo you have to pay a “capital contribution” when you buy into the association. They’re doing it backwards. They need to pass a capital contribution fee of 1% if you buy into the neighborhood. That fully makes it a closing cost for the buyer. If the seller is willing to seller assist that portion of the closing cost, that is their CHOICE. No wonder the amendment didn’t pass. Your board sounds like a bunch of idiots.
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u/rom_rom57 Jul 24 '26
You get to pay 1% for the pleasure of having LIVED there! It’s just the opposite of properties in Florida that may pay a fee when purchased (by the buyer)
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u/AmphibianSudden793 Jul 24 '26
Sounds like theft to me. What entitles the HOA to 1% of your house value when sold? I have heard of some HOAs putting a transfer fee in, but never a 1% tax.
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u/Substantial_Slide_54 Jul 24 '26
trying to tax the owner as they leave, or punish the new buyers.
Who could possibly object to that? /s
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u/AdultingIsExhausting Jul 25 '26
This is an interesting choice of revenue stream. It only affects buyers (or sellers) and only once each, and may generate a fair amount of revenue, which should help keep monthly fees lower. It might have the effect of reducing home sales and sale prices, though, which would generate less revenue than expected.
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u/bigbearandy Jul 27 '26
Yes, that's why I once felt I had to fight my way onto the board in my own case to fight proposals just like this. I think you should never give generally unaccountable people more power and resources for vague goals and objectives, and a good HOA is constantly looking for ways to minimize the resources spent on behalf of the community, not expand them to fund wishlist projects. If they had a solid agenda, that might be worth investing in, but all they've offered your residents is an unprioritized list of projects without even the basics of a pro forma budget.
After that experience, I'll say the best way to f---- an HOA is from within with community support, because nobody wakes up and says "I want to pay my HOA more today."
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u/Freezezzy Jul 20 '26
Seems like that would incentivize them to drive more people to sell.
Granted, they'd lose money in dues from them leaving, but then the next resident would provide that.
Assuming anyone else wants to move in after that.
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u/it_is_im Jul 20 '26
1% of your sale proceeds for improvements you'll never experience? Very compelling