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Subject: CAN A CITY MAKE A HOA PAY FOR A PUBLIC PARK?
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AnnaA3
(California)

Posts:29


05/03/2021 8:32 AM  
I live in a city in southern CA. Our City just sold property they owned of a little over 5 acres to a builder to build 42 homes with a park. The City Council approved it last meeting but they are deeming the park a public park and making the HOA pay for it's upkeep thru their HOA dues.

I wrote the City Council and the City manager asking why they are making a selected group of homeowners in our city pay for a public park. I ask what is next, an HOA builds a swimming pool or a club house and the City makes it public but has the HOA pay for it? I have not received a reply and it has been a week and a half since they received my letter.

The City must have changed the Specific Plan for that neighborhood letting them know that they will be paying for the park with their dues. I live in an HOA in the City for over 35 years and I know for a fact that people buying in our neighborhood rarely reads the CC&R's or Specific Plans before they move in.

This new neighborhood is geared for young first time buyers, so they say. The prices are in the $700,000. I wrote the Council and City Manager that the upkeep of that park over the years could get high and these young families may not be able to afford their dues.....then what? Liens or worst.

If a park is "public" then the "public should pay for it". I asked for their reasoning behind this decision. Is there something they are trying to get around? No answer.

Is this even legal?

Thanks in advance for any impute.



CathyA3
(Ohio)

Posts:1881


05/03/2021 8:55 AM  
Do you have a link to info about this?

I think you'd have to look at the terms of the sale and any restrictions on the land to determine this. I'm not a lawyer, but I don't see how a city can create a public park on private land, which is what an HOA is. It seems like a recipe for prolonged litigation, if in fact this is what has happened.

I also can't see any savvy developer agreeing to a deal like this. Once word gets out - and word will get out even if nobody reads the CC&Rs - who on earth would buy a home with conditions like this? Not only would this be unfair to potential owners, the presence of a public facility inside an HOA creates some significant liability issues for the HOA.

It seems like a recipe for prolonged litigation, if in fact this is what has happened.
AnnaA3
(California)

Posts:29


05/03/2021 9:11 AM  
I was referred to the City Web-site, but it only goes over the plans for this development. Nothing about the park. More of a promo piece. I agree with you and I told the city this could end up in litigation. I agree with you.

Thank you for you impute. I appreciate it
MaxB4
(Maine)

Posts:209


05/03/2021 9:17 AM  
Yes they can and the funding will be done through a Mello-Roos.
TimB4
(Virginia)

Posts:17599


05/03/2021 9:22 AM  
I agree with your view of the issue.

I would make the suggestion that rather then have the HOA pay for it, the city creates a special tax district to pay for the upkeep.
JohnC46
(South Carolina)

Posts:10944


05/03/2021 1:54 PM  
It seems to me this was a price the city wanted the HOA to pay for approval. As long as both parties agreed, no harm, no foul.

I have seen case where a development had to give land to the city for schools, etc. Thus not uncommon to give to get.
DouglasK1
(Florida)

Posts:1583


05/03/2021 2:19 PM  
I agree with John. Two parties agreed to a set of terms, and I see no reason why it would be illegal.

On the other hand, it might not be in the best interest of buyers in the development, but that's between the buyers and the developer.

Escaped former treasurer and director of a self managed association.
KerryL1
(California)

Posts:8015


05/03/2021 2:50 PM  
Agree with some others. Yes, cities can do this. Here's a different version.

Our 20 y.o. urban high rise is surrounded by a city block with 2 sidewalks of pavers and 2 wide concrete sidewalks.

The City required the developer to tint the concrete sidewalks in back & light grey 15' wide striping as on nearby sidewalks going back 30 years. The city also required many liquid amber trees on all 4 sidewalks in wells covered with tree grates.

Our HOA is responsible for re-coloring the sidewalks and replacing the trees. Our Building engineers painted the sidewalks every 2-3 years with the drive entry to our underground garage levels every year.

BUT, a couple of years ago our urban 'hood was flooded with electric scooters & other wheeled devices. What a mess they made of the sidewalks. And nothing can get them looking decent. It was quiet during the height of the pandemic, but now the scooters are back. City policy is they must be ridden in the street, but that's not enforced. We'll paint soon, but they'll only look OK for a short while.

Point is, not only are there expenses at the beginning due to cities' power, stuff happens and more expenses emerge.
MelissaP1
(Alabama)

Posts:10126


05/03/2021 2:54 PM  
The land was a park originally correct? It sounds like the city is doing a quid pro quo arrangement here. (Always wanted to say quid pro quo in a sentence). The city had some land that really doesn't sound like it was benefitting them. They don't make any money off of having a park. It's more of a blackhole of expenditure for them.

A builder came along and told the city that if they sold them the land it would generate more tax revenue for the city. More houses mean more tax money for the city. If they would sell them the acreage then they agree to keep the park.

Remember not all HOA's are owned by the owners. This will most likely still be owned by the Developer. It will be the Developer paying for the Park. Which helps them as a benefit for attracting potential buyers. Which is what a HOA is designed to do. ATTRACT BUYERS. It is NOT to "keep home values".

So what really is the problem? This isn't unlike owning common property or amenity. It's just that the land would be public and subject to public rules/enforcement. This may even be a benefit considering the police can be involved more in securing the area versus homeowners.

Former HOA President
AnnaA3
(California)

Posts:29


05/03/2021 3:12 PM  
Thank you for the response.

Maybe a little more information will help. My City is only about 8 miles by 8 miles. It is small. The land where they are going to build this development has been owned by the City since 1972. Part is used for water storage and the other was used by a private nursery which will be vacating. The part that was the nursery will be used for the new development.

This area is in a older neighborhood in the City on a quiet 2 way street and the people in that area are already upset because of traffic issues coming there way and also the City changing the Specific plan for that area, letting high density housing on the street. 8 houses to an acre which started at 12 homes per acre and now is up to 42. The neighborhood petitioned for 33 homes per acre but the Council voted for 42 per acre.

I do not live in that area but I know when our neighborhood was built in 1984, the builder bought the land from a private party and had to build a school and give the area outside our HOA to the City for a public Wilderness park. We did not pay for the school or upkeep of the park out of our dues.

The City already owned this property that they are putting high density housing on. If they wanted a public park they could of kept part of the city's land and made it a public park. I guess they wanted the builder to pay for that land and build the park on it at the expense of homeowners in our City.

There is no HOA yet, nothing is built. So it is not an HOA agreeing to pay for the park, it is the builder and the City. So what is the give and get?

So what some of you are saying is if a new development has a new Swimming pool and Club house in an HOA it can be open to the public by the City and the HOA has to pay for the upkeep? That is legal?

Even if it is legal, is it ethically right?
AnnaA3
(California)

Posts:29


05/03/2021 3:32 PM  
All the HOA's in our City are owned by the owners. I am in California and I never heard of the Developer owning the HOA....That is interesting...I will look into that.

Thanks
LetA
(Nevada)

Posts:1160


05/04/2021 6:24 AM  
Posted By TimB4 on 05/03/2021 9:22 AM
I agree with your view of the issue.

I would make the suggestion that rather then have the HOA pay for it, the city creates a special tax district to pay for the upkeep.





I think that's what is commonly called SIDS and LIDS
special improvement district and local improvement district. There should be signs in the area that ay SID or LID, some will have both.
CathyA3
(Ohio)

Posts:1881


05/04/2021 6:28 AM  
Posted By AnnaA3 on 05/03/2021 3:12 PM


... snip ...

There is no HOA yet, nothing is built. So it is not an HOA agreeing to pay for the park, it is the builder and the City. So what is the give and get?

So what some of you are saying is if a new development has a new Swimming pool and Club house in an HOA it can be open to the public by the City and the HOA has to pay for the upkeep? That is legal?

Even if it is legal, is it ethically right?



HOAs are deed-restricted communities. This means that there are covenants, conditions and restrictions (often referred to as CC&Rs) attached to the deeds of all homes in the community. These CC&Rs often run to many pages, and they form part of the contracts that owners sign when they buy.

Another feature of HOAs is that there are commonly-owned areas in the community. These may include things like a pool, clubhouse or play areas. They may also include private streets and other infrastructure. These things must be maintained by the HOA, which is why homeowners pay assessments.

HOA facilities are not open to the public: they are private. There may be cases in which an HOA does open their facilities in exchange for rental fees or something similar. However, doing so can change the nature and legal obligations of the HOA, which nearly always is a non-profit corporation that is limited to residential and not commercial use. It will also change the risk profile of the community for insurance purposes, and it will change some of the laws that the HOA is subject to (such as ADA compliance).

No one can retroactively create an HOA without the approval of the affected homeowners. No single party can unilaterally change the terms of a contract unless that contract has already spelled out the conditions under which this can occur (and who would sign such a contract if they're the other party?).

It may or may not be ethically right, but if it's legal then it can happen. I'm not convinced it's legal because there are a lot of hoops that must be jumped through and I haven't seen that this has happened yet. However, there is a need for housing all over in this country, particularly in high cost of living areas. This is leading to changes in zoning laws to allow higher-density communities, for example. Unfortunately, in some cases things like infrastructure needs and traffic patterns are afterthoughts. So it's smart to be concerned about such things.

CathyA3
(Ohio)

Posts:1881


05/04/2021 6:34 AM  
Posted By AnnaA3 on 05/03/2021 3:32 PM
All the HOA's in our City are owned by the owners. I am in California and I never heard of the Developer owning the HOA....That is interesting...I will look into that.

Thanks




The Developer is always in control of an HOA at the beginning since he owns the land, files the necessary paperwork, and makes all of the decisions. In the paperwork there will be (or should be) a section that addresses transition to homeowner control - this is usually based on the percentage of homes that have been sold. Generally this is pretty straightforward, but I've heard of communities in which the Developer retained an unusual amount of control long after he should have been gone. This is one reason people who are thinking about buying in an HOA that is still under development need to thoroughly read those reams of paper they're given before signing on the dotted line.
AugustinD


Posts:301


05/04/2021 7:32 AM  
Interesting. Here's a link to discussion of what seems to me to be a similar situation:

https://www.palmspringsca.gov/home/showpublisheddocument/53388/636356277495870000

This is a July 2017 Palm Springs City Council Staff Report discussing a plan for a developer to build a HOA-governed subdivision and a public park. The long term maintenance responsibility for the park was a point of disagreement. To me, it looks like the city and the developer were headed to an agreement where the HOA maintained the public park.

The interested reader may wish to do a keyword search for "public park" in the document linked above.

I think the public park was the price the developer paid to convert an abandoned golf course to residential use. This paragraph from the report seems a little telling:

"The major issue facing the developer is that the underlying land use designation of the former Palm Springs Country Club Golf Course is "Open Space / Recreation." This designation does not allow residential use. Nevertheless, the Land Use Element of the City's General Plan does not necessarily provide an absolute prohibition on residential development; rather it discusses the general need to balance land uses and ensuring compatibility with adjacent land uses."

From my reading in the past, I realize a city's "General Plan" is a powerful legal document. Granted city land use departments, city planning commissions, and city councils seem to push square pegs into round holes all the time when it comes to development. Develop and develop more is the mantra, all under the eye of a presumably careful hierarchy of city entities, and including formal public comment periods offered frequently, as the law requires.
CathyA3
(Ohio)

Posts:1881


05/04/2021 8:09 AM  
I think this will boil down to whether or not a governmental entity (the City) can force a subset of private citizens (HOA members) to maintain a public facility (the park).

Regardless of the legalities, I suspect the practicalities will kill this - for instance:

* Will the HOA be able to insure itself adequately, or will insurers look at this and say "nope"?
* Who is responsible for law enforcement in the park, both the routine "keep the drug dealers out" and more involved things such as ADA compliance?
* Does "maintenance" refer to routine upkeep or the more extensive kind that belongs in reserve studies? How much autonomy does the HOA have in deciding this?
* What happens if the HOA goes into receivership?
* What happens if/when the investors invade and the HOA becomes mostly a rental community with absentee landlords (since these folks are notoriously hands-off when it comes to running the HOA)? Since they're talking about higher-density housing, this is not an unreasonable scenario.
* What happens if the HOA simply ignores their responsibilities? How much can the city do to enforce this?
* Finally, who on earth would buy homes in this HOA? Although given how uninformed buyers are about HOA stuff in general, this may not be an issue for the Developer...

Seems to me that something like this is a recipe for non-stop legal wrangling. You couldn't GIVE me a house in such an HOA.

AugustinD


Posts:301


05/04/2021 8:23 AM  
I happen to think what the OP is describing is not uncommon. I am not in California, but where I live, a privately owned 18-hole golf course similarly went bust, and developers swooped in. (I still remember a likely-naive city councilor saying to me that she thought the second golf club owner would never sell to a subdivision developer. Ha. Doh, it's all about the money.) The city and residential home developer pounded out an agreement that included a good deal on how the City was giving up the wonderful-ness and zoning for a golf course for a subdivision. Incredibly complicated. But development and regulation of land is the raison d'etre for most any city government, isn't it?

I think all of the concerns mentioned have solutions. Insurance was on my mind as well. But isn't it true that guests of HOA members come in and use pools, have a slip-and-fall or similar, and the insurers figure it out?

As for enforceability of maintenance: I tend to think the maintenance requirements would be written down and enforced in the same way the city enforces any agreement.

I think one has to observe the process of a developer applying for xyz from a city to get a handle on all the minutiae and thousands of pages of documents that go into a developer's application for city approval of xyz. CathyA3, I thought you worked with a developer? Maybe what the OP describes is just not done where you are.

On the other hand, a popular former city councilor where I am railed against a proposed, HOA governed development not long ago, profaning how HOAs are not known for keeping their promises when the promises involve neighbors' interests, like drainage, traffic et cetera. "You know those HOAs... ," he'd say.
CathyA3
(Ohio)

Posts:1881


05/04/2021 10:27 AM  
Posted By AugustinD on 05/04/2021 8:23 AM
... snip ...

I think all of the concerns mentioned have solutions. Insurance was on my mind as well. But isn't it true that guests of HOA members come in and use pools, have a slip-and-fall or similar, and the insurers figure it out?

... snip ...

I think one has to observe the process of a developer applying for xyz from a city to get a handle on all the minutiae and thousands of pages of documents that go into a developer's application for city approval of xyz. CathyA3, I thought you worked with a developer? Maybe what the OP describes is just not done where you are.

... snip ...



I think the difference with the insurance is that the HOA has at least some control of private property - they can make rules about behavior and remove access for those who won't behave. They can put up No Trespassing signs, which I think strengths their ability to prevail in court if an uninvited person gets hurt. At least in theory. With a public park, the HOA has no say. And it always bugs me when people try to separate accountability from control.

Yes, someone who gets hurt would sue the city first since it would be the city's property. But if the city had any chance of making a negligence claim against the HOA for example, I'm sure they'd do it. And yes, the problem is probably solvable by throwing enough money at it. But HOA's aren't usually rolling in dough, and they run the risk of becoming uninsurable altogether because of their claim record.

As for whether it's done where I am, I'm sure it is. The developer of my community saddled us with a legal agreement in which we are 100% responsible for maintenance of an access road lying between our property and the strip of shops adjacent to us. That road gets beaten to pulp by the delivery trucks and other traffic associated with the businesses (as well as traffic funneling off the busy multi-lane road when that road is jammed for some reason). In my opinion our developer threw us under the bus, and occasionally a homeowner will figure this out and threaten to sue the board and everybody else (as if the board has any choice about it). The one difference in this case is that the access road is private and on the strip owner's property, and in theory is only supposed to be used by those who have a reason to be there. The legal agreement is between two private entities.

I'm used to cities offloading various expenses onto HOAs, saddling private citizens with things like road maintenance that should be public responsibility. But it's one thing for an HOA to have to maintain private streets - it's the HOA's property. A public park is a bridge too far for me, because it blurs the distinction between public and private in ways that bother me. (And since I'm displaying my telltale "worrying away at it" behavior, there is at least one legal gotcha buried in there somewhere. I need to pipe down until I unearth it.)

I've been burned once by stuff like this, it isn't fun.
DeidreL
(South Carolina)

Posts:1


05/05/2021 5:29 AM  
Our HOA is experiencing a "version" of this HOA pays for public use. We are a private gated community - pay for road, sidewalks and common area maintenance, repair, insurance, lights and even a special non-permeable water tax because we own the streets. The City has released a plan showing our community as the new bike path - through our private gated streets (and currently ungated sidewalks ) to a public park. We are very confused on why the city allowed the developer to install streets that do not meet city code - thus made the streets private and gated, but now those private streets and sidewalks are part of a city plan. We plan to gate the sidewalks and now the city says we can't do that - it is on private HOA property.
Can anyone provide some guidance?
We are currently attending city zoning and planning meetings trying to learn/ understand how all this works.
CathyA3
(Ohio)

Posts:1881


05/05/2021 8:03 AM  
Posted By DeidreL on 05/05/2021 5:29 AM
Our HOA is experiencing a "version" of this HOA pays for public use. We are a private gated community - pay for road, sidewalks and common area maintenance, repair, insurance, lights and even a special non-permeable water tax because we own the streets. The City has released a plan showing our community as the new bike path - through our private gated streets (and currently ungated sidewalks ) to a public park. We are very confused on why the city allowed the developer to install streets that do not meet city code - thus made the streets private and gated, but now those private streets and sidewalks are part of a city plan. We plan to gate the sidewalks and now the city says we can't do that - it is on private HOA property.
Can anyone provide some guidance?
We are currently attending city zoning and planning meetings trying to learn/ understand how all this works.




I don't think we know enough, but to the best of my knowledge the only way a city can take over private property is through the use of eminent domain, which is the right of a government or its agent to expropriate private property for public use, with payment of compensation. They can't just grab property and go on their merry way. This is a different situation from a city negotiating with a developer to put in public facilities in currently undeveloped land.

Most of the cases of eminent domain I've heard of occur when the city wants to put in a major thoroughfare or interstate, or wants to re-develop blighted areas - never heard of it for a bike path through an existing, well-maintained HOA.

I harp on this a lot, and the regular posters are probably tired of hearing it, but one of the things an HOA has to worry about is the liability risk of a bunch of uninvited people coming onto their property. This would include the risk of injury on common areas, vandalism or other damage, and an increase in crime rates, among other things. It's one of the reasons HOAs don't open their amenities to the public in order to make a few bucks. I'm sure that your HOA's insurer would have something to say about this.
AnnaA3
(California)

Posts:29


05/08/2021 1:39 PM  
Hi Everyone,

Thank you so much for your impute. I really appreciate it.

Anna
AugustinD


Posts:301


05/08/2021 1:53 PM  
Posted By DeidreL on 05/05/2021 5:29 AM
Our HOA is experiencing a "version" of this HOA pays for public use. We are a private gated community - pay for road, sidewalks and common area maintenance, repair, insurance, lights and even a special non-permeable water tax because we own the streets. The City has released a plan showing our community as the new bike path - through our private gated streets (and currently ungated sidewalks ) to a public park. We are very confused on why the city allowed the developer to install streets that do not meet city code - thus made the streets private and gated, but now those private streets and sidewalks are part of a city plan. We plan to gate the sidewalks and now the city says we can't do that - it is on private HOA property.
Can anyone provide some guidance?
We are currently attending city zoning and planning meetings trying to learn/ understand how all this works.
This is important enough that I think your HOA should hire an attorney and see what he/she says the HOA can do to stop the city's plans.
JohnC46
(South Carolina)

Posts:10944


05/08/2021 4:39 PM  
I think some are missing the point. The city sold city land (42 acres) to a developer to build homes upon the land with the condition that the developer build and maintain a park.

How the developer does this moving forward is their decision and the decision of people that buy a home there.

Posters are going off an tangents.

Stick to the question. Is what the city did acceptable/legal?
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