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Starting an HOA

Discussion in 'Planning Your Business' started by Joe, Mar 28, 2016.

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  1. Joe

    Joe Member

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    Hey Everyone,

    So the community my mother lives in came out of nowhere, houses are selling like hot cakes. The town is very small, (pop. Around 1500 or less) but the area were is middle to upper middle class and the only think this towns "HOA" covers are the fire department and small other things($100 a year). I gave the idea to my mom to start an actual HOA, or something similar that would benefit everyone as a whole.
    I told her to make an HOA(or homeowners improvement pool) that would include lawn care, pest control, include a fence around all the homes.(their not included for whatever reason which is weird based on the qualities of the homes), we live by a baseball park/park/basketball court with a large clear field that supposed to be for soccer. I wanted ours to improve it. All of this is to improve the worth of the homes

    My question is, how do I get started.
     
  2. T J Tutor

    T J Tutor Member

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    Starting an HOA after a development is already incorporated by the developer is a very difficult and challenging expectation. You see, in most states, the HOA is created by the developer. The developer turns over the HOA to a board made up of homeowners once the % of homes built exceeds the number of unsold lots and homes built. By the time this takes place, it's nearly impossible to rally the existing homeowners to reform the HOA to take on things like new additions, new expenses, and new responsibilities. In most states, any HOA that has fiscal responsibilities, must (by law) maintain what's called a Reserve Account for the repairs, upkeep, and maintenance of that which are the responsibilities of the HOA.

    I owned and operated a company in Las Vegas called Reserve Data Analysis of Nevada. In most states where there are HOA's, the states require the reserve accounts be audited by a third party firm to determine if there are enough funds in the reserve account to keep up with the expenses of the HOA. I can assure you that home owners are very difficult when it comes to increasing their existing HOA costs, let alone creating more expenses.

    If you are dead set on doing this, and there is an existing HOA (no matter how small), you must call a meeting of the HOA's board and present your proposals to them and convince them to call a meeting off the homeowners. If you can get those meetings, then you better have an extremely well planned out presentation and be extremely convincing. Remember, you aren't selling them on benefits alone (though one would think so), you are selling them on the additional expense and responsibilities as well!
     
  3. Joe

    Joe Member

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    That does seem like a a hurdle but I believe the community would based on the environment and location. And I would expect the hardest part would be convincing the people who might be hesitant to the idea. But I know that if we show them how our idea would benefit them vs the $8 they pay a month and see nothing happening it could work.($8 for the fighter fighting company) I think it would be worth it after its all said and done.
     

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