Wednesday, June 7, 2017
This video from 11 Alive shows just how not to enforce the rules in your HOA.
Remember to keep a level head and open mind when looking into covenant enforcement. It is not always this easy to tell when enforcing the rules in a community has crossed the line from enhancing the value of the homes, over to angering the residents and attracting negative attention.
at 7:01 PM
Friday, March 24, 2017
Last post, we discussed H. B. 410, a bill that would have led to higher HOA and Condo dues all across Georgia. Recently, the bill was defeated! We want to offer a heartfelt thank you and congratulations to all of our friends, volunteers, and colleagues who took action and let our Representatives in the state government know how they feel. They definitely got the message, and it was clear that they could not let this bill through.
To recap H. B. 410, this bill would have limited a number of the fees that HOAs and management companies charge a homeowner at closing. That includes the fees that a management company charges to process the closing, and also the fees that a community collects from the new homeowner at a closing. The bill passing would mean that Realtors who lobbied for the bill would not need to worry about those fees when selling a home. There's just one problem: those fees are vital to the communities.
Why does my HOA need those fees?
Your HOA or Condo Association is a not-for-profit corporation. All of the money that it collects is either being spent on the community, whether it is spent right away or is saved for later projects. That money has to come from somewhere. If those one-time fees are cut, then you can be sure that the annual or monthly assessments will go up to cover the difference.
These one-time fees, sometimes called "Initiation Fees" or "Capital Contribution Fees" are especially important for new communities. When a new community is being built, developers need money up front for everything from the pool and clubhouse to the roads and sidewalks. That money is not going to come quickly if there are only a dozen homes paying regular dues. Instead, these one-time fees for new homeowners help a developer succeed in completing the community. Later on, those funds support the maintenance of the amenities that keep property values high.
What about the management company? Why should HMS get to charge a fee?
It's no secret that HMS will have a problem if this bill passes, but we are in the same situation as the community. You aren't going to find a line-up of luxury cars, fancy suits, and expensive business events in the management company industry. (Our parties usually involve a potluck lunch in our warehouse.) The money that we charge is goes toward providing all of the relevant services to the closing attorneys, Realtors, and the buyer and seller themselves. Providing correct, up-to-date documents and details takes time, and time equals money.
In fact, the monthly management fees in the Atlanta area are 30% lower than the national average! That is the business model that has come from a free market where the Boards and the management companies negotiate terms themselves. The government stepping in to regulate our work does not make it any cheaper for us. Just like our communities, if the expenses stay the same and the closing fees go down, then that money has to come from somewhere. In the case of HMS and all of our competitors in Georgia, higher monthly management fees would have to make up for it.
So, what difference does the bill really make?
If management companies raise their monthly fees to make up the difference, and HOAs raise dues to make up the difference, then the people who suffer are the ones who live in the community. Everyone would have to pay for a service that only benefits the person selling their home. That's the one person who is leaving the community! We think that it's better for this money stay with the HOA and the people who benefit from it.
We might see a similar bill get proposed next year. But if we do, you can be sure that HMS will spread the word.
at 6:26 PM
Wednesday, February 22, 2017
The Georgia State legislature is currently considering legislation, H. B. 410, that will stop communities from being able to control what fees they charge when a home sells in the community. As it stands now, many communities collect a Capital Contribution Fee, or Initiation Fee, that goes towards maintaining the existing amenities in the community, including the pool, landscaping, and clubhouse.
Nobody Wants to Pay More, But is the Bill Really That Bad?
The Capital Contribution Fee (or Initiation Fee) a new homeowner pays to a community are a major source of funding to developers and builders as they are building a new community. Limiting this kind of fee will lead to developers taking their business and jobs out of Georgia when building a new neighborhood.
These fees are determined and established by the people who develop new communities or by the volunteers of the HOA. They are most familiar with the expenses of running these communities. By letting the government, instead of the communities, set these fees for everyone, it hurts those communities that may already be struggling by limiting how they can collect funds. Remember that these are Not-For-Profit Corporations, not some greedy company that takes homeowner money and gives it to the volunteers and service providers.
Limiting the fees that pay for these services just means that the cost for them has to come from somewhere else: the communities' costs will still be the same. This bill would cause everyone in an Association to pay for a service only benefits the seller of the home, the one who is leaving the community. The new homeowner joining the community will still have higher dues to look forward to.
When someone is paying all of the fees associated with buying a new home, the fee to their HOA are lower than the ones to their realtor, mortgage insurance, or title insurance. If the government's goal is to lower costs, then we should try and get those bigger costs in check. Cutting the small amount of funds that are actually going to stay in the community is not the right way to lower costs when buying a home. On the other hand, if limiting those sounds like the government having too much influence on the real estate market, then I would ask that you consider H. B. 410 the same way.
How Do We Stop Our Dues From Increasing?
As you can see, this bill misses the mark in a lot of big ways, but there is something that we can do about it. We all need to contact our representatives on the House Judiciary Committee and respectfully ask that they oppose H. B. 410. If we all speak up and explain on our grievances calmly and rationally, we can help ensure that living in a community Association in the enjoyable and rewarding experience that it should be.
Contact Details for each member of the House Judiciary Committee:
Rep. Andrew Welch
Rep. Barry Fleming
Rep. Beth Beskin
Rep. Dale Rutledge
Rep. David Dreyer
Rep. Jay Powell
Rep. Johnnie Caldwell
Rep. Mary Margaret Oliver
Rep. Meagan Hanson
Rep. Pamela Stephenson
Rep. Randy Nix
Rep. Rich Golick
Rep. Roger Bruce
Rep. Scott Holcomb
Rep. Stacey Evans
Rep. Trey Kelley
Rep. Wendell Willard
at 3:29 PM
Thursday, August 8, 2013
at 11:17 AM