The HOA Board Quarterly Winter 2019 Issue #20 | Page 3

hoa assessments and the “whys”
by Brian Blackwell
Why do we pay?
Why do we pay the amount we pay?
Why do we pay for so many services?
I like to start with a simple comparison that we can all understand
and relate to: the purchase and maintenance of our personal
home:

1) We all Own a Home
2) We all understand that our personal home requires

money - just to keep it - and money to maintain it.
This brings me to the dynamics that often determine where we
purchase of our home, and the home itself:
1) Generally, we seek pre-approval from a lending

institution
2) Upon approval, and the knowledge of the cost of a

home that we qualify for, we:

a. Choose a Neighborhood within our budget

b. Choose a Home within our budget
In San Diego, we have a very wide range of neighborhood options:
From the reasonable, median house range in the $500,000.00’s,
to multi-million-dollar custom homes in very affluent areas.
Most of us, tend to find our “comfort zone” in the $500k range,
give or take.
This brings us to our choices - live in a community association,
or not? (about 48% of California’s have chosen to live in
Associations, while others choose to live in more rural
environments):

a.

Purchase a home in a community association where
the community (us and our co-Members/Owners) pay
for the common area expenses: subsequently, allowing
us to live in a community that’s well maintained, with
harmonious aesthetics standards, and more likely to
increase in value.

b.

Purchase a home on a lot or acreage where there’s no
community association, and no related assessments,
and where we solely are responsible for all costs,
maintenance, upkeep, etc., and where there are no
rules governing us or our neighbors, and all are free to
do exactly as we please, with no consideration of the
impact on our investments
After deciding whether to live in a community association or on a
private lot/land, and closing escrow on our new home, we typical
become responsible for related expenses and maintenance:
Operating Budget – Monthly Expenses:

1) Monthly Mortgage
2) Property Taxes
3) Insurance
4) Gas
5) Electric
6) Water
7) Sewer

8) Trash

9) Telephone/Cell Service

10) Wi-Fi and Cable
11) Groceries

12) Pets/Pet Care and Food

13) Monthly Maintenance:
a.
Housekeeper
b.
Gardner
c.
Pest Control
Savings Account – Long-Term for Major Components:

d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
Roof Repairs/Replacement
Exterior painting
New Hot Water Heater
New Kitchen Appliances
HVAC Repairs/replacement
Plumbing Repairs
Electrical Repairs
New Carpet/Flooring
New Furniture
Interior Painting
New Windows
New Landscaping
New Irrigation
Tree Trimming
Termite Treatment and Repairs
Very similar to owning our home (above), as a Member living in a
Community Association – if we’ve made the choice to purchase
our home within a community association – the Association
also comes with responsibilities comparable to owning a home.
However, as Members and Homeowners in a Community
Association, *we all participate in the costs to maintain the
entire community.
This is a very important point *“We All”. Who is the “All”?
In a community where the “All” is only 100 Owners, and the
community has ample amenities, the share of cost will be
divided between the 100, equaling a related dollar amount.
However, in the event the “All” is 2500 Owners, and the
community has similar ample amenities, and while the area
of land will be larger, and additional dynamics related to a
larger community apply, still, due to the much larger number
of Owners participating in the month expenses, more than
likely, the monthly assessments, with the participation of 2500
Owners, will be less that the community with only 100 Owners
participating in a similar share of expenses.
In the case of a typical Community’s expenses, where all owners
share in the many expenses, an annual budget may look like the
following:
Continued on page 4
Winter 2019 | Issue #20 | The HOA Board Quarterly | 3