• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Definition Of Hoa

Status
Not open for further replies.

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
According to the sales representative of the developer there is no Homeowners Association (HOA). However, there is a partywall agreement with a management agreement that covers water, landscaping, snow removal, and trash for a $110/mo fee. This is an attached Rowhouse. I say it is a HOA. Any thoughts?
 

Peter LeQuire

Elite Member
Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
Don't know 'bout Colorado, but here for the HOA to exist as such, capable of entering into a contract for services, it would have to exist as a legal entity, with a recorded charter, and the other legal documents. If you and I buy adjacent townhouse units, we would not need an HOA in order to enter into a contract with a third party to perform the chores you recite.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Developer is thinking in terms of zoning. This is not a zoning issue. According to FNMA, mandatory fees (by their definition on their form that you are completing) is considered a HOA and must be marked as such.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Party wall agreements are not homeowner association fees, but as resguy said, they want to know about these fees.
 

TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
Don't know 'bout Colorado, but here for the HOA to exist as such, capable of entering into a contract for services, it would have to exist as a legal entity, with a recorded charter, and the other legal documents. If you and I buy adjacent townhouse units, we would not need an HOA in order to enter into a contract with a third party to perform the chores you recite.


same thing in ohio. if a development has a HOA then it must be registered with the state as a business.
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
Don't know 'bout Colorado, but here for the HOA to exist as such, capable of entering into a contract for services, it would have to exist as a legal entity, with a recorded charter, and the other legal documents. If you and I buy adjacent townhouse units, we would not need an HOA in order to enter into a contract with a third party to perform the chores you recite.

This is a new 16-unit complex with each owner having to sign the Management Agreement and agreeing to pay the $110/mo dues. At first glance it appears that the developer is trying the avoid the legal ramification and issues of being a HOA in the State of Colorado. If the Lender has concerns they can hire a legal expert to interpret the Management Agreement. This is beyond my level expertise and SOW. It has been so noted in the addendum.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
This is a new 16-unit complex with each owner having to sign the Management Agreement and agreeing to pay the $110/mo dues. At first glance it appears that the developer is trying the avoid the legal ramification and issues of being a HOA in the State of Colorado. If the Lender has concerns they can hire a legal expert to interpret the Management Agreement. This is beyond my level expertise and SOW. It has been so noted in the addendum.
WRONG! That has nothing to do with your report! It's not about the legal or zoning. The PUD is a simple SOW and is spelled out by FNMA. Your HOA on your report is NOT beyond your level of expertise as it pertains to your report. IF it is, you must turn down ALL residential assignments because we are required to know how to discern whether or not a property is considered a HOA. Again, pretty simple; a 10yr old kid could do figure it out. It has mandatory HOA fees? Then you mark that it's a PUD and state the dues on the form. End of story.
 
Last edited:

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
WRONG! That has nothing to do with your report! It's not about the legal or zoning. The HOA is a simple SOW and is spelled out by FNMA. Your HOA on your report is NOT beyond your level of expertise as it pertains to your report. IF it is, you must turn down ALL residential assignments because we are required to know how to discern whether or not a property is considered a HOA.

Are you certain the developer is aware of the HOA Laws in Colorado? Are you a legal expert concerning HOA's and Management Agreements in determine their legalities in the State of Colorado? I didn't think so. This is not a simple HOA issue.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
According to the sales representative of the developer there is no Homeowners Association (HOA).
So then who owns the common areas? To whom is the monthly payment made?

there is a partywall agreement with a management agreement that covers water, landscaping, snow removal, and trash
Wouldn't these services imply common areas?

This is a new 16-unit complex with each owner having to sign the Management Agreement and agreeing to pay the $110/mo dues.
Does the "Management Agreement" actually represent a "Declaration" or are there other documents?

"Common interest community" means real estate described in a declaration with respect
to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration. Ownership of a unit does not include holding a leasehold interest in a unit of less than forty years, including renewal options. The period of the leasehold interest, including renewal options, is measured from the date the initial term commences.
Source: Colorado Common Interest Ownership Act
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
So then who owns the common areas? To whom is the monthly payment made?


Wouldn't these services imply common areas?


Does the "Management Agreement" actually represent a "Declaration" or are there other documents?

Since the development is still under construction the developer owns the common area. The $110/mo dues are payable to the developer. No other documents were provided.

In Colorado there is a construction defects law by which HOA's can file a class action lawsuit for alleged construction flaws. So developers are creative in ways to avoid creating HOA's.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks