HOAleader.com - Tip of the Week - February 15, 2019
Published: Fri, 02/15/19
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Sweet! A New Way for Condos and HOAs to Make More Money (or Not)
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In this week's tip, we find out whether new fees we're seeing are a new get-rich-quick plan for condos and HOAs--and whether you're even allowed to charge them in the first place.
What we've been seeing has various names, such as a "new-owner fee," "a working contribution fee," or a "capital contribution fee."
You may be thinking we're talking about an impact fee, but that's something different than what we're now seeing.
An impact fee is one that's charged by a local government on a new development to cover the cost of providing infrastructure to the new development. Developers typically either directly or indirectly pass those fees onto buyers in the new development.
This is different. This is a fee that's charged every time a unit or home sells, even if it's 20 years after a developer has completed a development and turned control over to homeowners.
That distinction is important.
"I've seen this, but only when it's a fee charged by the developer," says Alessandra Stivelman, a partner who specializes in community association law at Eisinger Brown Lewis Frankel & Chaiet in Hollywood, Fla. "When you first purchase from the developer, this is charged so you ensure there's enough working capital, and it's usually in an amount of a few months of assessments.
"Once an owner purchases, Florida statute chapter 718, which governs condos, prohibits a charge in connection with the sale unless the association has permission to approve owners who purchase in the association, and that fee is limited to $100," adds Stivelman. "If you're a condo, you can't impose this every time there's a new owner. Under Chapter 720, which governs HOAs, you can do this. You just can't do this for condos."
In Ohio, this is something Bob Kmiecik, a partner at Kaman & Cusimano LLC, which represents associations throughout Ohio, has seen only when the governing documents permit it. But even then, Kmiecik has concerns.
Read about them—along with one of our California expert's challenges with this type of fee—in our new article:
https://www.hoaleader.com/members/3864.cfm
Best regards,
Matt Humphrey
President
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Upcoming Event
How to Handle the Growing Challenges of Service and Emotional Support Animals
What HOA and Condo Association Boards Can Do — without Triggering Costly Legal Trouble
Thursday, February 28, 2019
2:00 p.m. Eastern
An Exclusive HOAleader.com Webinar
With Practical Tips for Condo and HOA Boards
Learn more or register now:
https://www.hoaleader.com/products/challenges-service-emotional-support-animals-a.cfm
Members save $30!
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Recent articles posted at HOAleader.com:
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Sweet! A New Way for Condos and HOAs to Make More Money (or Not)
In this week's tip, we find out whether new fees we're seeing are a new get-rich-quick plan for condos and HOAs--and whether you're even allowed to charge them in the first place.
Click here to read full article:
https://www.hoaleader.com/members/Sweet-New-Way-for-Condos-HOAs-Make-More-Money-or-Not.cfm
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It's Time to Begin Charging Condo/HOA a Capital Contribution or New-Owner Fee (or Not)
We've been seeing this new type of HOA fee batted about online. It's got various names, such as a "new-owner fee," "a working contribution fee," or a "capital contribution fee."
Click here to read full article:
https://www.hoaleader.com/members/Its-Time-Begin-Charging-CondoHOA-Capital-Contribution-or-NewOwner-Fee-or-Not.cfm
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Does Your Condo/HOA Need to Begin Preparing for an Economic Slowdown?
In this week's tip, we ask you to think back to what could be a painful time for many of you. What was the state of your condo or HOA about 10 years ago, when the U.S. economy imploded, sending foreclosures skyrocketing? Odds are, your association wrote off a lot of bad debt then, meaning your leaders decided they had no shot at recovering fees the condo or HOA was due.
Click here to read full article:
https://www.hoaleader.com/public/Does-Your-CondoHOA-Need-Begin-Preparing-for-Economic-Slowdown.cfm
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The Economy Is Quirky: Should You Adjust Your Condo/HOA Budget's Bad Debt Line Item?
A growing number of economic gurus are now saying the U.S. economy won't be as strong this year as it was in 2018--with some even predicting a recession this year or next.
Click here to read full article:
https://www.hoaleader.com/members/Economy-Quirky-Should-You-Adjust-Your-CondoHOA-Budgets-Bad-Debt-Line-Item.cfm
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This Is Why It's Smart for Condo/HOA Boards to Use Cloud Storage
An HOAleader.com reader asks, "How do you get a previous board member to return documents that belong to the association when they will not respond to oral or written requests from the board? Is there a legal precedent or process to follow?"
Click here to read full article:
https://www.hoaleader.com/members/This-Why-Its-Smart-for-CondoHOA-Boards-Use-Cloud-Storage.cfm
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Special Report Download
HOA Management Companies:
A Practical Guide for Homeowners Association Boards
With a great HOA management company, your homeowners association will flourish. With a weak one, your association will struggle. Without one, you need to be a jack of all trades--and an informed one at that.
It's not easy finding the best HOA management company you can afford. You need one that fits your association's lifestyle and members' needs. You also need to be sure you're paying "the going rate" or better, instead of being nickel-and-dimed to death. Once you've nailed down those two tasks, you need to be sure your contract with your HOA management contract memorializes the promises the management company made to you during the bidding process and protects your association from surprises. Finally, you need to know how to handle an HOA management company that's not meeting its responsibilities.
In this exclusive HOA management special report, we offer insight and guidance on every one of these issues—and many more. We provide tips on finding a good property manager and determining whether you need an onsite manager, must-have and must-not-have contract language, and tips for responding when your management company isn't doing its job, including guidance on when to cut ties or work toward a better relationship.
Members can download the report now:
https://www.hoaleader.com/public/HOA-Management-Companies-A-Practical-Guide-for-Homeowners-Association-Boards.cfm
Not a member yet? Start your trial membership, and download your copy today:
https://www.hoaleader.com/details.cfm
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