Condos--HOA fees--worth it?

[partgypsy]

Myself or at least this time in my life (with smallish kids) prefer a stand alone house on a piece of land.
Why? I've rented before. I do not like the fact I cannot paint the exterior of the house or if I plant flowers they will be mowed down, or if the water heater breaks I have to wait on the landlord's schedule for it to be fixed. With a condo you have shared walls with strangers. That's fine if you are OK with that, but I prefer a house with porches and land around them. Also my husband is handy, so while there are maintenance costs much of it my husband can do either solo or with help, and we can research and choose who works on the house, as well as budget ahead of time for those big jobs.
The house we were renting, they repaired the roof. My husband looks up (he worked as a roofer) and points out they put the flashing around the chimney wrong so water will be going under the roof. I guess it's just a control issue.

If there was motivation enough (living in an awesome city sans kids, wanting a small place centrally located) I can also see that. for this time in my life, prefer a house.

 

[craighnt]

I have lived in houses, condos and apartments for years at a time. In a big city, I thing condos are the way to go, but I say that with a big caveat. HOAs can be a small pain in the butt to a huge nightmare. They did not always exist, the big boom was on the 70s and its now basically the norm. The think is, there were originally intended for very minor stuff like keeping the law watered. These days, they are used for everything for every aspect you can think of and then some. That's fine but the problem is the power they have is totally unregulated.

What dose that mean in real terms? Well for starters, the people who usually run an HOA are residents who do it for free on their own time. This can be good if your neighbors are professional motivated people. But it can be really bad if they are ego driven, narcissistic, power starved individuals. Which of course this job seems to attract. Ever have a neighbor on you block you thought had a screw loose? Well, welcome to one of your new HOA board members. Why? Because no one else wanted the job and so he/she did.

I have seen things from HOA presidents cutting people off mid sentence with a gavel like judge Judy to alcoholic angry outbursts and personal attacks right in front of the crowd. People can be really nasty or really decent, it's a total crap shoot.

But back to the power thing. My neighbor lost her job, kept up with the condo payments but fell behind on the HOAs by about 3 months. They put her through hell. By the time she found another job (which was pretty quickly) she wanted to start paying the HOAs and set up a plan for the late one. They said absolutely not. They wanted her to pay everything she owed in one lump sum or they would not accept any other payments and started foreclosure proceedings. Essentially they forced her into even bigger debt by refusing and returning her payments. By the time she got a lawyer it was too late. Ridiculous, she had a 500,000 condo, was late by a few months and the HOA by returning her payments created forced her to fall further behind so they could take her to court and say see how late she is? They forced a short sale and she was left high and dry. All totally legal. Meanwhile she never missed a payment to the bank thinking that was the most important bill to pay.

So my point is, be very very careful. Like others have said, check to see who is on the board, are they people you can speak to? Are their reserves up to the legal amount? Can you get a copy of their rules and regulations? Best thing is to talk to other residents if you can. Because the board changes from year to year. Just don't ever, ever ever fall behind on those payments. Keep a back up plan.

FYI, as a rule of thumb, HOA payments are usually lower in brand new buildings to make it more attractive to potential buyers. This is usually a developer trick. What happens is once all the units are sold and the owner take control, they find out they need more money then they though. Expect them to slowly double over the course of 5 to 10 years. Then they sort of stabilize.

Also, don't get sucked into thinking all HOAs are the same. A 1 story house or condo should be a lot lower then a 4 story building. A highrise will be the most expensive just because its like a ship tipped up vertically in the sky.

Finally, don't be afraid to pull the trigger if you see something you want. I have lived in a condo now 20 years and dispute the HOA the benefits outweigh the negatives. I have total 24 hour security, guest parking, swimming pool, nice gym, great view, a sense of community, met some great friends and easy to lock up and go out of town without a second though. No yard work, maintenance on everything out side the unit I don't have to think about. And if there is a big problem you are not all on your own, people there all pitch in on how to solve it or get the job done. I can even have small pets, which most apartments and some condos will not allow.

Good luck, I say go for it with eyes open.

 

[movie zombie]

another note re the newer condo complex: a friend bought into one in Mountain View in 1989 only to find out that there were "issues" with the builder of the complex which affected the structure [outside] and in some cases the units themselves [inside]. the HOA ended up having to sue to get the proper repairs. you guessed it: HOA had to put out a special assessment to cover the legal fees. at the end of the day the repairs were properly made.

I would note that there can be issues with new homes in new developments also. read the fine print re what the developer will cover and will not cover.

 

[amc80]

another note re the newer condo complex: a friend bought into one in Mountain View in 1989 only to find out that there were "issues" with the builder of the complex which affected the structure [outside] and in some cases the units themselves [inside]. the HOA ended up having to sue to get the proper repairs. you guessed it: HOA had to put out a special assessment to cover the legal fees. at the end of the day the repairs were properly made.

I would note that there can be issues with new homes in new developments also. read the fine print re what the developer will cover and will not cover.

I am currently going through this with my condo. We are in a pre-lawsuit for builder defects. It's all external (mostly having to do with stucco). Our association is handling everything at no cost to the owners.

My HOA is fantastic, as I've mentioned. I had an issue with some water leaking into my attic (caused by an exterior issue, which is the HOA's responsibility). Within a day they had someone there fixing the problem and repainting my ceiling.

Regarding the investment potential, it really depends on the area. My condo has gone up about 30% since I bought it in 2009. I'm in the process of selling it right now.

 

[craighnt]

HOA's especially newer ones seem to always sue the developer sooner or later. The one I am in did that as well, usually some "defect" that much be fixed for thousands or millions of dollars. HOA finds one little thing wrong, build a case by making a mountain out of a mole hill, and gets all the residents on board thinking they have been swindled by the developer.

In reality its usually simple fixes you would normally absorbs as maintenance if it were a single family house. But what it dose is fix the problem and if they are lucky a lot of cash left over to pad the reserves.