Happy New Year

Yes, we know it's not even December yet. No, we haven't lost our minds. The happy new year we are talking about is the one you will likely get from your Homeowners' Association or Condo Association on January 1st. Oh yeah, and it probably won't make you very happy.

If your HOA is like most, dues can only be increased at the beginning of a new year regardless of whether you pay these dues monthly, quarterly, or yearly. That means your neighborhood association is likely meeting right now to discuss budgeting for next year. And, since the cost of everything from common area maintenance to electricity for street lights is almost guaranteed to increase, the HOA will have to look at adjusting the dues to compensate.

Now, don't get us wrong, we are not implying that an increase in dues is necessarily a bad thing. In fact, given that the overall look and feel of a community directly affect property values, money spent on maintenance should be looked at as an investment, not a fee. That said, these increases can present a disclosure issue when it comes time to sell or buy at the beginning of a new year.

When selling a piece of property that is governed by an HOA (we are using this as a blanket term), you must disclose the amount of the dues and how often they are paid. In the middle of the year, when dues are set, this is simple. However, at the end of the year, it gets a little more tricky.

If you know that your HOA dues will increase at the beginning of a new year, disclose that fact to all potential buyers. If you aren't sure, be proactive and call your management company or the Treasurer of the HOA and ask. The last thing you want is a lawsuit from an angry buyer who was surprised by a bill higher than he expected.