New built small hoa community
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Anonymous
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I am looking at buying a townhome (new build). It’s only 5 townhomes and they are considered condos. Reviewing the disclosures, because this is a new build, there is no HOA set up, no financials, and no reserves. What they disclosed was: condo fees will be $200/month and cover outside maintenance, insurance, snow removal, etc. With 5 units they will get $1,000/month and they are budgeting costs at $11.8k/month. So basically the HOA will barely cover the cost of expenses. I’m really interested in this property but this scares me. Also, the builder is saying the 5 owners will get together once the 5 units are sold and decide on how to run the HOA. Anyone been part of a small community like this? Pros, cons? Is this usual?
Annual Budget Report Fiscal Year: 2025–2026 Use of Funds – Operating Expenses • Utilities (Water, Sewer, Garbage, Street Lighting) – $4,000 • Yard Care (Mowing, Fertilization, Weeding, General Maintenance) – $1,200 • Snow Removal (Including Ice Melt for Sidewalks) – $800 • Insurance Premium (Property and Liability Coverage) – $5,460 • Pest Control Services (Quarterly Treatments) – $360 • State Business Entity Renewal – $10 • Bank Account Maintenance (Checking Fees) – $40 Total Operating Expenses: $11,870 Sources of Funds • Monthly HOA Dues ($200 per Unit × 5 Units × 12 Months) – $12,000 Total Projected Income: $12,000 Budget Notes: The proposed annual budget ensures adequate coverage for all necessary operational expenses while maintaining a modest surplus of $130/month to account for unforeseen or incidental costs that will be considered reserves. The HOA does have an HOA transfer fee of 0.5% but it does not apply to the initial purchase of the new construction. |
Anonymous
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Every one of those expenses goes up yearly
Meaning HOA's monthly fee goes up yearly Plus that HOA needs capital improvements ie Roof maintenance or replacement later etc... I would not do this |
Anonymous
| I would not do this. If even one homeowner is non-cooperative, all manner of problems will result. |
Anonymous
| Absolutely not. Fees will absolutely go up in the first year once they realize this isn't enough money. And one difficult person will make the HOA beyond miserable and impossible to deal with. |
Anonymous
| How do you deal with these so? Its a small community so this would always be an issue. How do you mitigate it |
Anonymous
Only way to Mitigate is to live somewhere else. |
Anonymous
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I bought a new build condo years ago. The builder will intentionally start the hoa fees low to get you interested. Once they’re sold they have to go up to cover expenses. Ours went from $179 a month to over $400 a month a few years later.
5 houses self managing is crazy. What happens if no one wants the hassle of being the president etc? Treasurer? I’d run away. |
Anonymous
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Might depend on the state/county but we are in moco and have to have a reserve fund set up by law too. I don’t remember the exact amount as I’m not on the board anymore. Oh, and insurance in case someone gets hurt on his property and sues.
Only 5 houses in an hoa is crazy. |
Anonymous
| Not unless you could afford to buy all five units and just be the landlord. No way. |
Anonymous
| This doesn't sound right. Are you sure you aren't missing some information? |
Anonymous
| My community of seven houses has made this kind of hoa work for the 27+ years ive lived here. I am one of two original owners. We contribute $4800 annually for landscaping snow removal and some other things. But sfh, no attached walls and everyone carries their own insurance and takes care of their own roof etc |
Anonymous
| Nope absolutely not |