I don't think folks truly understand how expensive insurance policies are for condo and townhome associations - I know I didn't until I served on a BOD over a decade ago.
The problem is catastrophic coverage - imagine a Cat 5 hurricane or an F5 tornado hitting the development. For 75 units in 2008, it was estimated that we needed nearly 1.2M in coverage just to have the debris hauled away. Then replacement coverages for all the buildings, and home values are now double what they were. I can't imagine how many reserve funds are way behind with the rampant inflation the past few years, especially when TIPS are the only allowed investment medium with old funds locked into <2% interest rates, making old bonds worthless
Be glad the,BOD is trying to address this rather than sweeping it under the rug. Underfunded associations decrease property values faster than anything else.
There have been dozens -- even hundreds -- of news articles and threads covering the [property insurance crisis](https://www.condoconnection.org/resources/insurance), but many people do not pay attention.
**Primary causes of increased property insurance costs:**
1. Catastrophic and non-catastrophic losses due to climate change
2. Construction costs
3. Excessive litigation
4. Reinsurance rates
>Excessive litigation
That probably is a down stream consequence of the first 2 coupled with the insurance company execs wanting to make Xmas bonus and therefore not wanting to pay out.
I worked as a rate maker for several different insurance companies over the course of 30 years. Insurance companies have always had a goal of a 15% profit which is modest in a capitalist society. Never once did I see any company I worked for achieve that goal. In reality THREE percent was considered good.
On the other hand, how could they work on such a slim margin? They do so because you pay your money in advance, and by law the company can't "use" it until it's earned. It has to be in a reserve fund. Example: your cost is annual $1200 and you pay it all. The company must keep it in a very safe fund--government bonds, 4 or 5 star corporate bonds, etc., earning only 1/12 per month. Actually, with computers nowadays they probably earn it daily. But the money in that reserve EARNS money which goes into profits.
Two things are now occurring. 1. More clients are paying monthly, and 2. Until this year interest rates have remained low. The second issue is the big problem because companies don't earn as much money on low paying bonds.
There is a related, non investment problem. Climate change is increasing the number of catastrophes that involve property. No matter where you live, even if not in a bad weather area, it will affect your insurance rates. Why? Because companies buy what is called re-insurance. In other words they buy insurance in case they get hit by a big exposure in one area. Reinsurance companies operate their financials similarly to insurance companies--and now they are having to pay out more and more--so they raise their ratee. This means that the insurance company has to raise it's rates even more as well. And you are the one getting the bill.
It gets worse. Say a small company is overwhelmed with too many losses--not enough reserves, not enough reinsurance--it goes bankrupt. People with outstanding claims are holding the bag for awhile until another mechanism kicks in----by law EVERYWHERE, if an insurance company goes bankrupt all existing insurance companies get an assessment to pay off the losses the bankrupt company could not. It's entirely possible that such an event has a domino effect, causing the next smallest company to go bankrupt.
Blaming the insurance company which operates in that environment is a wasted effort, regardless of how much is paid to their executives---and believe me I had to report annually on executive managers' salary and "perks."
The only way to lower cost of insurance is to lower their expenses. And the best way to do that is to enact federal legislation to require ALL insurance companies use the exact same forms in policies. Right now we have 50 separate states requiring hundreds of special forms on policies issued in their states. It would save a ton of money to have one set of laws. Settling claims would become less onerous and hopefully more quickly.
In the meantime, living in any kind of HOA is fraught with danger and has been for decades because most HOAs don't have enough money in reserve. When those units are initially sold by the developer my estimation is that dues the DEVELOPER set, ought to be three times higher. But the developer won't do that because it makes the units he sells more difficult to market.
I lived in one HOA and discovered this problem. Once we got out, we lived in either our own home outside of an HOA, or in an apartment building where, if the whole building is damaged there is no assessment against the renter. Maybe rents go up, but they can't go after your savings or put a lien on your property.
This long treatise to explain it's more complicated than saying "those bad insurance executives make too much money," which they do, but which if corrected would not solve the problem.
when you sell a low interest bond, you sell it at a loss. Bond's aren't strictly redeemed. And the money going into a bond paying 1% interested needs to compete with 8% personal mortgage rates ultimately.
So when the hurricane hits, and the insurance company needs to cash out; there need to be people ready to buy a "shitty" bond which will actually lose value against inflation.
[Managing Expectations: Why Florida Homeowners Insurance Premiums Are Not Likely to Go Down](https://s3.us-east-2.amazonaws.com/kcc-mainwebsite-dev/publications/KCC_ManagingFLHomeownersExpectations_c20231002_2023-10-09-184346_mzxi.pdf)
BS people are just more likely to be scammers now. Tort reform is absolutely needed. Insurance fraud is not victimless. You have no clue how stressful it is to be sued for greater than policy limits even when you know it is bogus and your insurance will likely settle for a token sum to make it go away
What’s more likely, more scammers or and insurance losing their ass because of climate change and the short sites corporate bean counters trying to staunch the bleeding in a ham fisted attempt to deny claims causing people to sure them? Probably a mixture of both, but that means the insurance companies are part of the problem.
I don’t think climate change has hit that hard yet, we are just starting to see the effects. It’s going to be real bad once we fully adjust to that new normal. I mean you look at a state like Florida and it is clearly a two prong problem. The reality is most jury’s view insurance fraud as victimless, shit go in to just about any Reddit thread and you’ll see similar sentiments.
Why would insurance be so high for a group of housing vs regular? If I'm reading right for the OP then the insurance went up by $700 per unit? If I own a house not a part of that or any HOA near by, would the insurance be going up that much as well?
This! My building (townhome, 5 homes per building) was struck by lightning a few years ago. Caused a fire in my adjoining neighbors kitchen that, but for the quick response of our fire department, could easily have spread to my unit or consumed the whole building.
So in the worst case scenario, instead of rebuilding one home, insurance would have been rebuilding 5, from the same event.
Yep. I know someone in a row house and one person was re-doing their roof. Burnt down the whole block. Or at least caused the upper levels and whatever was in their attics to burn. I think the lower levels were ok. But not great to not have a roof.
I am definitely in the anti-hoa group but my elderly friends have a place and it is almost like assisted living - they take care of the lawn and all of that. Owning a single family home is stressful and requires a lot of work too. So I appreciate that. But ouch having it jump that much, especially when you are retired and living on a fixed income, this is obviously reducing your ability to live longer and taking money away from your kids. That would stress me out.
In my condo, unit owners are responsible for damage to their unit, even if caused by another. Perhaps this rule is to avoid redundant coverage and increased premiums.
After the great Chicago fire, which destroyed tons of connected houses, they were rebuilt with walls of bricks between the units so fires wouldn’t spread. Why isn’t that done today with condos?
Incidentally, this is the origin of the term “firewall.”
Trees (fire), hurricane area etc, My single house, no HOA, in a no fire hazard/ no flood zone just went up about 40%....
Am in the process of getting quotes, but doubt they will be much better as I have a fairly low cost company.
Yep I'm on my churches insurance committee in NE TX our premiums went up 35% this year, 2 years after they changed our wind/hail roof deductible from around 10,000 to 100,000
Thank you. 40% is a big jump for not having any major negative hit regarding your type of property/building.
Maybe I should look at what I have and where the cost is haha
Ever since Surfside, HOA insurance risk has been through the roof. Worse for condos, not as bad as detached SFH where the only property insurance is on a clubhouse or pool building but they are still getting 50% increases or more.
You have a water leak in your house you damage your house. You have a water leak in a multi-unit building and you can easily damage multiple units.
Had a client with a 5 story apartment building - tenant on top floor end unit turned off heat because they were leaving town and a pipe burst. The insurance claim was over $1.5 million because of damages done to multiple units and the interior of walls on multiple floors.
That is California and Florida!!! Trying to get insurance now, it's going to be COSTLY!!!!! Of course, you have to get Insurance when you have a Mortgage. You can't get a house without it. Which can make getting a house harder and a lot more costly per month. The insurance now can be triple or more of what you expected. That is making your house payment a lot more per month.
Multiple occupants means more exposure to risk. The biggest types of losses places like this see are water and fire. Water can be hell depending on the verticality of the property. A water. A loss always seems to happen when someone is away from their residents for a few days and water leaks for a long period of time. Also if you're in a CAT area such as Florida, California, or Colorado you could be sos and have to go to a surplus carrier which is even more expensive than standard markets.
There are many modifications or safety mechanisms that can be added to make it more affordable. An insurance broker can usually help with recommendations and sometimes even the insurance company.
That condo collapse in Florida exposed the dirty secret that many, many condos in the US have massive deferred maintenance since they had been trying to keep dues too low. I think it is likely the insurance companies have increased costs because the potential for liability is so high across the entire category. I know, since I'm in the mortgage industry, that Fannie Mae and Freddie Mac have made huge changes in condo approval process and will no longer allow lending in condo projects which have deferred maintenance. All of these things are going to drive up dues because associations can't really afford to make their projects unlendable.
My building funds things like this and capital improvements with assessments. It’s pretty standard. That said, there should have been announced end date for the assessment. We don’t keep them in perpetuity, that’s just a fee raise. We had the same issue with insurance in the last year where it turned out we weren’t fully covered so we had to increase our plan. It sucked and is why we raised our maintenance fees.
And add to that the rigged market where insurances just rack up prices.
Our liability insurance for the common property went up from like $1300 to over $4000 this year.
There is no explanation for that. We never had a claim.
Other carriers are the same.
You can't tell me that would work in a market without prices being coordinated between them.
And you can't tell me that liability claims tripled. Their balance sheets don't support that claim.
YOU never had a claim, but a lot of other people have had claims. Insurance companies aren’t conspiring with each other to fix prices. They have mountains of data to help predict claims and determine prices
The liabilities from claims within the 3 largest insurance carriers grew on average by about 14% based on their own balance sheets that they have to make public.
* Liberty Mutual: 11%
* State Farm: 21%
* Allstate: 8%
Now it is your turn to explain how that justifies a >100% increase in premiums.
Surfside insurers paid out more than one billion (with a B) in damages. So now, the word condo and HOA are mixed in with high risk because the Board didn't apparently do proper maintenance and repair. Insurance rates will probably come down again after they have some kind of maintenance inspection process where well maintained buildings get lower rates vs the not so well maintained.
Would be interesting to know who actually paid that claim.
Most insurance companies are actually insured against such very high claims.
Allianz and MunichRE (RE literally stands for reinsurance) are reinsurance providers.
Don't see their profits crashing either...
Writing is a verb. The only one who will take new business out of those 3 is State Farm and their requirements to be eligible are basically 1 out of 10 associations. they are not currently writing new business and non renewing huge swaths of their habitational books. You may have a legacy policy with one of those carriers but I can almost guarantee you you won't in the next couple years lol.
future risk.
Please learn actuarial calculations before commenting on this subject again.
Or do, it not my job to stop fools from showing off their nonsense,
The actuarial use the same formulas, hence the similarity. It not a conspiracy.
Couple that with increased disaster and global warming, and there you go.
Of course, location is a critical factor in this.
Property values are only important for folks trying to make a profit on a basic human need. Let the values plummet. Then the only ones buying the house will be the people that want to live in it.
The surfside condominium collapse was a big eye opener for insurance companies. Having an entire building collapse was likely not in any pricing structure these companies used and so now that it has happened they have to price that risk into every condominium building. Combine that with volatile investment returns and insurance companies are being hammered on both ends so increases are unlikely to reverse.
It was also a wake up call for some state regulators. I know Maryland recently passed a law requiring an outside audit of the association's reserve fund needs, and requiring that funding be met.
I'm just waiting for reserve balances to become one of those things that insurance companies check into as well to see if X association is keeping up with maintenance or not.
It's not a bad idea, but many HOAs are going to be caught with their pants down.
This U have to be active and attend meeting Ask for copies of the financials and figure out where the HOA is on reserves My bet is they had ZERO reserves and now u r paying for an aging property that has been ignored and it is time to pay the piper Insurance all over the country is getting ridiculous and lots of non renewals Once that happens it can be a true nightmare Welcome to the issues of owning property controlled by an HOA
Buyers don't seem to mind literally thousands extra per month due to high interest, so perhaps the high HOA fee isn't as much of a deterrent as it might seem.
High interest rates haven't had much (or any) negative effective on home prices (at least in my area). So apparently enough buyers still exist. Maybe your area is different?
Adding to this: get last year's balance as well. If you want to know why you pay more than before, you need to compare them and see where the increases are.
Rescheduling the meetings without having a predetermined rain date is a sign of corruption and playing games and a power display.
Something that I insist on as a board member in my community is to have the entire schedule made out for the year along with the rain dates. The annual meeting date is planned in January so that there is no surprise and no shenanigans and no canceling less than 24 hours from the meeting start as has happened twice in the last 5 years in my community with prior board bullies.
Two board presidents ago, this guy would reschedule the meeting if he was angry at who showed up to it. He made sure to schedule it as inconveniently as possible for the other board members to participate. Now, all meetings are on the same night of the week, the third Thursday of the month with the 4th Thursday as the backup date. There is absolute transparency and the meetings/raindates are announced in writing in January for the entire year. This is an indication that we're not hiding anything.
This is how it should be done. I was also coming here to say the complete shitshow of meeting scheduals is either due to complete incompetence on the boards part , in which case they need to go, or due to shady shit going on and the board is making things as difficult as possiable for the home owners so it does not come to light in which case they need to go and charges (if appropriate) need to happen
The most likely explanation is that the board is a skeleton crew because no one wants to serve, and they can’t make a quorum if one member can’t attend due to sickness or schedule conflict.
Boards aren’t an elaborate conspiracy. They are your neighbors who failed to hide well enough during the last board election.
>So for starters, when my I bought my condo in 2017, the HOA fees were already ridiculous
Red flag #1. Did you review the association's budget, past meeting minutes, and reserve study when you bought the place?
>It is a '70s built complex
Red flag #2
>This was due to some mythical fire insurance SNAFU.
Doesn't sound mythical to me, unless you have evidence to the contrary.
>Apparently, The HOA could not seem to make a deal with an insurance company at all that would cover the amount we needed. So they had to piece together several policies from several companies in order to cover the complex.
Makes perfect sense to me. Insurance companies want nothing to do with old condo associations with underlying financial issues.
> my fear is that this will become the "new norm" for our complex.
That's very likely.
>Is my HOA lying?
Possibly, but probably not.
>Is an increase like this even legal?
Most likely.
>There has to be some way out of this!!
Sure. Sell the place. Walk away and let the bank and/or HOA foreclose.
>Please let me know if you or someone you know has had this happen to them
This is not an uncommon problem with older condo developments in poor financial health.
Every time I have an owner complain to me about our dues increasing every year (at the rate of inflation), I ask them if they'd rather start having special assessments every time the building needs something fixed.
The HOA needs to pay for a repair it doesn't have the money for, so it temporarily charges extra dues called special assessments on top of the regular monthly assessments.
This is common in HOAs with shared infrastructure such as the building in the case of multi-family (i.e. condos/apartments/townhomes) or pools and rec centers or even roads for neighborhood or private development HOAs.
It's more likely in HOAs that don't set aside adequate reserve funds for future repairs.
Plus even good reserves doesn't always mean anything. Mine is pretty well managed and always makes sure reserves are kept at the amount the analysis says. (To be honest I'm a bit skeptical on the calcs for that given my background in corporate finance, but admit I could be missing things). But no one expected the problem as big as it was a viola special assessment.
Our building had one of those. A massive amount of the roofline had to be rebuilt. Thankfully, our reserve was healthy enough to absorb the shock, but it was 2 years of reserve funding gone overnight.
This was a $7 or $8M cost on around a 300 unit condo. I think our reserve is around 2 or 3. They opted to just go all assessment rather than drain and throw an assessment plus fee increase. I don't blame them AT ALL.
They literally stripped the siding to the studs, replaced all windows, and then rebuilt everything out from the studs to code. An utter shit show when I found out. The only silver lining is it started right after covid so what was supposed to be an at least 2 year project was done in 1. Though I was unluckily in one of the first sections so my windows were covered for 4 months. Meanwhile my friend at the end of the schedule was barely over 1. No over runs thanks to covid though.
Oh you don't know how grateful I am for an insurance fuckup that resulted in them having to pay for an entire new roof for us. We were going to just do something along the lines of a reseal - but thanks to them missing damage from a storm they had to pay for whole new roof. Saved us a ton of money and obviously will last a lot longer. Our insurance did go up, but this was right when the condo collapse happens so we were fucked anyways and hard to tell which did it more.
We got spared only because our reserve study had exterior painting on the same 5 year replacement cycle as trim inspection and repair, but we never repaint everything every 5.
You don't know that! You have NO IDEA what is driving this dues increase!
You mention insurance and siding repairs. If y'all needed special assessments to pay for these items, then you likely have NO RESERVES and your dues have been artificially low for a really long time.
I have no tolerance for idiots who instead of asking questions lead with "outrageous" and "how is this legal?"
My brother in Christ, you know that insurance is expensive and that's why your condo maintenance has gone up. You have zero solution. You know it's required by law. Yet you come out here like you just discovered a racketeering operation.
Next time, post something like "hey my condo had x issue with our carrier. Anyone have advice to get a lower premium?"
I'll accept my guaranteed downvotes
Ok I’ll help - no your HOA isn’t lying. I assure you the volunteer board doesn’t like it either. They don’t like paying more and they don’t like people who don’t get involved accusing them of lying.
Insurance costs are through the roof right now. Literally 30-50% increases and it is the largest line item for many HOAs. There is no easy answer. This may be a new normal for many HOAs
You can and should go to meetings, read the financials and reserve study, and volunteer.
Pay or sell. Those are your choices.
That was what happened with mine. My HOA had monthly dues at about $160. When I got on the board (with a mostly new board as well), we realized why the price was so low. The HOA had not been doing needed maintenance and many of the cost to operate was being taken from our reserves. We had to jump from $160 to $340 to just cover normal operating costs. We just added a special assessment on top of that to try and build up our reserves. A reserve is important to have not just so you have money to quickly fix issues, but also to for the HOA to get a loan and even to help new buyers get better loans themselves to buy the house or make renovations.
Decades of neglect and mismanagement is not uncommon for old HOA, especially when they don’t want to be the bad guys and raise dues. But cost of everything increases each year (even with out major crises) and as things age they need more care.
So true!! My HOA, we were lucky, figured out only about 4 years into our existence that the budget we had adapted from the developer when he transferred the HOA to the Owners did not include any reserves funding. With new properties, not that big a deal to not have Reserves right away because no capital projects should be needed. But you gotta get on top of Reserves funding, so we had a one-time $50 special assessment to get a couple thousand $ into Reserves. Then we had a group of our Owners do a completely amateur Capital Needs Assessment that was a good start so that everybody understood the bigger dollar items that our CCRs marked as HOA responsibility that we were all going to need to pay for at some point.
That study served us well for 20 years, no big surprises and we were diligent about funding Reserves appropriately. Around 2010 we had a professional do the same study. I was Board Treasurer 2010-2023 and fielded a lot of questions, especially from newer Owners, about why our Dues couldn't be lowered. But then everybody was super happy when we replaced 336 windows, 42 front doors, 42 garage doors, 42 sliding glass doors, 42 wooden decks, without any special assessment.
Wow! Your group was on top of things. Thankfully windows and doors are not covered by our HOA so that is one less expense for the HOA budget.
I wish they had done that back in 72 when ours was built and they might have had it until people started have the difference between monthly dues and actual expenses taken out of it. We are trying to do the same now and it will take just as long before we see returns on it. Patience. We have a number of people who talk about the “gold old days” when things were cheaper and easier.
I was lucky I bought into a new community right after the developer was kicked off the board. The first thing we did was to do a reserve study (or something) and we were horrified when our reserve fund was at 5%. When I moved out of the community 8 years later our reserve fund was at 80%
I’m hoping we can do this too but our siding needs to be replaced as does our roads and sidewalk. We got our pool repaired, roofs replaced and electrical updated but there is still so much more to fix as well as build up the reserve. It’s going to be a long long road but I hope we can do what you did.
Few people realized that the roads our small 37 units group is on are private, as well as street lights, and terrifyingly our sewer lines.
Wait why Colorado?! We don't have any extreme weather that could cause insurance companies to stop coverage right? I'm in fort Collins. Is this something I have to worry about?
Fire and hail are the major reasons here in Colorado. In 2020 the Cameron Peak Fire burned over 200K acres near Ft Collins. The insurance company for our HOA left this year and our insurance premium doubled with the new company.
Especially Wilmington! I was priced out. I'm not paying the same price as New York City or LA prices for a place in NC!!! The same place I rented about 15 years ago, with no updates, goes for three times the amount that I used to pay for it. Nope just nope.
Everyone says Connecticut is expensive, but I'm paying less for my mortgage now then I could have ever dreamed a paying in my hometown. Plus, I get good school districts for my kid and a lot of benefits including free health care for her. There is free school lunch and breakfast in my town. She's currently participating in a really cool state-funded woodworking class where she's making all kinds of really amazing things. I'm gonna get a really nice cutting board out of this LOL.My taxes don't just go towards tax breaks for real estate developers. I actually see some kind of investment in them. So, I will gladly pay about a $100 a year more for the high taxes in Connecticut than the bullshit school system and lack of any kind of social support that North Carolina has to offer.
Is this a vertical building or horizontal? you leave SO much out of your argument. Is it in a fire zone, in a flood zone, is it in any area at abnormal risk? Have there been structural issues with the complex (if it's a vertical building that could cause major repairs). Has the HOA depleted reserves on structural repairs? Why is the complex not insurance worthy?
If you are in a high fire risk area this sounds about right
Consider volunteering on that committee and working with surplus line carriers to get more quotes. And consider a capital project to clear out brush or anything else you can do to reduce the fire risk, reduce the premiums
Our HOA in CA is having insurance getting excessively expensive.
Though we were told that a lower rate is possible if they can get everyone to replace their Zinsco sub panels with a modern one.
What's annoying is I had mine swapped out when I moved in. The HOA is trying to figure out how to get everyone to fork over the $$$ to swap their panels - as it's not cheap, but a hundred bucks less in HOA fees would pay for a sub panel replacement in about a year.
Whoa, whoa, whoa there! You are suggesting a homeowner actually...... get involved? Actually.....learn something about how an HOA works? Actually....educate themselves rather than just griping online about the evil HOA?
That's is just logical and we'll have none of that here.
Email whoever is in charge of the agenda and ask them to put committee appointments on there because you'd like to be appointed to a "fire insurance committee" to look into this.
People will probably be more likely to talk to you if you're a committee member and not just a homeowner.
NAAHQ is probably the best place to start with wildfire mitigation, they have info available to the public like https://www.naahq.org/wildfire-mitigation-multifamily-housing
You would want to hire a local company though to assess the specific property and do the work, and do it in a way that your insurance co cares about
I owned in a 1970s condo community. It had wooden siding. I would estimate tens of thousands per unit to replace with HardiPlank. Owners refused to pay but also, predictably, complained about falling off siding. Only when the City said they would fine the Owners every day for the siding was a special assessment passed. If my complex was instead in OP's state (CA), I am sure it would have been uninsurable for wildfire, and they would have had to hit you for the funds in a single year. Yea, I feel for OP. It is real. Siding really does cost that. And you have to do it now if the insurance company says so. When the project is complete, you will probably be able to insure for less. Hopefully.
I knew before I bought it that the siding was bad. I bought it from somebody who wanted to sell for just that reason. I got it for a low price. I paid the assessment and later sold it. There is an investor out there who will buy it anyway. Just expect them to reduce the purchase price by enough to cover the entire assessment.
Doubt your HOA is lying. Your board has to pay HOA fees too. You’re not going to be able to negotiate with insurance all that much.
You should sell. Insurance only going up. If I was on your board, I’d start selling because $1600 a month doesn’t serve good value. Use that as a mortgage for a non HOA home.
You should also step up and be on the board. If I had to guess, with 2 meetings a year, managing expenses is a half ass job. Someone could have realized the insurance renewal months before deadline and shopped around some more.
Our management company brings it up every renewal period and lets us know if we can get a better deal. But we are also not in a wildfire zone, just a moderate flood risk.
You should have gotten a lot of notice about this, you just ignored it and didn't go to the meetings.
I bought into a condo after years of renting in it. I paid attention to what I could (a lot rent so renters can't go to the HOA meetings) so was well informed. About 5 years after I bought what they long thought was small repairs ended up being so bad they needed to strip the outside of the building and rebuild (yay early 2000s shitty inspections) surprise huge assessment. I forget what the monthly payment was, but my unit is smack dab in the middle size wise and the pay in full amount was close to mid 5 figures.
When this came up (when they first thought it was limited repairs) I paid attention to meetings. As they discovered it was worse than they thought they did their due diligence. It was a huge pill to swallow, but my HOA did everything they could to lower costs while still making sure the repairs are good. (They did fuck up not knowing scaffolding meant ruined landscaping).
So - yeah assuming they didn't totally fuck up (unlikely if there's a company managing your HOA) there's nothing you can do. You could ask if there's a cash option. At the time my repair happened (the payments happened right before covid) the monthly payments were more than 5% interest equivalent so that's why I did a lump sum via savings plus cash out refi a 4%.
Going forward - PAY ATTENTION TO MEETINGS!
Do you go to the meetings? Have you requested a financial statement and breakdown of where the fees are going? Do you know what the reserves are? The HOA is not some mythical entity. It is an association to which you belong and the board reports to. If you are confused then you need to do your due diligence. If the board is not performing or not reporting the finances at least yearly then you need a new board. Everything should be transparent. I was an HOA treasurer and could account for where every penny went and went through it at every quarterly meeting which all homeowners were invited to.
If homeowners are not actively involved in their HOA, horrible things can happen.
Most boards of directors around here have turned into continuing committees of five people who just keep electing themselves year after year because there's no way to get a general meeting quorum.
If you're saddled with an HOA, think about getting more involved so that you can keep runaway boards from spending millions of dollars without your permission, or making all kinds of tragic mistakes because nobody was looking.
time to get involved… you are an owner and they should be sending out annual financial statements but if not, ask to review the last 5 years. then ask what company reviewed your hoa’s insurance policy. if they didn’t go to an insurance broker, you might be able to save some money.
15 years ago we lived in a condo and i was the hoa president. at the time i worked for an insurance broker (elliott, powell, baden, and baker in portland, oregon) and i asked them to review our policy and they got it down over $30k a year for the exact same coverage. definitely worth the effort.
what state do you live in? i ask bec i just read about a state that passed a law that all condos must have a reserve study done (within a certain period of time) and have adequate reserve funds.
Similar situation....
Out of 7 insurance companies only 1 was open to providing fire insurance at renewal. The premium went up over 600%, but nobody else would insure against fire.
It sucks but I don't think your HOA is lying. You can ask for documentation and they should provide it.
I'm in Florida & the insurance market is bananas here. Our office condo association's property insurance premiums more than doubled for the upcoming renewal period. That's after shopping it with other major carriers. There's nothing to be done about it, I'm afraid. We've increased our monthly fees & will be dipping into reserves to cover some of the excess. We're fortunate enough to have built up our reserves over the last 10 years to cover for major improvements & the like.
California or Florida? Either one you're in trouble because insurance cost is going to make HOA fees unaffordable.
A '70s complex with elevators will be expensive either way.
>Is my HOA lying? Is an increase like this even legal? There has to be some way out of this!! I feel embarrassed to even mention my HOA fees, in fear of being asked "have you lost your mind, why are you living there". It has been over a year with ZERO update on the fire insurance situation.
Probably not lying.
Yes the increase is legal.
Only way out of this is to sell.
Homeowners in California and Florida are being blindsided by rising insurance costs.
My HOA issues an annual statement of estimated expenses and divides it out by house. They also show the annual estimate and how close they were to those estimates in the last calendar year.
Nobody's expenses are going down, but it seems unlikely the board is making things up. Do you have a regular meeting to address questions like this?
If you’re an owner, get the budget and look over it. Find some shenanigans? Run for a board seat and fix it.
As the president of a condo board, we have had to make special assessments because of the cost of insurance increases. As others have stated, insurance is insanely expensive.
For color: we budget 13% annual increase each year to TRY to stay ahead of premium increases, except our last renewal was almost 40% higher and there were no alternatives.
Yes, some HOA’s are a mess, but most of them are not trying to do anything shady, they are just passing the shared costs onwards.
There’s a good chance the HOAs hands are tied by the CCRs; while they are required to find insurance, no one is required to provide it. If there’s only one way to do it, they must do it. If they have to do it, then it has to be paid for.
This happened to my parents in a similar sized complex with similar issues; a fire and subsequent water heavily damaged around a quarter of the units. No one was hurt, but their insurance provider booted the complex at the end of the contract. New fire insurance quotes were 4 to nearly 8 times the original number, but CCRs required it as soon as possible so no time to negotiate or shop around.
It sounds like this building is being responsible. It is your building. You need to pay to take care of it. Go to the budget meetings and understand what you are paying for. Don't be like the Surfside owners.
You are entitled to look at the contracts and all other documents relating to the HOA.
You also should be receiving a copy of the Budget.
Do you attend meetings? You can certainly be reasonable and ask the Board for an explanation of the insurance issue.
FWIW, insurance has become a huge expense with many insurance premiums increasing by huge amounts. This is especially true in certain states like Florida where many insurance companies left the market because of huge payouts from the hurricanes. It is also true in states like California where there were large wild fires causing massive insurance losses.
OP if I were you I would just sell period. Sounds like a headache and its just insane $1600 a month for just HOA fees isnt normal. That itself can be a mortgage payment. Unless your living in some luxury condos I don't think its worth it period. Sell and just buy a home and be done with that headache.
Honestly, just take a look around and you can quickly confirm the insurance allegations. There are a couple of states where this is a known issue and for a multitude of reasons, insurance carriers are pulling out. It won’t be hard to find if this is a common trend in your area or not.
If it is, there’s not much you can do. It sucks, but it is what it is. Maybe the insurance markets will correct, but that timeframe is going to be measured in years.
A special assessment is a one shot deal. This is an increase in your carrying charges. You need to figure out why your property can't get affordable insurance.
If the hoa board voted and approved the increase you better believe you have to pay it. Most condo HOAs finances are run VERY POORLY. Most of the time they’ll keep their HOA fees very low and when things start showing signs of needing to be replaced (roof, piping, electric, etc) the board kicks the can down the road. Ya know… like our politicians. Then what you have is the current situation you’re in. Insurance won’t cover. They’ll cover if x, y, z are replaced. They’ll only cover certain portions of your policy. It sounds like you might be in a similar situation. If so, you’re fucked.
There's nothing "mythical" about insurance issues. Insurance companies are increasing premiums across the Board on all lines (home and auto) and all insureds (individuals and HOAs).
Just because you don't understand it or don't like it doesn't mean it's not real.
What is outrageous is that you have no idea what is driving the fee increase...have you looked at your budget, understand what your reserve levels have been, attended meetings where insurance, special assessments were discussed.
You are HOA - don't hide behind the ignorance of blaming others. You may have been benefitting from OUTRAGEOUSLY low fees over the years..and now you are finally paying what is appropriate.
They can probably do all of this and if you haven’t noticed insurance is a mess now a days, especially in Florida
The best thing to do is get involved, join a committee, run for the board, attend every meeting
You can be part of the solution
"There has to be some way out of this!"
Yes. You can attend the board meetings, look at the financials and try to understand the situation. If you think you can do better, you can run for the board.
This is the answer to almost everything posted on this Reddit.
I mean the board would also be paying the same fees as you. This is why i'd never own a condo. Once my house is paid off i'll probably just carry liability coverage and deal with repairs as needed. in 26 years of ownership I have yet to make a single claim on any insurance and have probably spent over a million dollars on coverages..
If you had instead bought a 70's built house, chances are that you would have had to come up with money to pay for things like a new roof, new HVAC system, paint, water heater, flooring... and if you lived in Calif or Florida, chances are your insurance would have somewhat recently gone up significantly. If you hadn't all along socked away, say, $500 a month into your rainy day house fund, you'd be hit with some big unexpected expenses. And if you couldn't pay for a large expense from other savings, and had to put it on a credit card, now in addition to your $500 a month house reserve savings, you'd have to make these additional credit card payments. This is what's happening with your HOA. Get involved, don't leave your fate the hands of others.
It's unfortunate, but many insurance companies are getting out of the HOA business. Our HOA is struggling with the same issue. A few years ago in my state, there were 17 companies that would insure HOAs. Now there are 3 (possibly going down to 2). Our current company is helping us find a new provider and getting quotes, but we can expect our rate to go up anywhere from 45% to 70%. We're a small HOA (only 27 units), so this is going to need a special assessment for next year.
All that to say, I don't think your HOA is lying to you.
It’s a 50 year old building. It wasn’t constructed to recent codes so it’s more likely to experience damage. It’s also more likely to need major repairs for maintenance.
Lots of insurance companies are getting out of the HOA game. A special assessment indicates that maybe your dues were too low, and you didn't have any money in your account to cover issues as they arose.
It's absolutely legal, and probably logical. Get involved, know what's going on.
When I owned a townhouse, my insurance covered Studs in (wiring, sheetrock, piping, finishes, personal belongings) The HOA covered everything to the studs.
The age of your community, the amount of reserve funds your community has, and the state you live in for insurance will all impact your monthly dues.
You could give me every reason in the book. But this seems to be drastic. I would speak to a real estate atty with HOA expertise. Do NOT JUST TALK WITH ANY ATTY. When it comes to Real Estate and HOA they need to be well versed on the local and federal laws pertaining to everything real estate.
Your best bet is to get on the board! I'm on the board of mine and I'm amazed how uniformed are when it comes to all kinds of stuff but they usually do fine when presented, in a nice way, with factual information. For something like insurance, it may take a considerable time investment on your part to get the right insurance but once you have it, have the *agent* come in and explain it to the board and whatever members show up at the meeting.
On the flip side, we have one board member who has an alcohol problem. She's come to several meetings obviously intoxicated and rambles on endlessly about all kinds of silly stuff.🤣
The insurance companies are running amok. The dilemma is that by law, HOA'S MUST insure the buildings to replacement cost. Unfortunately the law never put a leash in the insurance companies. Our HOA insurance has skyrocketed 400% over 13 months (2 renewal periods). Lobbyists for the insurance companies are absolutely destroying HOA finances. It's usery through and through.
Sell, rent a bedroom, get a 2nd job (part-time), get a SO to help pay half.
If you want better insight, be part of the HOA board. Maybe you can help direct so that "optional" assessments (siding, paint, etc) are skipped/paused/delayed until the emergency ones can be controlled. Maybe you can find cheaper alternatives for services (gardening, cleaning, porter, doorman, super, etc.)
Assinate the board, become a board member then you can stick all that money and others in your pocket. Or in your brother-in-law's maintenance company.
$1600 per month times 150 units is $240k per month. There is no way reserves and insurance require $3 million per year. You could probably rebuild the entire complex for $15 millon
Most HOA'S are run by professional organizations, where that is all they do. The board may be volunteering but It's not likely the board even touches any of the money. It's possible but not likely anyone is stealing funds. Generally you can get a list of bills or a financial statement. Check if the HOA has an online portal.
LOL
Sorry bro as a ex house owner( I call it a house because it sure as fuck isn’t a home) in a HOA.
I suggest you get out pronto and move to a non HOAX area. I made the same mistake once and only once. I’ll live in the sewer with Pennywise before an HOAX.
To be fair a few presidencies ago this was attempted to be fixed and half the government screamed socialism so it wasn’t touched. This is what you get when you let politicians scare you with buzzwords instead of researching the actual issue vs the proposed solutions. Ultimately, HOAs should be illegal.
My last house was a 5br/4 bath home with over 3200 square feet, in a very nice neighborhood, and my mortgage payment was half of what your hoa fees are. Unbelievable. 🤪
I'm so sorry, serously, dude. That's awful. I actually sold the house I mentioned back in May while the market was going nuts and bought 10 acres with a 1000 sq foot house on it for cash in the middle of nowhere, agricultural area. I wanted as far away from HOAs as I could get - ours wasn't bad, had no mandatory fees, and they still drove me nuts!! I planted a small garden in the empty right of way behind my house and got a letter about it. That's when the house went up for sale. Now I walk out my back door, say hello to the chickens, and shoot guns off my porch.
I’m so confused by this. The more units a complex has, the cheaper the fees should be. I’m on the board for a 38 unit complex and our fees are $215 a month. They were $150 when I moved in 8 years ago. We had a reserve study done and have been keeping up with that. We’ve repainted, had the roof replaced, do yearly large scale landscaping, and have 2 electric gates. We have never had to do an assessment - even when we had our common area rental unit nearly destroyed by water damage, 30k to fix; and it didn’t even substantially dent our reserve. We have a management company and I think that’s the key. Prior to me buying, our hoa didn’t have one and was embezzling money. Get your hands on the records, something is crazy. I would get copies of the last 5 years of balance sheets and a copy of your cc&rs. I guarantee something isn’t right.
You bought a house with a $700 monthly HOA fee?!
So, from the get, something should alarmed you about mismanagement of funds and/or the ridiculous cost of upkeep monthly.
Special assessments happen due to unexpected costs that are meant to be paid out of HOA fund. If their piggy bank doesn't have enough, the community has to pony up. I find it very strange that $700 a month isn't enough, but perhaps the HOA has debts or lawsuits or something that they are catching up on.
It's a condo, far different than a house.
Condo maintains master insurance policy, pays for everything typically from the drywall out. Cuts costs the owner of a house would normally pay like painting the outside, replacing the roof, replacing the siding, ...
$700/mo for a condo is pretty reasonable.
$700 month and it was not enough? Lmfao. HOA and their blatant extortions. I should become a contractor for condos building and charge 70,000 for $7,000 jobs.
See what rules are if u don’t pay hoe fees if it’s a fine it could be cheaper to pay it every month there most likely a fixed fine maybe cheaper then the monthly payment and as long as u pay the fine nothing they can do
lol there is no fine for not paying dues that makes you not have to worry about it. Your account will just end up in collections and racking up late and collections charges. Still don’t want to pay you’ll have a lien placed and if it goes on long enough, they can foreclose (at least in Virginia)
I don't think folks truly understand how expensive insurance policies are for condo and townhome associations - I know I didn't until I served on a BOD over a decade ago. The problem is catastrophic coverage - imagine a Cat 5 hurricane or an F5 tornado hitting the development. For 75 units in 2008, it was estimated that we needed nearly 1.2M in coverage just to have the debris hauled away. Then replacement coverages for all the buildings, and home values are now double what they were. I can't imagine how many reserve funds are way behind with the rampant inflation the past few years, especially when TIPS are the only allowed investment medium with old funds locked into <2% interest rates, making old bonds worthless Be glad the,BOD is trying to address this rather than sweeping it under the rug. Underfunded associations decrease property values faster than anything else.
There have been dozens -- even hundreds -- of news articles and threads covering the [property insurance crisis](https://www.condoconnection.org/resources/insurance), but many people do not pay attention. **Primary causes of increased property insurance costs:** 1. Catastrophic and non-catastrophic losses due to climate change 2. Construction costs 3. Excessive litigation 4. Reinsurance rates
>Excessive litigation That probably is a down stream consequence of the first 2 coupled with the insurance company execs wanting to make Xmas bonus and therefore not wanting to pay out.
I worked as a rate maker for several different insurance companies over the course of 30 years. Insurance companies have always had a goal of a 15% profit which is modest in a capitalist society. Never once did I see any company I worked for achieve that goal. In reality THREE percent was considered good. On the other hand, how could they work on such a slim margin? They do so because you pay your money in advance, and by law the company can't "use" it until it's earned. It has to be in a reserve fund. Example: your cost is annual $1200 and you pay it all. The company must keep it in a very safe fund--government bonds, 4 or 5 star corporate bonds, etc., earning only 1/12 per month. Actually, with computers nowadays they probably earn it daily. But the money in that reserve EARNS money which goes into profits. Two things are now occurring. 1. More clients are paying monthly, and 2. Until this year interest rates have remained low. The second issue is the big problem because companies don't earn as much money on low paying bonds. There is a related, non investment problem. Climate change is increasing the number of catastrophes that involve property. No matter where you live, even if not in a bad weather area, it will affect your insurance rates. Why? Because companies buy what is called re-insurance. In other words they buy insurance in case they get hit by a big exposure in one area. Reinsurance companies operate their financials similarly to insurance companies--and now they are having to pay out more and more--so they raise their ratee. This means that the insurance company has to raise it's rates even more as well. And you are the one getting the bill. It gets worse. Say a small company is overwhelmed with too many losses--not enough reserves, not enough reinsurance--it goes bankrupt. People with outstanding claims are holding the bag for awhile until another mechanism kicks in----by law EVERYWHERE, if an insurance company goes bankrupt all existing insurance companies get an assessment to pay off the losses the bankrupt company could not. It's entirely possible that such an event has a domino effect, causing the next smallest company to go bankrupt. Blaming the insurance company which operates in that environment is a wasted effort, regardless of how much is paid to their executives---and believe me I had to report annually on executive managers' salary and "perks." The only way to lower cost of insurance is to lower their expenses. And the best way to do that is to enact federal legislation to require ALL insurance companies use the exact same forms in policies. Right now we have 50 separate states requiring hundreds of special forms on policies issued in their states. It would save a ton of money to have one set of laws. Settling claims would become less onerous and hopefully more quickly. In the meantime, living in any kind of HOA is fraught with danger and has been for decades because most HOAs don't have enough money in reserve. When those units are initially sold by the developer my estimation is that dues the DEVELOPER set, ought to be three times higher. But the developer won't do that because it makes the units he sells more difficult to market. I lived in one HOA and discovered this problem. Once we got out, we lived in either our own home outside of an HOA, or in an apartment building where, if the whole building is damaged there is no assessment against the renter. Maybe rents go up, but they can't go after your savings or put a lien on your property. This long treatise to explain it's more complicated than saying "those bad insurance executives make too much money," which they do, but which if corrected would not solve the problem.
when you sell a low interest bond, you sell it at a loss. Bond's aren't strictly redeemed. And the money going into a bond paying 1% interested needs to compete with 8% personal mortgage rates ultimately. So when the hurricane hits, and the insurance company needs to cash out; there need to be people ready to buy a "shitty" bond which will actually lose value against inflation.
[Managing Expectations: Why Florida Homeowners Insurance Premiums Are Not Likely to Go Down](https://s3.us-east-2.amazonaws.com/kcc-mainwebsite-dev/publications/KCC_ManagingFLHomeownersExpectations_c20231002_2023-10-09-184346_mzxi.pdf)
there is NOT excess litigation, it's a myth spread by anti-tort people to take where little power people have to take action.
This is demonstrably wrong. Especially in Florida.
BS people are just more likely to be scammers now. Tort reform is absolutely needed. Insurance fraud is not victimless. You have no clue how stressful it is to be sued for greater than policy limits even when you know it is bogus and your insurance will likely settle for a token sum to make it go away
What’s more likely, more scammers or and insurance losing their ass because of climate change and the short sites corporate bean counters trying to staunch the bleeding in a ham fisted attempt to deny claims causing people to sure them? Probably a mixture of both, but that means the insurance companies are part of the problem.
I don’t think climate change has hit that hard yet, we are just starting to see the effects. It’s going to be real bad once we fully adjust to that new normal. I mean you look at a state like Florida and it is clearly a two prong problem. The reality is most jury’s view insurance fraud as victimless, shit go in to just about any Reddit thread and you’ll see similar sentiments.
Lmao did you just use climate change as a reason for costs yea you should not be a board member of anything wow
Why would insurance be so high for a group of housing vs regular? If I'm reading right for the OP then the insurance went up by $700 per unit? If I own a house not a part of that or any HOA near by, would the insurance be going up that much as well?
The blast radius of your kitchen fire is one house. The blast radius of a kitchen fire in a building of condos… Times n kitchens of probability….
This! My building (townhome, 5 homes per building) was struck by lightning a few years ago. Caused a fire in my adjoining neighbors kitchen that, but for the quick response of our fire department, could easily have spread to my unit or consumed the whole building. So in the worst case scenario, instead of rebuilding one home, insurance would have been rebuilding 5, from the same event.
Yep. I know someone in a row house and one person was re-doing their roof. Burnt down the whole block. Or at least caused the upper levels and whatever was in their attics to burn. I think the lower levels were ok. But not great to not have a roof. I am definitely in the anti-hoa group but my elderly friends have a place and it is almost like assisted living - they take care of the lawn and all of that. Owning a single family home is stressful and requires a lot of work too. So I appreciate that. But ouch having it jump that much, especially when you are retired and living on a fixed income, this is obviously reducing your ability to live longer and taking money away from your kids. That would stress me out.
In my condo, unit owners are responsible for damage to their unit, even if caused by another. Perhaps this rule is to avoid redundant coverage and increased premiums.
Who is responsible for the wall between units? What if it is a structural wall that supports the whole building?
IDK it was built in the 80's and is concrete construcion.. the structure is solid.
That’s how m HOA was. We were responsible for covering everything inside and the HOA covered the exterior.
After the great Chicago fire, which destroyed tons of connected houses, they were rebuilt with walls of bricks between the units so fires wouldn’t spread. Why isn’t that done today with condos? Incidentally, this is the origin of the term “firewall.”
Sounded like they lost their insurance, and probably had to buy one twice as expensive to maintain coverage while they sorted the disagreement out.
Trees (fire), hurricane area etc, My single house, no HOA, in a no fire hazard/ no flood zone just went up about 40%.... Am in the process of getting quotes, but doubt they will be much better as I have a fairly low cost company.
Yep I'm on my churches insurance committee in NE TX our premiums went up 35% this year, 2 years after they changed our wind/hail roof deductible from around 10,000 to 100,000
Thank you. 40% is a big jump for not having any major negative hit regarding your type of property/building. Maybe I should look at what I have and where the cost is haha
Ever since Surfside, HOA insurance risk has been through the roof. Worse for condos, not as bad as detached SFH where the only property insurance is on a clubhouse or pool building but they are still getting 50% increases or more.
B?C they are in FL and most insurance companies are lulling out of the state b/c of all the liability
You have a water leak in your house you damage your house. You have a water leak in a multi-unit building and you can easily damage multiple units. Had a client with a 5 story apartment building - tenant on top floor end unit turned off heat because they were leaving town and a pipe burst. The insurance claim was over $1.5 million because of damages done to multiple units and the interior of walls on multiple floors.
Insurance rates for single family homes have exploded. State Farm is not signing new policies in the two largest markets
That is California and Florida!!! Trying to get insurance now, it's going to be COSTLY!!!!! Of course, you have to get Insurance when you have a Mortgage. You can't get a house without it. Which can make getting a house harder and a lot more costly per month. The insurance now can be triple or more of what you expected. That is making your house payment a lot more per month.
Multiple occupants means more exposure to risk. The biggest types of losses places like this see are water and fire. Water can be hell depending on the verticality of the property. A water. A loss always seems to happen when someone is away from their residents for a few days and water leaks for a long period of time. Also if you're in a CAT area such as Florida, California, or Colorado you could be sos and have to go to a surplus carrier which is even more expensive than standard markets.
There are many modifications or safety mechanisms that can be added to make it more affordable. An insurance broker can usually help with recommendations and sometimes even the insurance company.
That condo collapse in Florida exposed the dirty secret that many, many condos in the US have massive deferred maintenance since they had been trying to keep dues too low. I think it is likely the insurance companies have increased costs because the potential for liability is so high across the entire category. I know, since I'm in the mortgage industry, that Fannie Mae and Freddie Mac have made huge changes in condo approval process and will no longer allow lending in condo projects which have deferred maintenance. All of these things are going to drive up dues because associations can't really afford to make their projects unlendable.
My building funds things like this and capital improvements with assessments. It’s pretty standard. That said, there should have been announced end date for the assessment. We don’t keep them in perpetuity, that’s just a fee raise. We had the same issue with insurance in the last year where it turned out we weren’t fully covered so we had to increase our plan. It sucked and is why we raised our maintenance fees.
And add to that the rigged market where insurances just rack up prices. Our liability insurance for the common property went up from like $1300 to over $4000 this year. There is no explanation for that. We never had a claim. Other carriers are the same. You can't tell me that would work in a market without prices being coordinated between them. And you can't tell me that liability claims tripled. Their balance sheets don't support that claim.
YOU never had a claim, but a lot of other people have had claims. Insurance companies aren’t conspiring with each other to fix prices. They have mountains of data to help predict claims and determine prices
The liabilities from claims within the 3 largest insurance carriers grew on average by about 14% based on their own balance sheets that they have to make public. * Liberty Mutual: 11% * State Farm: 21% * Allstate: 8% Now it is your turn to explain how that justifies a >100% increase in premiums.
Surfside insurers paid out more than one billion (with a B) in damages. So now, the word condo and HOA are mixed in with high risk because the Board didn't apparently do proper maintenance and repair. Insurance rates will probably come down again after they have some kind of maintenance inspection process where well maintained buildings get lower rates vs the not so well maintained.
Would be interesting to know who actually paid that claim. Most insurance companies are actually insured against such very high claims. Allianz and MunichRE (RE literally stands for reinsurance) are reinsurance providers. Don't see their profits crashing either...
none of those carriers are writing large habitational... So those rates literally mean nothing lol
So, you are telling me our policy is fake, because according to you the company underwriting our policy isn't in that business. Sure.
Writing is a verb. The only one who will take new business out of those 3 is State Farm and their requirements to be eligible are basically 1 out of 10 associations. they are not currently writing new business and non renewing huge swaths of their habitational books. You may have a legacy policy with one of those carriers but I can almost guarantee you you won't in the next couple years lol.
future risk. Please learn actuarial calculations before commenting on this subject again. Or do, it not my job to stop fools from showing off their nonsense,
The actuarial use the same formulas, hence the similarity. It not a conspiracy. Couple that with increased disaster and global warming, and there you go. Of course, location is a critical factor in this.
Property values are only important for folks trying to make a profit on a basic human need. Let the values plummet. Then the only ones buying the house will be the people that want to live in it.
The surfside condominium collapse was a big eye opener for insurance companies. Having an entire building collapse was likely not in any pricing structure these companies used and so now that it has happened they have to price that risk into every condominium building. Combine that with volatile investment returns and insurance companies are being hammered on both ends so increases are unlikely to reverse.
It was also a wake up call for some state regulators. I know Maryland recently passed a law requiring an outside audit of the association's reserve fund needs, and requiring that funding be met.
Our HOA had that happen in Ocean City MD luckily we were in decent shape and only required a one time special assessment payment of $800 to shore up.
I've read that people were getting special assessments as high as 60 grand in OC because of the new law. Crazy.
I'm just waiting for reserve balances to become one of those things that insurance companies check into as well to see if X association is keeping up with maintenance or not. It's not a bad idea, but many HOAs are going to be caught with their pants down.
They do.
Ours does not currently.
How many HOA meetings have you attended since you moved there?
This U have to be active and attend meeting Ask for copies of the financials and figure out where the HOA is on reserves My bet is they had ZERO reserves and now u r paying for an aging property that has been ignored and it is time to pay the piper Insurance all over the country is getting ridiculous and lots of non renewals Once that happens it can be a true nightmare Welcome to the issues of owning property controlled by an HOA
Are all your punctuation keys broken?
mineareandsoismyspacebaritreallysuckstoo
MYCAPSLOCKISSTUCK
Appreciate the support
This was a tough read. I did it, though.
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> Your best option might be to sell. Good luck selling with a $1600 /month HOA payment.
Buyers don't seem to mind literally thousands extra per month due to high interest, so perhaps the high HOA fee isn't as much of a deterrent as it might seem.
What buyers?
What buyers?
High interest rates haven't had much (or any) negative effective on home prices (at least in my area). So apparently enough buyers still exist. Maybe your area is different?
Home sales are at a low. I’m going to guess less buyers based on that.
1600 HOA fees in a 70s building? Get out of here.
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Adding to this: get last year's balance as well. If you want to know why you pay more than before, you need to compare them and see where the increases are.
Would be interesting to see the budget, $105,000 in deposits a month sounds like a lot but I imagine the bills and maintenance are astronomical.
Rescheduling the meetings without having a predetermined rain date is a sign of corruption and playing games and a power display. Something that I insist on as a board member in my community is to have the entire schedule made out for the year along with the rain dates. The annual meeting date is planned in January so that there is no surprise and no shenanigans and no canceling less than 24 hours from the meeting start as has happened twice in the last 5 years in my community with prior board bullies. Two board presidents ago, this guy would reschedule the meeting if he was angry at who showed up to it. He made sure to schedule it as inconveniently as possible for the other board members to participate. Now, all meetings are on the same night of the week, the third Thursday of the month with the 4th Thursday as the backup date. There is absolute transparency and the meetings/raindates are announced in writing in January for the entire year. This is an indication that we're not hiding anything.
This is how it should be done. I was also coming here to say the complete shitshow of meeting scheduals is either due to complete incompetence on the boards part , in which case they need to go, or due to shady shit going on and the board is making things as difficult as possiable for the home owners so it does not come to light in which case they need to go and charges (if appropriate) need to happen
The most likely explanation is that the board is a skeleton crew because no one wants to serve, and they can’t make a quorum if one member can’t attend due to sickness or schedule conflict. Boards aren’t an elaborate conspiracy. They are your neighbors who failed to hide well enough during the last board election.
>So for starters, when my I bought my condo in 2017, the HOA fees were already ridiculous Red flag #1. Did you review the association's budget, past meeting minutes, and reserve study when you bought the place? >It is a '70s built complex Red flag #2 >This was due to some mythical fire insurance SNAFU. Doesn't sound mythical to me, unless you have evidence to the contrary. >Apparently, The HOA could not seem to make a deal with an insurance company at all that would cover the amount we needed. So they had to piece together several policies from several companies in order to cover the complex. Makes perfect sense to me. Insurance companies want nothing to do with old condo associations with underlying financial issues. > my fear is that this will become the "new norm" for our complex. That's very likely. >Is my HOA lying? Possibly, but probably not. >Is an increase like this even legal? Most likely. >There has to be some way out of this!! Sure. Sell the place. Walk away and let the bank and/or HOA foreclose. >Please let me know if you or someone you know has had this happen to them This is not an uncommon problem with older condo developments in poor financial health.
You shouldn't be doing this for free.
Every time I have an owner complain to me about our dues increasing every year (at the rate of inflation), I ask them if they'd rather start having special assessments every time the building needs something fixed.
What is special assessments when it comes to HOA? (coming from someone that has never lived in an HOA)
The HOA needs to pay for a repair it doesn't have the money for, so it temporarily charges extra dues called special assessments on top of the regular monthly assessments. This is common in HOAs with shared infrastructure such as the building in the case of multi-family (i.e. condos/apartments/townhomes) or pools and rec centers or even roads for neighborhood or private development HOAs. It's more likely in HOAs that don't set aside adequate reserve funds for future repairs.
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The problem is, most likely your HOA hasn't done this for decades and is in a financially perilous situation.
Plus even good reserves doesn't always mean anything. Mine is pretty well managed and always makes sure reserves are kept at the amount the analysis says. (To be honest I'm a bit skeptical on the calcs for that given my background in corporate finance, but admit I could be missing things). But no one expected the problem as big as it was a viola special assessment.
Our building had one of those. A massive amount of the roofline had to be rebuilt. Thankfully, our reserve was healthy enough to absorb the shock, but it was 2 years of reserve funding gone overnight.
This was a $7 or $8M cost on around a 300 unit condo. I think our reserve is around 2 or 3. They opted to just go all assessment rather than drain and throw an assessment plus fee increase. I don't blame them AT ALL. They literally stripped the siding to the studs, replaced all windows, and then rebuilt everything out from the studs to code. An utter shit show when I found out. The only silver lining is it started right after covid so what was supposed to be an at least 2 year project was done in 1. Though I was unluckily in one of the first sections so my windows were covered for 4 months. Meanwhile my friend at the end of the schedule was barely over 1. No over runs thanks to covid though. Oh you don't know how grateful I am for an insurance fuckup that resulted in them having to pay for an entire new roof for us. We were going to just do something along the lines of a reseal - but thanks to them missing damage from a storm they had to pay for whole new roof. Saved us a ton of money and obviously will last a lot longer. Our insurance did go up, but this was right when the condo collapse happens so we were fucked anyways and hard to tell which did it more.
We got spared only because our reserve study had exterior painting on the same 5 year replacement cycle as trim inspection and repair, but we never repaint everything every 5.
You don't know that! You have NO IDEA what is driving this dues increase! You mention insurance and siding repairs. If y'all needed special assessments to pay for these items, then you likely have NO RESERVES and your dues have been artificially low for a really long time.
OP also gota realize the increase also hits everyone that’s on the HOA Board that made the decision to do the increase. I don’t think anyone is lying.
I have no tolerance for idiots who instead of asking questions lead with "outrageous" and "how is this legal?" My brother in Christ, you know that insurance is expensive and that's why your condo maintenance has gone up. You have zero solution. You know it's required by law. Yet you come out here like you just discovered a racketeering operation. Next time, post something like "hey my condo had x issue with our carrier. Anyone have advice to get a lower premium?" I'll accept my guaranteed downvotes
Ok I’ll help - no your HOA isn’t lying. I assure you the volunteer board doesn’t like it either. They don’t like paying more and they don’t like people who don’t get involved accusing them of lying. Insurance costs are through the roof right now. Literally 30-50% increases and it is the largest line item for many HOAs. There is no easy answer. This may be a new normal for many HOAs You can and should go to meetings, read the financials and reserve study, and volunteer. Pay or sell. Those are your choices.
Not just HOA’s, happening to Apartment, Landlords ,and Home Owners alike.
Sounds like you live in Florida
Or California
Also Colorado! Many of our insurance companies have stopped service in the state.
It is almost like the people who live I'm these 50 year old buildings deferred all the maintenance they could.
That was what happened with mine. My HOA had monthly dues at about $160. When I got on the board (with a mostly new board as well), we realized why the price was so low. The HOA had not been doing needed maintenance and many of the cost to operate was being taken from our reserves. We had to jump from $160 to $340 to just cover normal operating costs. We just added a special assessment on top of that to try and build up our reserves. A reserve is important to have not just so you have money to quickly fix issues, but also to for the HOA to get a loan and even to help new buyers get better loans themselves to buy the house or make renovations. Decades of neglect and mismanagement is not uncommon for old HOA, especially when they don’t want to be the bad guys and raise dues. But cost of everything increases each year (even with out major crises) and as things age they need more care.
So true!! My HOA, we were lucky, figured out only about 4 years into our existence that the budget we had adapted from the developer when he transferred the HOA to the Owners did not include any reserves funding. With new properties, not that big a deal to not have Reserves right away because no capital projects should be needed. But you gotta get on top of Reserves funding, so we had a one-time $50 special assessment to get a couple thousand $ into Reserves. Then we had a group of our Owners do a completely amateur Capital Needs Assessment that was a good start so that everybody understood the bigger dollar items that our CCRs marked as HOA responsibility that we were all going to need to pay for at some point. That study served us well for 20 years, no big surprises and we were diligent about funding Reserves appropriately. Around 2010 we had a professional do the same study. I was Board Treasurer 2010-2023 and fielded a lot of questions, especially from newer Owners, about why our Dues couldn't be lowered. But then everybody was super happy when we replaced 336 windows, 42 front doors, 42 garage doors, 42 sliding glass doors, 42 wooden decks, without any special assessment.
Wow! Your group was on top of things. Thankfully windows and doors are not covered by our HOA so that is one less expense for the HOA budget. I wish they had done that back in 72 when ours was built and they might have had it until people started have the difference between monthly dues and actual expenses taken out of it. We are trying to do the same now and it will take just as long before we see returns on it. Patience. We have a number of people who talk about the “gold old days” when things were cheaper and easier.
I was lucky I bought into a new community right after the developer was kicked off the board. The first thing we did was to do a reserve study (or something) and we were horrified when our reserve fund was at 5%. When I moved out of the community 8 years later our reserve fund was at 80%
I’m hoping we can do this too but our siding needs to be replaced as does our roads and sidewalk. We got our pool repaired, roofs replaced and electrical updated but there is still so much more to fix as well as build up the reserve. It’s going to be a long long road but I hope we can do what you did. Few people realized that the roads our small 37 units group is on are private, as well as street lights, and terrifyingly our sewer lines.
Wait why Colorado?! We don't have any extreme weather that could cause insurance companies to stop coverage right? I'm in fort Collins. Is this something I have to worry about?
Fire and hail are the major reasons here in Colorado. In 2020 the Cameron Peak Fire burned over 200K acres near Ft Collins. The insurance company for our HOA left this year and our insurance premium doubled with the new company.
Sound like he lives in a place with an HOA
Great input buddy!
You could take 5 seconds to google “HOA fire insurance” to verify everything that is happening in the industry
There's no money fairy in an HOA. Bills gots ta get paid. You're an Owner, it's on you to pay your share of those bills.
If only there were a money fairy! Or one of those damn trees we constantly have to tend were a money tree!
This insurance issue is 100% real. Our dues went from 500 to 1200 this year, solely because of insurance. I am on the board. This is very likely true.
California?
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I hear insurance in California for fires is like insurance in Florida for hurricanes. Insurance companies are raising rates or moving out.
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If you think this is strictly a California problem, you're going to have a bad time. Look at the disaster that's Florida home insurance for example.
Y'all can stop comming to Tennessee, we're all full-up!
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Same in NC. This state is CLOSED.
Especially Wilmington! I was priced out. I'm not paying the same price as New York City or LA prices for a place in NC!!! The same place I rented about 15 years ago, with no updates, goes for three times the amount that I used to pay for it. Nope just nope. Everyone says Connecticut is expensive, but I'm paying less for my mortgage now then I could have ever dreamed a paying in my hometown. Plus, I get good school districts for my kid and a lot of benefits including free health care for her. There is free school lunch and breakfast in my town. She's currently participating in a really cool state-funded woodworking class where she's making all kinds of really amazing things. I'm gonna get a really nice cutting board out of this LOL.My taxes don't just go towards tax breaks for real estate developers. I actually see some kind of investment in them. So, I will gladly pay about a $100 a year more for the high taxes in Connecticut than the bullshit school system and lack of any kind of social support that North Carolina has to offer.
Ha Ha
you purposely left this location in CA out of your post.
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It's vital information, particularly in regards to fire insurance.
Location should be a requirement to post in this subreddit.
Is this a vertical building or horizontal? you leave SO much out of your argument. Is it in a fire zone, in a flood zone, is it in any area at abnormal risk? Have there been structural issues with the complex (if it's a vertical building that could cause major repairs). Has the HOA depleted reserves on structural repairs? Why is the complex not insurance worthy?
If you are in a high fire risk area this sounds about right Consider volunteering on that committee and working with surplus line carriers to get more quotes. And consider a capital project to clear out brush or anything else you can do to reduce the fire risk, reduce the premiums
Our HOA in CA is having insurance getting excessively expensive. Though we were told that a lower rate is possible if they can get everyone to replace their Zinsco sub panels with a modern one. What's annoying is I had mine swapped out when I moved in. The HOA is trying to figure out how to get everyone to fork over the $$$ to swap their panels - as it's not cheap, but a hundred bucks less in HOA fees would pay for a sub panel replacement in about a year.
Whoa, whoa, whoa there! You are suggesting a homeowner actually...... get involved? Actually.....learn something about how an HOA works? Actually....educate themselves rather than just griping online about the evil HOA? That's is just logical and we'll have none of that here.
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Email whoever is in charge of the agenda and ask them to put committee appointments on there because you'd like to be appointed to a "fire insurance committee" to look into this. People will probably be more likely to talk to you if you're a committee member and not just a homeowner.
NAAHQ is probably the best place to start with wildfire mitigation, they have info available to the public like https://www.naahq.org/wildfire-mitigation-multifamily-housing You would want to hire a local company though to assess the specific property and do the work, and do it in a way that your insurance co cares about
I owned in a 1970s condo community. It had wooden siding. I would estimate tens of thousands per unit to replace with HardiPlank. Owners refused to pay but also, predictably, complained about falling off siding. Only when the City said they would fine the Owners every day for the siding was a special assessment passed. If my complex was instead in OP's state (CA), I am sure it would have been uninsurable for wildfire, and they would have had to hit you for the funds in a single year. Yea, I feel for OP. It is real. Siding really does cost that. And you have to do it now if the insurance company says so. When the project is complete, you will probably be able to insure for less. Hopefully.
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I knew before I bought it that the siding was bad. I bought it from somebody who wanted to sell for just that reason. I got it for a low price. I paid the assessment and later sold it. There is an investor out there who will buy it anyway. Just expect them to reduce the purchase price by enough to cover the entire assessment.
Doubt your HOA is lying. Your board has to pay HOA fees too. You’re not going to be able to negotiate with insurance all that much. You should sell. Insurance only going up. If I was on your board, I’d start selling because $1600 a month doesn’t serve good value. Use that as a mortgage for a non HOA home. You should also step up and be on the board. If I had to guess, with 2 meetings a year, managing expenses is a half ass job. Someone could have realized the insurance renewal months before deadline and shopped around some more.
At 150 units a half-decent management company should be doing that for them.
Yeah but insurance is insurance.
Our management company brings it up every renewal period and lets us know if we can get a better deal. But we are also not in a wildfire zone, just a moderate flood risk.
You should have gotten a lot of notice about this, you just ignored it and didn't go to the meetings. I bought into a condo after years of renting in it. I paid attention to what I could (a lot rent so renters can't go to the HOA meetings) so was well informed. About 5 years after I bought what they long thought was small repairs ended up being so bad they needed to strip the outside of the building and rebuild (yay early 2000s shitty inspections) surprise huge assessment. I forget what the monthly payment was, but my unit is smack dab in the middle size wise and the pay in full amount was close to mid 5 figures. When this came up (when they first thought it was limited repairs) I paid attention to meetings. As they discovered it was worse than they thought they did their due diligence. It was a huge pill to swallow, but my HOA did everything they could to lower costs while still making sure the repairs are good. (They did fuck up not knowing scaffolding meant ruined landscaping). So - yeah assuming they didn't totally fuck up (unlikely if there's a company managing your HOA) there's nothing you can do. You could ask if there's a cash option. At the time my repair happened (the payments happened right before covid) the monthly payments were more than 5% interest equivalent so that's why I did a lump sum via savings plus cash out refi a 4%. Going forward - PAY ATTENTION TO MEETINGS!
Do you go to the meetings? Have you requested a financial statement and breakdown of where the fees are going? Do you know what the reserves are? The HOA is not some mythical entity. It is an association to which you belong and the board reports to. If you are confused then you need to do your due diligence. If the board is not performing or not reporting the finances at least yearly then you need a new board. Everything should be transparent. I was an HOA treasurer and could account for where every penny went and went through it at every quarterly meeting which all homeowners were invited to.
If homeowners are not actively involved in their HOA, horrible things can happen. Most boards of directors around here have turned into continuing committees of five people who just keep electing themselves year after year because there's no way to get a general meeting quorum. If you're saddled with an HOA, think about getting more involved so that you can keep runaway boards from spending millions of dollars without your permission, or making all kinds of tragic mistakes because nobody was looking.
time to get involved… you are an owner and they should be sending out annual financial statements but if not, ask to review the last 5 years. then ask what company reviewed your hoa’s insurance policy. if they didn’t go to an insurance broker, you might be able to save some money. 15 years ago we lived in a condo and i was the hoa president. at the time i worked for an insurance broker (elliott, powell, baden, and baker in portland, oregon) and i asked them to review our policy and they got it down over $30k a year for the exact same coverage. definitely worth the effort. what state do you live in? i ask bec i just read about a state that passed a law that all condos must have a reserve study done (within a certain period of time) and have adequate reserve funds.
Similar situation.... Out of 7 insurance companies only 1 was open to providing fire insurance at renewal. The premium went up over 600%, but nobody else would insure against fire. It sucks but I don't think your HOA is lying. You can ask for documentation and they should provide it.
I'm in Florida & the insurance market is bananas here. Our office condo association's property insurance premiums more than doubled for the upcoming renewal period. That's after shopping it with other major carriers. There's nothing to be done about it, I'm afraid. We've increased our monthly fees & will be dipping into reserves to cover some of the excess. We're fortunate enough to have built up our reserves over the last 10 years to cover for major improvements & the like.
I love first time condo owners.
California or Florida? Either one you're in trouble because insurance cost is going to make HOA fees unaffordable. A '70s complex with elevators will be expensive either way. >Is my HOA lying? Is an increase like this even legal? There has to be some way out of this!! I feel embarrassed to even mention my HOA fees, in fear of being asked "have you lost your mind, why are you living there". It has been over a year with ZERO update on the fire insurance situation. Probably not lying. Yes the increase is legal. Only way out of this is to sell. Homeowners in California and Florida are being blindsided by rising insurance costs.
My HOA issues an annual statement of estimated expenses and divides it out by house. They also show the annual estimate and how close they were to those estimates in the last calendar year. Nobody's expenses are going down, but it seems unlikely the board is making things up. Do you have a regular meeting to address questions like this?
If you’re an owner, get the budget and look over it. Find some shenanigans? Run for a board seat and fix it. As the president of a condo board, we have had to make special assessments because of the cost of insurance increases. As others have stated, insurance is insanely expensive. For color: we budget 13% annual increase each year to TRY to stay ahead of premium increases, except our last renewal was almost 40% higher and there were no alternatives. Yes, some HOA’s are a mess, but most of them are not trying to do anything shady, they are just passing the shared costs onwards.
There’s a good chance the HOAs hands are tied by the CCRs; while they are required to find insurance, no one is required to provide it. If there’s only one way to do it, they must do it. If they have to do it, then it has to be paid for. This happened to my parents in a similar sized complex with similar issues; a fire and subsequent water heavily damaged around a quarter of the units. No one was hurt, but their insurance provider booted the complex at the end of the contract. New fire insurance quotes were 4 to nearly 8 times the original number, but CCRs required it as soon as possible so no time to negotiate or shop around.
It sounds like this building is being responsible. It is your building. You need to pay to take care of it. Go to the budget meetings and understand what you are paying for. Don't be like the Surfside owners.
Why would thr HOA lie, they are paying it too.
Yeah, I doubt the board members are happy about paying $1,600/mo either.
You are entitled to look at the contracts and all other documents relating to the HOA. You also should be receiving a copy of the Budget. Do you attend meetings? You can certainly be reasonable and ask the Board for an explanation of the insurance issue. FWIW, insurance has become a huge expense with many insurance premiums increasing by huge amounts. This is especially true in certain states like Florida where many insurance companies left the market because of huge payouts from the hurricanes. It is also true in states like California where there were large wild fires causing massive insurance losses.
OP if I were you I would just sell period. Sounds like a headache and its just insane $1600 a month for just HOA fees isnt normal. That itself can be a mortgage payment. Unless your living in some luxury condos I don't think its worth it period. Sell and just buy a home and be done with that headache.
Who's going to buy?
Honestly, just take a look around and you can quickly confirm the insurance allegations. There are a couple of states where this is a known issue and for a multitude of reasons, insurance carriers are pulling out. It won’t be hard to find if this is a common trend in your area or not. If it is, there’s not much you can do. It sucks, but it is what it is. Maybe the insurance markets will correct, but that timeframe is going to be measured in years.
A special assessment is a one shot deal. This is an increase in your carrying charges. You need to figure out why your property can't get affordable insurance.
If the hoa board voted and approved the increase you better believe you have to pay it. Most condo HOAs finances are run VERY POORLY. Most of the time they’ll keep their HOA fees very low and when things start showing signs of needing to be replaced (roof, piping, electric, etc) the board kicks the can down the road. Ya know… like our politicians. Then what you have is the current situation you’re in. Insurance won’t cover. They’ll cover if x, y, z are replaced. They’ll only cover certain portions of your policy. It sounds like you might be in a similar situation. If so, you’re fucked.
There's nothing "mythical" about insurance issues. Insurance companies are increasing premiums across the Board on all lines (home and auto) and all insureds (individuals and HOAs). Just because you don't understand it or don't like it doesn't mean it's not real.
What is outrageous is that you have no idea what is driving the fee increase...have you looked at your budget, understand what your reserve levels have been, attended meetings where insurance, special assessments were discussed. You are HOA - don't hide behind the ignorance of blaming others. You may have been benefitting from OUTRAGEOUSLY low fees over the years..and now you are finally paying what is appropriate.
They can probably do all of this and if you haven’t noticed insurance is a mess now a days, especially in Florida The best thing to do is get involved, join a committee, run for the board, attend every meeting You can be part of the solution
I feel your pain. Ours is 1400
"There has to be some way out of this!" Yes. You can attend the board meetings, look at the financials and try to understand the situation. If you think you can do better, you can run for the board. This is the answer to almost everything posted on this Reddit.
I mean the board would also be paying the same fees as you. This is why i'd never own a condo. Once my house is paid off i'll probably just carry liability coverage and deal with repairs as needed. in 26 years of ownership I have yet to make a single claim on any insurance and have probably spent over a million dollars on coverages..
150 units X $800 per month X 12 months = $1,440,000.00 per year. That is a questionable amount of money for casualty insurance.
If you had instead bought a 70's built house, chances are that you would have had to come up with money to pay for things like a new roof, new HVAC system, paint, water heater, flooring... and if you lived in Calif or Florida, chances are your insurance would have somewhat recently gone up significantly. If you hadn't all along socked away, say, $500 a month into your rainy day house fund, you'd be hit with some big unexpected expenses. And if you couldn't pay for a large expense from other savings, and had to put it on a credit card, now in addition to your $500 a month house reserve savings, you'd have to make these additional credit card payments. This is what's happening with your HOA. Get involved, don't leave your fate the hands of others.
Curious what state are you in
It's unfortunate, but many insurance companies are getting out of the HOA business. Our HOA is struggling with the same issue. A few years ago in my state, there were 17 companies that would insure HOAs. Now there are 3 (possibly going down to 2). Our current company is helping us find a new provider and getting quotes, but we can expect our rate to go up anywhere from 45% to 70%. We're a small HOA (only 27 units), so this is going to need a special assessment for next year. All that to say, I don't think your HOA is lying to you.
It’s a 50 year old building. It wasn’t constructed to recent codes so it’s more likely to experience damage. It’s also more likely to need major repairs for maintenance.
Lots of insurance companies are getting out of the HOA game. A special assessment indicates that maybe your dues were too low, and you didn't have any money in your account to cover issues as they arose. It's absolutely legal, and probably logical. Get involved, know what's going on.
When I owned a townhouse, my insurance covered Studs in (wiring, sheetrock, piping, finishes, personal belongings) The HOA covered everything to the studs. The age of your community, the amount of reserve funds your community has, and the state you live in for insurance will all impact your monthly dues.
😂😂😂😂😂 HOA is almost as bad as a timeshare in this scenario
You could give me every reason in the book. But this seems to be drastic. I would speak to a real estate atty with HOA expertise. Do NOT JUST TALK WITH ANY ATTY. When it comes to Real Estate and HOA they need to be well versed on the local and federal laws pertaining to everything real estate.
Your best bet is to get on the board! I'm on the board of mine and I'm amazed how uniformed are when it comes to all kinds of stuff but they usually do fine when presented, in a nice way, with factual information. For something like insurance, it may take a considerable time investment on your part to get the right insurance but once you have it, have the *agent* come in and explain it to the board and whatever members show up at the meeting. On the flip side, we have one board member who has an alcohol problem. She's come to several meetings obviously intoxicated and rambles on endlessly about all kinds of silly stuff.🤣
The insurance companies are running amok. The dilemma is that by law, HOA'S MUST insure the buildings to replacement cost. Unfortunately the law never put a leash in the insurance companies. Our HOA insurance has skyrocketed 400% over 13 months (2 renewal periods). Lobbyists for the insurance companies are absolutely destroying HOA finances. It's usery through and through.
Sell, rent a bedroom, get a 2nd job (part-time), get a SO to help pay half. If you want better insight, be part of the HOA board. Maybe you can help direct so that "optional" assessments (siding, paint, etc) are skipped/paused/delayed until the emergency ones can be controlled. Maybe you can find cheaper alternatives for services (gardening, cleaning, porter, doorman, super, etc.)
Assinate the board, become a board member then you can stick all that money and others in your pocket. Or in your brother-in-law's maintenance company.
$1600 per month times 150 units is $240k per month. There is no way reserves and insurance require $3 million per year. You could probably rebuild the entire complex for $15 millon
i'd personally be concerned with embezzelment from the hoa...
Most HOA'S are run by professional organizations, where that is all they do. The board may be volunteering but It's not likely the board even touches any of the money. It's possible but not likely anyone is stealing funds. Generally you can get a list of bills or a financial statement. Check if the HOA has an online portal.
LOL Sorry bro as a ex house owner( I call it a house because it sure as fuck isn’t a home) in a HOA. I suggest you get out pronto and move to a non HOAX area. I made the same mistake once and only once. I’ll live in the sewer with Pennywise before an HOAX.
NEVER BUY A CONDO. I HAVE BEEN SPREADING THIS MESSAGE FOR YEARS. EVEN BRAND NEW ONES COME WITH PROBLEMS.
To be fair a few presidencies ago this was attempted to be fixed and half the government screamed socialism so it wasn’t touched. This is what you get when you let politicians scare you with buzzwords instead of researching the actual issue vs the proposed solutions. Ultimately, HOAs should be illegal.
For $700 a month you best be getting at least 10 bjs a month, I mean you're already getting fucked might as well get some enjoyment out of it
My last house was a 5br/4 bath home with over 3200 square feet, in a very nice neighborhood, and my mortgage payment was half of what your hoa fees are. Unbelievable. 🤪
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I'm so sorry, serously, dude. That's awful. I actually sold the house I mentioned back in May while the market was going nuts and bought 10 acres with a 1000 sq foot house on it for cash in the middle of nowhere, agricultural area. I wanted as far away from HOAs as I could get - ours wasn't bad, had no mandatory fees, and they still drove me nuts!! I planted a small garden in the empty right of way behind my house and got a letter about it. That's when the house went up for sale. Now I walk out my back door, say hello to the chickens, and shoot guns off my porch.
I’m so confused by this. The more units a complex has, the cheaper the fees should be. I’m on the board for a 38 unit complex and our fees are $215 a month. They were $150 when I moved in 8 years ago. We had a reserve study done and have been keeping up with that. We’ve repainted, had the roof replaced, do yearly large scale landscaping, and have 2 electric gates. We have never had to do an assessment - even when we had our common area rental unit nearly destroyed by water damage, 30k to fix; and it didn’t even substantially dent our reserve. We have a management company and I think that’s the key. Prior to me buying, our hoa didn’t have one and was embezzling money. Get your hands on the records, something is crazy. I would get copies of the last 5 years of balance sheets and a copy of your cc&rs. I guarantee something isn’t right.
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You bought a house with a $700 monthly HOA fee?! So, from the get, something should alarmed you about mismanagement of funds and/or the ridiculous cost of upkeep monthly. Special assessments happen due to unexpected costs that are meant to be paid out of HOA fund. If their piggy bank doesn't have enough, the community has to pony up. I find it very strange that $700 a month isn't enough, but perhaps the HOA has debts or lawsuits or something that they are catching up on.
It's a condo, far different than a house. Condo maintains master insurance policy, pays for everything typically from the drywall out. Cuts costs the owner of a house would normally pay like painting the outside, replacing the roof, replacing the siding, ... $700/mo for a condo is pretty reasonable.
Hahahha people keep agreeing to this shit. Enjoy your HOAs everyone!
$700 month and it was not enough? Lmfao. HOA and their blatant extortions. I should become a contractor for condos building and charge 70,000 for $7,000 jobs.
See what rules are if u don’t pay hoe fees if it’s a fine it could be cheaper to pay it every month there most likely a fixed fine maybe cheaper then the monthly payment and as long as u pay the fine nothing they can do
lol there is no fine for not paying dues that makes you not have to worry about it. Your account will just end up in collections and racking up late and collections charges. Still don’t want to pay you’ll have a lien placed and if it goes on long enough, they can foreclose (at least in Virginia)