How do city decide HOA due on a newly built townhome/condo ?

Asked by Aria, Mallard Cove, Carrollton, TX Tue Mar 15, 2011

I recently visited Fioli san ramon and their HOA's are pretty high?Any reason why they are high comparing other communities ?

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Steve Curtis, Agent, Walnut Creek, CA
Wed Mar 16, 2011
When a complex is new the developer must submit EVERYTHING for review and approval by the City ... including an estimate of the costs needed to pay for all current expenses and an estimate of the costs for all future costs (which are pro-rated and placed in a RESERVES ACCOUNT). By law these reserves are reviewed by a neutral outside party periodically to assure that the HOA has funded the reserves adequately.

To assure the potential buyers like yourself that these funds are adequate over the long term the City probably stipulated that once they approved the initial amounts for the HOA dues that the developer could not go in and adjust them until a new Independent Reserve Study was completed ... which is apparently scheduled for Novemeber 0f 2011 judging by your statement. ... This entire process came about because for years developers would set their dues really low and then turn over the association to the homeowners who discovered that there weren't enough funds being collected to pay for even ordinary expenses let alone major maintainance. If the dues are higher than comparable nearby associations, then check to see what is included and what the finish material of the structures are (Generally stucco and tile roofs will have lower maintainance costs than wood siding and comp roofs... and shingle siding will be the highest) ... some HOA's pull out the insurance and have that as an annual assessment but even if it is included there could be wide variations based on what the policy says and what the Board of Directors stipulates will be included. As to Mello - Roos (brought up by on of the other responders, tht cost is part of the property taxes and can be a significant factor in your costs but not your association dues (in some instnaces you could have annual taxes go up by over 0.5% of the sales price due to Mello-Roos)

Hope this helps

Steve Curtis
DRE # 350257
Broker / Owner
Windermere
2 votes
fiolibuyer, Home Buyer, San Ramon, CA
Thu Mar 17, 2011
Hi,
I live in Fioli.
The houses have been handed over to buyers last november/december.
New HOA directors were elected recently.
Most of them have promised to lower the HOA dues.

Overall it could go down maximum by $50.
Not sure but there is a huge booklet explaining all the charges.
I have not seen other communities but most are around 220$ or above.
Fioli is $300.
0 votes
John Arendsen, Agent, Leucadia, CA
Tue Mar 15, 2011
I'm still curious about the Mello Roos issue. Please enlighten me.
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Mar 15, 2011
HOA depends on amenities the community offers to the residence. Best compare to other properties, exactly what is covered in HOA dues

Example: Insurance, water, and etc.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Aria, Home Buyer, Mallard Cove, Carrollton, TX
Tue Mar 15, 2011
Thanks for all your answers.But i was told by the sellers agent that until November 2011 the HOA dues cannot be changed as it was set by the city by law. So it was quite confusing why would the city do ? Other than pool and hot tub Fioli doesnt have any other facilities like gym r club house.
0 votes
John Arendsen, Agent, Leucadia, CA
Tue Mar 15, 2011
I haven't heard anyone discuss Mello Roos. Could this be a possible issue? Just posing the question. I don't know anything about the area but I'm a little curious myself.
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Tue Mar 15, 2011
Hello Aria,

The HOA fees are determined by the complexes, not the city. Fioli is a bit high but they offer just a little bit more then others.
0 votes
Vickie Nagy, Agent, San Ramon, CA
Tue Mar 15, 2011
Hello Aria,

The city does not determine HOA fees, the developer makes the initial cost estimate. Then when the builder/developer moves on and the HOA board voted into office by residents takes over the HOA fee decisions.

High HOA fees can be a good thing! For many complexes it means that there are ample cash reserves being put aside for future repairs as the faciliites age (to avoid those nasty, nasty special assessments that come when the HOA does not have funds for repairs.)

However, in Fioli I would say they go one step further as to the cost. The building insurance is included and I think it's wall to wall and I have been told that it also include earthquake insurance. I can't validate that. You'll need to do your due diligence when reviewing the HOA docs and insurance cert with your insurer. However, I will tell you that I owned a condo that did not include earthquake insurance and I paid $60 extra dollars out of pocket every month for my earthquake insurance.

My advice: look to the HOA documents, or have the seller's agent tell you what the fees actually include.

Kindest Regards,
Vickie Nagy
0 votes
Suzanne Look…, Agent, Lafayette, CA
Tue Mar 15, 2011
You can look at the HOA documents once you are in contract, but generally newer communities have up front expenses and they are factored into the dues. Perhaps you can consider another development? There are many desireable ones in the area.
Regards,
Suzanne Looker
Web Reference:  http://www.suzannelooker.com
0 votes
Amy, , San Ramon, CA
Tue Mar 15, 2011
Hi Aria
I hope this isn't duplicate! The builder does not have control of foil anymore. I worked for a builder for a long time and when communities have a hot tub, HOA's are usually much higher. Does Fioli have one, if I remember correctly yes? There is a great community near by that i can tell you about-no gain fore- just info! Let me know via email....
0 votes
Amy, , San Ramon, CA
Tue Mar 15, 2011
Hi Aria
The builder only controls the HOA until they are done building- which at Fioli, they are. I believe Fioli has a hot tub? If so, that can impact your HOA dues. There is a comparable community in the area with no hot tub and much less HOA's. I can tell you about it if you'd like- just email me!
0 votes
Brian LeBars, Mortgage Broker Or Lender, Pleasanton, CA
Tue Mar 15, 2011
Hi Aria. I could be wrong but the builder is the one who projects the community and insurance costs as well as the reserves of the project and not the city. Im sure someone qualified with a building background will answer as well.

I do agree HOAs need to be computed in your monthly housing expense and factored in your budget. This may guide you to a diffident area. Are you working with an agent?
Web Reference:  http://www.loansquawk.com
0 votes
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