HOA Dues

Can a property management company (possibly approved by the builder) change HOA dues to new owners that is different amount older owners are paying?

We are in a transition period and have no board in place, but a new steering committee. We have a property management company that was originally hired by the builder. The just sent out the 1st quarterly invoice for 2008 with a 22% increase. We went from $500 to $610. BUT I found out homes that settled within the past two months were told their HOA dues is $540 and now get this increase to $610. So they see a difference of $60 and the rest an increase of $110.

The increase is a question the steering committee is looking into, but my question is can the property management company change the dues in mid year to new owners? I thought HOA fees is equal amount to all owners so how can they legally change and increase amount?

I would appreciate hearing from anyone that might have some knowledge about this issue.

Thanks,
Eileen

I apologize if I was not clear and will try again.

Past two years since first homes settled and moved into through end of 2007 the HOA dues is $500.

Not addressing the increase for budget 2008 - the newer owners that have settled within the past two months were told their HOA dues is $540 (not $500).

How can the property managment collect $40 more from people that just moved in than the rest of the owners?

Eileen

I would think this may be a situation where the developer has an enterime board with some owners on it. If this is true, it probably won't do any good but I certainly would advice all the owners on the temporary board go on record that they oppose any such changes, demand that your concerns be recorded. If there is not temporary board named, those interested should go to developer and insist on representation. At some point it is all going to end up with all paying the same, if not, I hope I am not close when you have to solve this one.

EileenH: You state the property management company is under the builder; and you have no board in place. You are in transition prior to turnover to residents, but it has not occurred as yet.

I'm not certain you have supplied clear and pertinent information to your situation. The property management CANNOT increase fees; they only function at the builder's discretion, and for his purposes. Your documents may/should define the determined monthly assessment fee as well as a one-time 'Assn. Initiation Fee' for all residents. If the 'builder' (not the mgmt. company) increased the assessment for 'new buyers' he would have had to have a signed agreement with them. And...with all due respect, your new neighbors may not understand what they have 'told you'.

Now for 2008, you need to review your documents to learn at what percentage of units sold does the turnover occur. At time of turnover, a meeting is to be held and a resident-controlled Exec.Board must be elected. All financial documents are to be in place for residents to learn where the money has gone. There is much info on this site re turnover and what rolesresponsibilities the developer and residents must assume.

EileenH - Assuming that for the past two years the existing owners have been unable to use the community to it's capacity due to construction of elements there is another way to think of this. For two years the existing owners have been paying into a fund for elements not constructed by the developer. In a way they have been bearing the burden of costs whereas the new owners did not. By keeping the existing owners maintenance at $500 and the new owners at $540 there may be an offset. Whose to say that the maintenance won't go up in another year with three tiers, $500, $540, $..., so on and so forth.

Construction costs have risen dramatically in the last two years so HOPEFULLY the developer is setting aside a portion of the maintenance towards a reserve fund for the future owner controlled board and association. If I were you I would affiliate with the developer to form a volunteer financial committee and get my hands into all the details I could prior to the developer pulling out.