HOA fees are killing me

[Dan Grossman]

I own a couple small commercial properties in a mixed used building in the SOMA area of San Francisco. The top two floors of the building are apartments and the bottom floors are four commercial spaces, I own two (850 sq/ft each). The monthly HOA fees are north of $1,000 AND they charged a special assessment fee to fix the outdated fire alarm system for almost $9,000 in September. The worst part about it is my tenants in the commercial spaces don't get the advantages of the residential residents, such as use of the parking garage (there is very limited street parking in SOMA), the fob remote system to enter the apartment building (which always seem to break), etc. So for 2022 I will have paid OVER $20,000 in HOA fees, but for what? Water?

I have written the board members of the HOA and haven't heard a response. I have contacted the other two commercial property owners in the building and one is on board to create a separate HOA just for the commercial spaces but the other owner is reluctant to do anything (I think he is a member of the HOA board). On top of everything they announced a raise in HOA fees to $1,200 for 2023!

Should I hire a lawyer? The other owner who wants to start the commercial HOA says if all commercial tenants agree to separate from the building HOA they can start their own, but the other owner is not on board. How can I go about trying to reduce my HOA fee and solving this issue of paying for a service I don't receive?

Thanks for any advice you can give.

Best,

Dan

[Chris Seveney]

@Dan Grossman

Basically you are fighting an uphill battle and not only paying for mismanagement now but from years prior. Sounds like board did not have adequate reserves for special assessment and now potentially looking to put money away for rainy day funds. This is very common in HOA's and depending on building (ie if it has elevators, parking garage etc) those costs are not ridiculous

[Dan Grossman]

I understand they need to have reserves, but my tenants don't use the elevator because they are all on the ground floor. They don't use the garage because they are not residents. They don't use the fob keys because they have their own entrances to their shops and have no need to go into the main building. That is the problem. The HOA charges ridiculously high fees for services my tenants don't benefit from. That is what I would like to put a stop to. But thank you Chris for your reply.

[Theresa Harris]

With any building there will be amenities that some people use and others don't , especially in a mixed use building. How much where the HOA fees increase for the residential tenants? Often it is a percentage, but in a mixed use building this can be a problem. I'd ask for a meeting with the board. You should at a minimum have annual meetings where the board is elected, why not try to get on the board?

[Dan Grossman]

That's a great idea Theresa.  I previously had ignored board related issues, but I won't anymore.  I will look into what the percentage increase is as well per residential unit.  Thank you.

[Bruce Woodruff]

Did you know about these fees before you bought? Or did they just spring them on you lately? Not the special assessment, but the $1000+ monthly ones...?