HOA question

Bobalos

Bobalos

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to make a long story shorter, we own a condo in Santee, CA that has an HOA.  I just received the annual financial report & not only did they write of $20K (with no proof of what it was for), but they are in the hole $26K on a $370K budget (and they are bringing $41K of debt into next year as well). 

Can an HOA go bankrupt? (I would guess it can).

if it does go bankrupt, then what??? 

How much damage is that going to do do my property value (the condo is an investment for us @ this point). 

 
So isn't a HOA just a co-op of the Home owners? Won't they just up your fees to balance shortages? Maybe new management?

 
My understanding is that its much more complicated than that.  As I understand it, its is its own "company" that is connected to the community with insurance & boards & so on.  I would guess though that there are a number of ways to skin that cat & it kind of depends on how they set it up.... 

ours has a board & a property management company, and auditing company & lawyer & so on...

 
Yes they can go bankrupt.  Once that happens the courts will start making decisions to make sure you become stable again.

Question, how did this happen?  Was someone mishandling all the money?  Most HOA's have enough nosey owners that would question this every month.

 
I ended being President of our HOA because nobody else would do it. There are different types of HOA's. Some are simple where they only have oversight of a few rules like what color you can paint your house or if you can park an RV on your driveway. Then there are HOA's that have maintenance requirements whereby the HOA actually maintains the outside of condos and all the grounds. So really depends how extensive your HOA is. As others have said, yes they can go bankrupt. Unfortunately, at the end of the day, the property owners will end up holding the bag. 

And yes, some of these crazy HOA's and their boards can effect property values. Who wants to buy a property into a nightmare if your HOA is bankrupt and is supposed to maintain the outside of your condo.

 
There is a pool & they manage that.

There are "roads" that they manage.

They own the "fencing between properties", but we own the patios. 

They own the roofs.

They complex is from the mid 60's so everything is old as sheet & falling apart.  the property was apparently miss-managed for a decade or more before we bought the condo.  now its getting better, but IMO, they are still in trouble....  

This was something my wife & I did to "help out her "father"", & its been a huge PITA for me ever since.  I want the Ph.u.ck out of this thing, but its sure is hard to be unhappy with the growth of it as an investment.  If we do sell it, WTF do I do with the gains??? 

Bob

P.S. Ph.u.ck NewScum... 

P.P.S. thanks for the feedback.

 
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Bobalos said:
There is a pool & they manage that.

There are "roads" that they manage.

They own the "fencing between properties", but we own the patios. 

They own the roofs.

They complex is from the mid 60's so everything is old as sheet & falling apart.  the property was apparently miss-managed for a decade or more before we bought the condo.  now its getting better, but IMO, they are still in trouble....  

This was something my wife & I did to "help out her "father"", & its been a huge PITA for me ever since.  I want the Ph.u.ck out of this thing, but its sure is hard to be unhappy with the growth of it as an investment.  If we do sell it, WTF do I do with the gains??? 

Bob

P.S. Ph.u.ck NewScum... 

P.P.S. thanks for the feedback.
Click to expand...
The gains!

Check with your tax guy or accountant. We have a house in Havasu that is rented out year round. We looked at selling but because we haven't lived in it for the last 2 years we will have to pay capital gains tax on it, which is a crap load!. Unless we buy another piece of property of equal or more value. Which we have to identify in 45 days and close in 180.

Oh, HOA's suck!

 
what @D-n-Tyke said.

We are not ready to buy just yet, which is what is killing me with this thing.......... I was hoping to get another 5 years out of this thing, but if they are going to implode, I want out.  ALL of the azz-hats that run the HOA are just that.  And the "professional HOA consultants" are anything but that..........

 
Capital gains are less then income taxes. Also a factor is number of years owned will equate to percentage of the gain paid. Best check with "your" tax person though.

 
Capital gain tax rate is only going to go up!! Sell it, pay your 15% now and move on with your life. You have far greater risk of paying much more in taxes the longer you wait. 

 
Bobalos said:
what @D-n-Tyke said.

We are not ready to buy just yet, which is what is killing me with this thing.......... I was hoping to get another 5 years out of this thing, but if they are going to implode, I want out.  ALL of the azz-hats that run the HOA are just that.  And the "professional HOA consultants" are anything but that..........
Click to expand...
i dealt with some professional hoa consultants and some of the ones that have a business of running the hoa for you. they are all scams. we paid 400 year per front door, we had 25 front doors on our townhomes. they took the funds, we ended up not paying for like 2 years because they couldn't provide proof of where the funds went, no annual hoa meeting like it called for, even though we owned 1 whole city block, then best we could get was lawn service every 2-3 weeks. it took our properties from being BRAND NEW, to looking like section 8 in less than 2 years. I ended up mowing weekly just so the place would look like someone would want to live there. we had 0 issues keeping full even at top dollar, but the hoa was a huge struggle. those hoa consultants/ for profit companies are out for themselves and themselves only.

my personal HOA has been opposite. luckily we have an hoa president that wants to do it, keeps our housing addition in check, keeping values up. 

we have 52 homes in our addition with no possibility for growth due to one way in and one way out, so we are lucky we are as big as we can get.

mowing, landscaping take up prob 75% of our dues, we pay 300.00 per year. we have no gates, just electric on the signs at entry. then we have some repairs on sprinklers and trees that die off or get killed in the freeze, but overall its not bad.

 
My first house in Rancho Santa Margarita, California had crazy fees.. like $249 and another for $49 each month.. HOA and Mellorouse sp). So my property taxes were 2.1%. I now live in unincorporated Laguna Hills. No HOA and only 1.1% property tax.

After my car was towed like 3 times and we sold, I vowed to NEVER own a property with an HOA.

We have a friend who owns a Condo in Kauai (lots of us just own weeks, we have 3).. they had a HUGE project at her place and had to pay an additional $2k/month for 1 year (every owner who had a week, got an additional $500/week bill). 

EFF HOAs.

abc

 
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thanks for the input folks.

Bob

 
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