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Subject: Expenditure
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10/24/2005 7:11 AM  
I am in a new subdivision. We have not yet taken over our HOA but will soon. The developer has charged our HOA with the cost of building the front entrance into the subdivision a cost of 72,000.00 which in the budget we pay 3,440.00 a year toward that debt. Is that normal? We only have 200 homes that pay 50.00 a year in dues. Some of us will have our homes paid for b4 we pay for the entrance wich is a wooden fence with a rock Monument. We feel like we have been screwed b4 we even got started. Can someone enlighten me. Is this normal to have such debt at the begining?


10/24/2005 5:13 PM  
I would say it's not your cost until the HOA is yours, free and clear. If plans and other documents created by the developer show this fancy entrance, then I believe the homeowners have already paid for it as it was essentially a "promise" and therefor already owned by those who have bought houses.

Be aware that local elected officials depend on developer contributions, so be wary about where you take the issue for resolution. Get the opinions of at least two HOA lawyers, providing everything you know.

I squeezed many thousands of dollars out of my developer, who was under Chapter 11 bankruptcy protection at the time. I found my leverage and made it not cost-effective for him to fight us.



10/25/2005 11:34 AM  
If this cost is supposed to be borne by the homeowners and/or association, this fact must be clear and in writing somewhere in the documents. Ask where and read them. Generally, the Declaration runs with the deed.

Is your developer the acting HOA, or does the HOA get formed at turnover (it varies). If the HOA gets formed at turnover, I don't see how you could be obligated as an association to something you did not agree to. If the developer agreed to this (grossly overpriced) entrance when he submitted development plans to the town or municipality , then take this up with them.

I applaud your question, as most people would just 'pay up' because someone told them to. Additionally, who is to say that other fees/costs/improvements will not (or have not) been charged to the association as well.

Good Luck,


10/25/2005 3:53 PM  
Thank you Hank for that response it is very helpful and I am forwarding it on to my neighbors
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