Watching over the community

In good times, a homeowners association can be the social energy of a neighborhood, organizing events to keep residents in touch while enjoying the community’s amenities.

In stressful economic times, it can play a much more significant role in keeping a development’s values up.

“A homeowners association is a way to make a community better,” said Jon Colcord, who was among the first buyers to move into the Brookhaven at Sugarloaf neighborhood two years ago. “A builder’s job is to build. It’s the homeowners who are more interested in say, having the pool cleaned and making sure the entrance gates work.”

Colcord and several of his neighbors formed a transitional association to learn the ropes of running a community before their builder moves on. Their active-adult development has about 70 occupied homes, but is still under construction.

“We didn’t want to wait for a year or two and have them just hand things to us,” said Colcord. “So we’ve set up several committees and are learning.”

Volunteers are learning what it takes to keep up the landscaping and amenities. The social committee has started organizing a communications network and arranging monthly events. A finance committee reviews where the dues are going and sees if the reserve funds are growing, while a covenants team goes over the guidelines for keeping the neighborhood looking its best.

“We’re getting good participation,” said Colcord. “Most of the people here are very proactive. And it’s better to have more people involved to get things done.”

With the economic climate slowing the construction in many new communities, having an active homeowners association is an important asset, said Seth Weissman, an Atlanta attorney whose firm works with associations around the metro area.

“For instance, if your next door neighbor gets foreclosed on and the grass is not cut and the house isn’t maintained, it’s going to impact your property’s value,” said Weissman. “That’s the sort of situation where an HOA can step in and perform exterior maintenance to try and keep the community looking good.”

In the case of condominiums, having a strong HOA can be vital to the condition of the building, said Weissman.

“The money an association collects is not just for frivolous stuff,” he said. “A condo association spends money to insure the building, and some also cover water, trash services and, in some cases, the heating and cooling systems.”

“A community with $1 million in reserves is in a much better position to weather the storm of some owners not being able to pay their bills.”

Though HOA members around the area are facing new challenges, Weissman believes it’s still a good time to buy.

“The lesson of the day is that buyers should go out and get the great deals that are there, but do it with their eyes open,” he said.

Five key questions to ask about HOAs

> Who controls the association?

> How much money does the HOA have in a reserve account?

> What are the assessments in the neighborhood or building?

> Are dues being subsidized by a lender or a developer?

> What is the delinquency rate of existing homeowners in paying assessments?