Basis for HOA fee increases - SF vs TH

Mike,

I will bet that the management company CAN show you a difference in expenses to maintain the Townhomes verses the stand alones. Do the owners of the town homes pay for painting, roofs and those expenses? How about common driveways for them and landscaping? If those are association expenses, then this far along, the townhomes have been getting a deal because the stand alones have been sharing their costs to maintain them. It is not uncommon to seperate the costs of the different type of dwellings. Ask the management company to show a breakdown of the financials.

MaryA1 - I don't remember seeing another thread on this. All of the homes, Single Family and Townhomes are all fee simple, so the owners are all responsible for all exterior maintenance. The only really significant difference in services stems from the fact that the townhome common area parking areas and streets are maintained by the HOA. The single family section has state maintained streets. The townhomes are a mix of garage and non-garage style homes and all owners (single family and Townhomes) maintain their own driveway. I really don't see how anyone can possibly surgically separate the expenses incurred between the townhomes and the single family. If the wrong group were on the board, the potential for conflict of interest is significant. I really don't see where they have the right to split percentages and make that determination as to how much to increase the single family HOA fees verses the townhomes.

Mike,

Below is the msg you posted on 10/23 with the title "Assessment increase is different for SF vs TH":

10/23/2008 4:17 PM Quote Reply
Since 1989 our HOA has raised assesments by a percentage of whatever the current assessment was. The percentage increase was the same for everyone and it didn't matter if you lived in a single family home or townhome. If the Single Family residents were paying $150 per quarter and the townhomes were paying $200 per quarter, the 5% assessment was applied in each case, so the new assessment for the singles would be $157.50 and $210 for the single family homes. Now it appears that the Board is considering raising the assessments (HOA fees) for the single family homes by a lessor percentage. IE - Perhaps the singles my get a 4.7 percent increase and the townhome owners may bet a 7.6 percent increase. It's never been done that way and I've dug all through the docs for an answer on this. The single family homes on are state maintained roads while the townhomes are mostly private roads and parking lots. Both sections benefit by common area maintenance (perhaps more so for the townhomes). Both sections get trash removal, they both have access to the trails, tennis courts and swimming pool. We have an offsite professional management company, and of course General liability, Board and Directors D&O etc. Now unless your accounting methods are so exotically accurate that you can tell for sure where the money is going, this really seems unfair and it almost seems like a bad precedent. If the board is comprised primarily one group or another, they could certainly favor lessor increases for there section. It's just one HOA and it's very difficult to account for the money in terms of who is benefiting. Does this sound fair and is this a standard practice? Now I could see this if there was one master association with two sub clusters; but THAT'S NOT the case. What are your thoughts on this?

Mike,

Getting old and forgetful plagues all of us sooner or later! LOL

I think the best tactic would be to just forget what has happened in the past and start from this day forward. It appears to me the only expense that is not shared by both sections is maint. of the private streets in the TH section. IMO, funding for this should be set aside in a separate reserve account and only come from the TH owners. Month to month maint. may be very nominal; however, when the streets need to be resurfaced it will be very costly. If money is not set aside, it could necessitate a sepecial assessment.

I think that they need to break down items by line item. While some expenses are common (and should be shared in common) others are not. They should be able to state what the expenses are for maintaining the areas of town homes and single family dwellings. Insurance should be split per unit without regard to type.

The question is, how were the fees set originally? Do you think the developer really had any clue as to what each section actually cost? Most likely he just set the fees based on some figures in his head.

But if you keep track of expenses properly, then it can be determined what is spent on each and what is spent in common. There will be some room for disagreement in what belongs to common and what belongs to to each side. But a reasonable figure can be found.

Case closed - The board increased the fees the same in terms of using the same percentage rate. The TH fees have always been much higher than the SF fees, so in effect the th fee increase is higher than the SF. The ONLY thing that's different between the two sections is streets and sidwwalks. This is the big item that the SF homes do not have to pay for, and the two sections share every other common elements and benefit the same from these. Tks again;