Q: I live in a homeowner’s association that is aggressive. We have around 250 homes, and some of the homes are on a lake that the association maintains. But homes that are not on the lake do not have access to it. Should the association dues be different for homes that are on the lake and restricted by private property? We all pay the same annual association dues of about $500.
A: Good question. Here’s the bottom line: When you live in an association, some things aren’t fair.
Usually, the association documents set up the fee structure and the developer of the association has some discretion about how to set up the documentation and how the fees will get paid. Your question poses an interesting issue: You are considering the lake as an amenity that benefits only the homeowners who live along it.
You should know that for many developments, lakes and other water detention or retention areas are necessary for the proper drainage of water for the entire community. From this point of view, any maintenance to the water drainage systems would be necessary for the benefit of the whole development. We can see how a developer would cause the association to have the responsibility of caring for those water features and have every homeowner share in that expense equally.
As a separate issue, the developer can also create a fee structure for certain uses that result in additional fees for the association members. For instance, if the homeowners on the lake have boats and those boats create additional expenses for the association, the association can charge a fee for having boats or using boats in the lake. Having said that, and given that your annual dues are around $500, we would think that the association is probably spending most of the money maintaining the lake for drainage purposes.
If your numbers are accurate, your homeowners association takes in around $125,000 a year. That doesn't seem like a lot of money, given that lakes and other drainage systems in developments often need annual maintenance and, in some years, major maintenance to keep the water flowing properly through the development.
So, on balance, if the intended need for the fees is for drainage purposes, it’s probably proper for the fees to be the same for all homes. And if you live in a state where you pay property taxes, we’ll assume that the homes on the lakes sell for more than other homes and those homes will then pay higher property taxes because of their higher valuation.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask.” She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.