I knew that HOAs could be a problem and now I have a big one. I own a condo in Alexandria, VA where my girlfriend lives and I go to visit. It's a vacation home for me but it could be a good rental. It's an area that is appreciating so I have wanted to keep it as an investment.
However I just got a big shock when they sent me the new collection policy that the board approved. The biggest part of the problem is that this new policy applies to special assessments beyond the usual monthly fee.
It says that if you are 5 days late paying the HOA fee (including any related fees or special assessments) a 10% penalty will be added. If not paid in 30 days a notice goes out which says that within 15 days it will go to the lawyer for handling. They will then demand that you pay all of your monthly fees for the rest of the year and they will remove you as a member so that you can't use the facilities like the pool and gym. The monthly HOA is $700 so this would be a lot of money if it happened in early in the year.
Once two payments are behind the legal council is authorized to place a lien and start a non-judicial foreclosure on the property. The payment due will be settled in the order of attorney's fees and courts costs, late fees, maintenance assessments, special assessments and then the usual HOA payment owned.
I have the money to cover this and don't expect to be late, but imagine that you are working for the government and your pay check is late or you are a retiree and you SS check is late due to the shutdown or something beyond your control. Your situation will spiral out of control in no time.
What's worse is that this building is a high rise from 1982. It's possible that they could make special assessments for infrastructure that could be in the thousands. I'm going to have to look over the budget carefully for this reason.
I would not buy the place under this new policy. I'm temped to sell now but I don't have enough equity to cover all of the costs and I'd take a loss over what I paid. I had equity but sold the one bedroom and bought a two bedroom so that we'd be more comfortable as my girlfriend likes living there and I like visiting. I don't have a mortgage so at least that's not an issue.
What's really concerning is that the president of the HOA is a really nasty guy who sits in his condo monitoring the security cameras and then runs down and confronts tenants who he thinks are breaking the rules, like taking too big of a package up the elevator without a special reservation or some such trivial thing. I had a number of confrontations with him and he's a most disagreeable bullying type of person.
I guess this is a warning that you have to be wary of HOAs. I'm not sure how I would have found all of this out before buying.
However I just got a big shock when they sent me the new collection policy that the board approved. The biggest part of the problem is that this new policy applies to special assessments beyond the usual monthly fee.
It says that if you are 5 days late paying the HOA fee (including any related fees or special assessments) a 10% penalty will be added. If not paid in 30 days a notice goes out which says that within 15 days it will go to the lawyer for handling. They will then demand that you pay all of your monthly fees for the rest of the year and they will remove you as a member so that you can't use the facilities like the pool and gym. The monthly HOA is $700 so this would be a lot of money if it happened in early in the year.
Once two payments are behind the legal council is authorized to place a lien and start a non-judicial foreclosure on the property. The payment due will be settled in the order of attorney's fees and courts costs, late fees, maintenance assessments, special assessments and then the usual HOA payment owned.
I have the money to cover this and don't expect to be late, but imagine that you are working for the government and your pay check is late or you are a retiree and you SS check is late due to the shutdown or something beyond your control. Your situation will spiral out of control in no time.
What's worse is that this building is a high rise from 1982. It's possible that they could make special assessments for infrastructure that could be in the thousands. I'm going to have to look over the budget carefully for this reason.
I would not buy the place under this new policy. I'm temped to sell now but I don't have enough equity to cover all of the costs and I'd take a loss over what I paid. I had equity but sold the one bedroom and bought a two bedroom so that we'd be more comfortable as my girlfriend likes living there and I like visiting. I don't have a mortgage so at least that's not an issue.
What's really concerning is that the president of the HOA is a really nasty guy who sits in his condo monitoring the security cameras and then runs down and confronts tenants who he thinks are breaking the rules, like taking too big of a package up the elevator without a special reservation or some such trivial thing. I had a number of confrontations with him and he's a most disagreeable bullying type of person.
I guess this is a warning that you have to be wary of HOAs. I'm not sure how I would have found all of this out before buying.
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