HOA Board Research for Future Consideration: February, 2025
Issue/Opportunity: Near-term process for handling owner requests for Contiguous Lot consolidation. Assessment of many factors regarding Annual HOA Dues
Background:
When the HOA was formed pre the Great Recession and the COVID the calculation was that with 220 lots owned individually, the $700 and $1,200 dues fee was expected to be adequate to fund normal business activity and a small residual at best for emergency events. Now, 17 years later the rates are the same. However, the number of emergency expenditures from natural causes (hurricane related road damage, debris removal, rockslides as well of security and safety needs (gate maintenance, on site water tank for fire protection, package deliver secure facility, etc.) are increasing in frequency and intensity.
The consolation of lots, where contiguous is a legitimate request when the owner has a well thought approach as to what functional benefits are expected to the owner from the combined lots. However, the benefit is entirely to the owner. No costs for CMF security, road management, trash removal, liability and property insurance are reduced. The revenue loss will have to be made up. There are alternatives which the Board may investigate including an across the board rate increase, adding rate tiers, special assessments, etc. The Board also has the authority to deny requests for lot consolidations as a standard policy. Any alternatives should be in the best interests of the community while supporting owner building plans for their single family ownership as defined in the Restrictive Covenants and amendments.
We are investigating what other HOAs have done regarding similar topics.
While the research of policy and process involving lot consolidation only directly comes before the board from a small number of owners with contiguous lots, the actions do have a impact of the broader topic of HOA Fees to cover the growing inflationary and activity driven cost escalation to maintain the safety, security, and attractiveness of our CMF Community.