Gut Wrenching Decisions about Amenities Can Affect Active Adult Communities

Category: Active adult communities

May 6, 2011 — What would you do if you were in this situation: Your community’s golf course is in terrible shape, even though you and every one else in the community is paying homeowner association fees to maintain it. The developer of the community that owns the golf course is either in foreclosure, or about to be foreclosed on. Would you vote to buy the course?

That particular situation or variations similar to it are unfolding in…

a number of active communities around the country. Fairfield Harbour in New Bern (See “When Bad Things Happen to Good Communities“, The Shores near Dallas, and the Lake Barrington Shores Home Owners Association in Illinois are 3 that we happen to be aware of. The issues are gut wrenching for everyone involved, and usually stir up great debates, bad feelings, and lawsuits. Whole communities can become divided.

Just think about some of the issues:
- If you are a golfer, you probably answered that you would vote to buy the course from the developer or bank, assuming you could get it at a fair price. After all, playing golf in your own neighborhood is pretty nice, and now you will have some say about its condition and maintenance.


- But if you are not a golfer, your decision to buy it or not is more difficult. You don’t play, so why would you want to pay an assessment or sign on to a loan for an expensive purchase? You might be more favorable if you were thinking of selling your home and wanted to keep the value of your home high. Or you might just say that if you leave it alone the developer will eventually go bankrupt, and the association will pick it up for a song. Then you can turn it into a park that is cheaper to maintain.

Similar decisions can come up with other amenities like clubhouses, swimming pools, and marinas. Variations of these problems arise when the original developer sells out the last homes in your community. Is their intention to stay and turn the amenities into a profit center, or will they turn the facilities over to the HOA to manage?

Bottom Line
Before you buy into an active adult or 55+ community get familiar with the status of the amenities. Who owns them, and who is managing them? What is their financial and physical condition? Will any of this change in the years to come?

What do you think?
Please use the Comments section below to share your experiences and thoughts on these issues.

For Further Reference
Meet the New Boss – Your HOA (1st of 3 part series)
Community Associations Network
Review of Lake Barrington Shores

Posted by John Brady on May 6th, 2011
Comments (4)
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4 Comments »
lonnie l mercurio says

good food for thought.we had not thought about those situations.

May 7th, 2011 | #

retirement coach says

It is also important to discover the accounts receivable attributable to unpaid HOA dues. There can be enormous balances of unpaid HOA dues on the books. If putting a lien on the home is the only recourse, some owners figure it will only matter if/when they sell their home. If all of the homeowners are not up to date on their HOA dues it means special assessments to those who are paying. Why would you need to pay “extra” when your neighbors are not paying their fair share? You would be amazed at some of the past due balances. Ask as part of your due diligence in reviewing communities. It’s a hidden cost that you need to discover.

May 7th, 2011 | #

oldnassau says

With respect to golf courses: Here in South Florida, at (at least) two Century Village communities, the interlinked golf course have closed because of declining use. But the owners want to redevelop the land into strip malls, office buildings, assisted living buildings, etc. With funding from fees and convtributions, COA’s and resident groups are opposing and commercialization.
Go to http://century-village-wpb.blogspot.com/2011/04/golf-course-preliminary-development.html for more details.
Point is: Golf Course land, even in this down economy, will generate far more income when commercialized. Or else, your fees have to support the course, even if you don’t play. So be aware.

May 7th, 2011 | #

Arubakt says

We had a similar situation where after all the lots were sold our developer pretty much said buy it or we are selling to someone else who may or may not keep the course! After due diligence, we did buy the course and found we did a better job of running the course and the clubhouse than the management company they had been doing it before. Through trial and error and some determined people in the community who volunteered a lot of their business expertise and time, we found a new management company and we are in pretty good shape after 3 years. Of course, we have not been able to go completely private as we had planned, but the course is maintained, we have a much better dining experience and are making a little money as well!

May 7th, 2011 | #

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