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?
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