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Who's In Control!

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Jay D. Greener

Freshman Member
Joined
Jul 4, 2002
Professional Status
Licensed Appraiser
State
Colorado
Please excuse me while I rant!!!

Is the developer/builder in control of the Home Owner's Association??? How in the world do you find this out??? Am I completely missing something? Most of the time the homeowners don't know how much their fees are, much less who is in control of the association.

Obviously, if it's an older, matured subdivision generally the homeowners are in control, if it's new and under development the builder is in control; but how about when the development has multiple filings and there are some filings that are finished but there is heavy construction in later filings???

Who do you call? I generally call any/all active listing agents in the subdivision, get berated by the realtors (who don't know either), leave messages for sales offices (who don't have time for lame appraisers) and search the Secretary of State website for any clue as to who is developing the subdivision...I can spend hours to find this information...why am I responsible for this information? I don't consider this in the final estimate of value and cannot verify the 'control' of the association - do lenders request this information so they can hang me when a deal goes south?

Yeah, I'm a little heated about this...I'd like to hear from some clever people who can enlighten me...

Thanks,

Jay
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Ask the homeowner who the president of the HOA is. Also, ask the homeowner if the pay there dues to a management company.

Then tell the homeowner you will be able to finish there appraisal before there lock expires once you get the info.

Helpful? I hope so.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Jay:

Rant while justified, is unneccesary.

Throw the issue back where it belongs: on other people.

Idicate what steps you took to 'discover', indicate non-compliance with the request from the responsible parties inclusive of at least one contact with the HOA rep (every condo owner knows who TAHT person/entity is.

Then condition the report on the Extraordinary Assumption that the developer is/is not in control based on the results of your inquiries, Lender to insure correct answer if concerned about this factor!!
 

TC

Elite Member
Gold Supporting Member
Joined
Jan 31, 2002
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Jay,

It's pretty simple actually. If the plan is under construction chances are the developer is still in charge, stop in at the on-site sales office and ask around. If it's a fully developed plan I would assume the developer is gone. But stop in at the homeowner's association office and talk with the secy. Or knock on a few doors like my first boss told me do.

TC
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
I don't know if this helps, but you might consider why they are asking the question. It kinda goes along with asking about phases, completion and stabilization of the project, units for sale at any given time and percentage of rentals. These conditions can lead to volatility in the supply of competing units should the selling entity decides for whatever reason to dump everything at the same time your unit is being marketed.

Examples where a developer remains in control of a condo project after stabilized occupancy includes projects with time-share units, mixed uses, blocks of units being rented out under common management, etc.. You can see that these conditions might have an effect on future marketability under worst case scenarios.

These homeowners get billed for their association dues, which means there is an address and a management entity identified on the billing. Get a copy of that from the owner and you'll know whom to call and ask these questions.


George Hatch
 

Phil Rice

Member
Joined
Apr 22, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I would have no hesitation to either guess, or ask someone (homeowner) else to guess.

Or, simply say I don't know, or not readily available. If someone wants to insist that you obtain the info, explain that finding out who is in control of the HOA is a complex assignment and there will be an additional charge.

Get the value right and don't sweat the small stuff.
 

TC

Elite Member
Gold Supporting Member
Joined
Jan 31, 2002
Professional Status
Certified Residential Appraiser
State
Pennsylvania
The 2055 form requires that you disclose the information. How do you simply say "I can't find it, sorry." My clients always want that info and if I want to keep them as clients I supply it. I would be embarrased to say I don't know.

And its not small stuff. Some lenders will not loan in condo/PUD areas until a percentage of units are owned individually, not by the builder.

Are they not teaching this in the beginner classes anymore?


TC
 

Patti Jury

Senior Member
Joined
Mar 23, 2002
Professional Status
Licensed Appraiser
State
Colorado
WOW, great timing...

I'm under the firm belief Lenders need to redefine PUD and Assocation dues. Here in Colorado Springs we have PUD zoning.. used for zoning only..No dues required. However lender assumes that since it is zoned PUD that there are automatically Association Dues. I am having that fight right now on one with Wells Fargo. They want an exact number of units..is a single family house considered a Unit? They want the Association information.. What Association.. there isn't one. The area is very large with pockets of R1-R4 zoning.. the list goes on..

PUD does not mean Condo anymore!
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Zoning labeled PUD does not mean a private PUD that would be reported at the top of the URAR or 2055. There are two types of PUDs, and sometimes the two never shall meet! The first time the question regarding PUD comes up is asking about private restrictions at the top of the forms. If there is a mandatory home owner's association fee then the PUD box is marked above and the appraiser needs to be aware of what that fee is used for, it could become a lien against the property if not paid. The second place a PUD might pop up is when describing the site and the question is asked about zoning. Some governing entities use the expression of PUD for a specific type zoning, that has absolutely nothing to do with the private restrictions. Any monetary effect that governmental zoning might have would be included in the property taxes or in a special tax assessment and nothing what so ever with home owner's associations or their fees. There might be a property that is in a PUD with a private home owner's association and also the local government happens to have used the term PUD for the zoning of that area, but they are total independent of each other and are two different items. There might even be a situation where there not private PUD restrictions, no private HOA fees but the zoning might be PUD. Or vice versa, a subdivision that is set up as a PUD with a mandatory home owner's association and fees but the zoning doesn't say a word about PUD as a Planned Unit Development or PAD for Planned Area Development. The private PUD is a big red apple and the zoning PUD is a big russet potato. Both might be of reddish hue but one is a fruit and one is a vegetable and should never be confused with each other.
 
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