Monthly Fees Spreading to Single Homes : Some Developers Charge Homeowner Dues for Upkeep
Monthly homeowner fees, once levied primarily on residents in condominium and town-house projects, are quickly becoming commonplace in new tracts of single-family homes.
Some builders are charging buyers of detached homes more than $150 a month to maintain an array of amenities.
But other developers are charging as much as $70 to maintain mundane items such as streets and greenbelt areas--items that many new home buyers sometimes balk at paying for.
For years, the handful of builders who charged monthly homeowner fees did so to cover the cost of building or maintaining unusual amenities in their projects, such as lakes or even ski runs. Others, like those in hilly Mission Viejo, charge owners slope-maintenance fees.
But the growing popularity of master-planned communities chock-full of pools, recreation rooms and tennis courts has helped make the fees more commonplace and palatable to the public.
“Our buyers want lots of amenities, and they’re willing to pay for them,” said Dave Caillouette, a sales and marketing executive for the Irvine-based Baldwin Co. For about $125 a month, buyers at the company’s gate-guarded Brittany Heights single-family home development in Orange get use of a pool, spa, tennis courts and clubhouse.
But while most buyers don’t mind paying for such “extras,” explaining why they must pay to maintain their own roads often proves a more difficult task, particularly if they previously lived in an area where the city maintained the streets and took care of repairs.
Generally, developers who build roads according to city standards have the option of dedicating them to the public--in which case the city will have to maintain them--or keeping them for the private use of the people who live in the development.
If they opt for the latter, the association must pay for the roads’ upkeep, said Meg Gilbert, a manager of the real estate advisory service of Los Angeles-based accountancy Laventhol & Horwath.
Residents in gate-guarded communities typically maintain their own roads, Gilbert said, because turning them over to the city would allow the general public to come into their private neighborhood.
Roads in equestrian communities are also usually maintained by a homeowners association because the thoroughfares have dirt shoulders instead of curbs, and thus don’t meet city standards.
In some cases, city requirements virtually force builders to collect monthly fees. In order to gain approval for a planned 134-unit single-family home community in the Ventura County beach town of Port Hueneme, Weston Communities recently agreed to a city requirement that an association be formed to install and maintain landscaping in the proposed development.
Builders who disagree with such requirements find their options are limited.
“You can either move your project or fight City Hall,” said Bob Jones, Weston’s director of marketing and sales. “Those usually aren’t viable alternatives.”
Jones said such requirements help maintain the appearance of the neighborhood and can buoy property values. “But on philosophical grounds, I guess I’m opposed to the concept of forcing people to form associations that exercise control over the neighborhood,” he added. “It takes away some of your individualism.”
The dues can also take away a good-sized chunk of the owner’s disposable income. Unlike payments for mortgage interest and property taxes, homeowners’ dues generally aren’t tax deductible unless the owner rents out the property to someone else. The fees also can make qualifying for a loan more difficult because they raise a borrower’s overall housing costs.
In addition, the fees may eventually be raised to cover increased maintenance and insurance costs or to meet other expenses. Monthly dues at many projects have surged more than 50% over the past three years, primarily because insurance premiums have soared.