Questions about costs for HOA

4 Replies

Is anyone familiar with costs for a HOA? I'm curious what insurance, landscaping maintenance and other normal costs should cost? My HOA has some crazy high costs for things that I don't believe cost that much. Example $4000 a year for telephone service, $42,000 a year for insurance, etc.

You can get quotes from other providers. Tell them the # of units, type of service, etc.

$42k means nothing without the facts, history of claims, age of construction, size of property, type of use, etc.

@Kieran Donahue Hi Kieran, I’m a director in my neighborhood’s HOA, and my advice here is to really take the time and take a look at the books. I’m not sure how large your HOA is, but I know that for mine those costs would be way out of line. Then again, we are relatively small. In looking at the books, I’d pay close attention to any time there’s a sudden increase in cost. Most of the time, such increases are legitimate (e.g. increased natural gas cost for heating a swimming pool). Sometimes, though, there may be something shady going on, especially if the dramatic cost increase comes from switching to some new vendor. As far as controlling costs goes, I like to have our management company get 2-3 bids from local vendors. Most of the time, there’s one vendor who is way out of line, while the other two are close. Good luck, and I hope you’re able to save a few bucks!
@Kieran Donahue Hi Kieran, I’m a director in my neighborhood’s HOA, and my advice here is to really take the time and take a look at the books. I’m not sure how large your HOA is, but I know that for mine those costs would be way out of line. Then again, we are relatively small. In looking at the books, I’d pay close attention to any time there’s a sudden increase in cost. Most of the time, such increases are legitimate (e.g. increased natural gas cost for heating a swimming pool). Sometimes, though, there may be something shady going on, especially if the dramatic cost increase comes from switching to some new vendor. As far as controlling costs goes, I like to have our management company get 2-3 bids from local vendors. Most of the time, there’s one vendor who is way out of line, while the other two are close. Good luck, and I hope you’re able to save a few bucks!

@KieranDonahue I can see you list yourself as an investor, not a property manager so I can only assume from what you asked that you are looking at the books for an investment property you own and pay homeowners dues on. So from that premise, I would actually need more information to give you any good advice. I have been a home owner in a HOA for over 30 years where we have 35 properties. It is a ski resort area so we have a lot of snow in the winter. The HOA pays for snow removal on the main roads, not driveways. It also does weed abatement along the roads, road repair as needed and maintains the well that servers the 35 homes including sprinklered areas. Those dues have gone from about $110 to $210 over the 30 year time frame and the HOA maintains a healthy balance in case of emergency. But when we originally paved the roads, there was a large assessment based on the number of lineal feet your property had along the road. So there can be charges for capital improvements during your ownership. You should plan for that.

I also owned a home in the Palm Springs area. There were around 500 homes in our HOA. The HOA maintained the outside of the homes, the gardens, the lawn, the pools and hot tubs, of which there were many. It also carried insurance coverage for common areas and pools and hot tubs which covered injury, accidental death, errors and omissions. I do not know what that policy cost but our dues were $755 per month and I believe that they have gone up since we sold the home. There were several club houses on the property which also sported a tennis facility and golf club. The association took care of those grounds as well, but to use those facilities, you had to have a membership in addition to paying HOA dues.

I did not mean to be long winded, but each HOA is different and has different needs. It also depends on who the home owners elect to their board of directors and how those board members see what is needed by the Association. So my best recommendation is that you contact a board member and set up a meeting to discuss your concerns. Most boards of larger areas meet regularly, and you could also attend one or more of those meetings. I would recommend that you send your questions to them in writing so that it is clear what you are looking to achieve. You will get better results that way, I think. Good Luck.

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