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Reston Real Estate: There Goes the Neighborhood… Understanding Cluster Bylaws

by RestonNow.com Sponsor January 16, 2018 at 4:00 pm 14 Comments

This is a sponsored post from Eve Thompson of Reston Real Estate. For a more complete picture of home sales in your neighborhood, contact her on Reston Real Estate.

When Your Cluster Board Won’t Keep Things Up…

Living in a townhouse means that you live in very, very close proximity to your neighbors. It also means that what your neighbors do or don’t do will have an impact on you and on your home’s value.

I recently showed a great townhouse in the Lake Anne area. The place itself was in fairly good shape — it needed some updates but generally it wasn’t too bad. What stopped the buyer wasn’t that the home needed a new kitchen, it was that the areas of the property that are owned in common, the parking lots, sidewalks, retaining walls, large trees and even light poles all needed attention, everything looked under cared for and a little worn.

uneven concreteI started looking more closely; the buyer was right. The asphalt in the parking area was in kind of shabby condition at best, the sidewalks needed power washing, the light poles were peeling, the trees needed trimming and a few significant retaining walls were in bad shape.

The buyer asked me to get information about how the Cluster Board was going to address these issues. The listing agent relayed there was no active plan in place to address any of the issues my buyer identified. End result; the buyer just couldn’t get comfortable with the lack of action on obvious maintenance issues and so decided to keep looking.

Neglecting your property has consequences. Next to location, condition is the next single biggest factor in determining if your property will fetch a price at the top of your market range or at the bottom of your market range. When you live in a townhouse this means that it’s not only the condition of your home that counts; it’s the condition of all of the property you own in common with your neighbors.

So, what do you do when the “powers that be” don’t or won’t take action to address maintenance issues?

I think the first thing to do is to read and understand your Cluster Bylaws and to know your Cluster financials. Most Cluster Bylaws state specifically that the Board is directly responsible for maintaining the commonly owned parts of the property in a way that keeps it safe and that maintains and enhances the property values. It’s important to know your Cluster financials because if the Board has been under reserving, (not saving enough for repairs, replacement and maintenance), the problem is bigger than just inactivity.

The next thing to do is to get involved. Cluster Boards are notoriously over committed. Volunteer to get bids for work that needs doing, organize a Cluster clean up day and be willing to participate on committees. Do not just be a person that complains.

And If That Doesn’t Work…

It’s time for a Coup. Organize your like minded neighbors, identify candidates and get them elected to the Board. In most communities this isn’t too difficult to do. I think that 99% of what doesn’t get done is really a function of inertia and a lack of leadership.

You can have a huge positive impact on your community and your property values if you are willing to take on the responsibility and the time it takes to get projects done.

What you will find once you’ve taken over the reins of power is that it’s easy to understand where the inertia comes from. One day you’ll find yourself looking at bids from asphalt contractors and you’ll realize, “hmmm… I don’t actually have any experience with replacing a parking lot” then you’ll know why it’s so easy to do nothing. When you are seized with anxiety… push past it, your neighbors need you and you won’t regret it, well you might regret it but do it anyway.

  • I’d rather post as a guest

    Isn’t it the responsibility of the RA to enforce community standards on the individual cluster HOAs? If the cluster HOA doesn’t shape up then fines are imposed. Why wasn’t the Lake Anne cluster subject to the same scrutiny?
    In many cases, the cluster boards are populated with overworked volunteers without financial expertise in funding capitol improvements. I would never purchase another property unless the HOA finances were professionally managed (dues collection, reserving, etc). The risk of special assessments is far too great otherwise.

    • pls be clarific

      as you implied there is no such risk, the risk of special assessments, at Lk Anne. so are you thinking of buying there?

      • Greg

        All common-interest communities face risks of special assessments. Most of them underfund their reserve accounts, or, like this anonymous community, neglect their common property. Many of them do both.

        All communities, including the few well-funded communities, face risks of litigation, natural disasters, theft, embezzlement (remember Koger the “professional” management company and Shadowood’s self-management embezzlement?), changing times and tastes, inferior architecture and construction defects, and unqualified and incompetent board members with pet agendas.

    • The Constitutionalist

      Can any HOA truly be professionally managed?

      • Eve Thompson

        It is possible to out-source the management but it’s very expensive.

        • KimGr

          Far better than having a big fat lawsuit due to complete mismanagement.

    • Eve Thompson

      RA is really the 2nd tier enforcement. It is possible to use RA as a tool in this process but the first responsibility really is with the cluster leadership. It is one of the unique challenges of this type of community leaving.

      The property I was showing was not in Lake Anne but rather one of the neighboring communities.

      • Greg

        Against privately owned property yes, but not against the common property.

        The RA made a terrible decision to abandon anonymous complaints and an even worse decision not to inspect until a complaint is received.

        40+ year old properties need frequent inspections.

        • Eve Thompson

          I tend to agree with you Greg– I think that the anonymous complaint was a valuable tool. As I recall it was abandoned over a legal concern.

  • Chuck Morningwood

    I’ve been on a few different boards. Half the problem is that managing even a modest cluster requires a fair amount of work. The solution which I have found best is to hire a management company.

    Now, don’t get freaked out that you’re going to lose control of your cluster property. There will still be a homeowner board which provides direction. The management company provides the scut work of management.

    So, in our case, when we needed some dead trees removed, the board made a request to the management company to do so. The management company solicited bids, presented them to the board. When the contract was signed, the management company oversaw the work and paid the bill.

    The best part of the management company though is that they do all of the bookkeeping. We get quarterly cash flow information, including detailed information about current and past due accounts. At the appropriate annual meeting, we get a budget which reflects the boards priorities for the coming year.

    And, another big plus, is they provide expertise on most issues at board meetings. If you want to know about getting your lot resealed, chances are that your coordinator has already done that. If you have questions about process and procedure, they probably already have the experience.

    Considering how overextended most of our lives already are, it just makes more sense to pay a professional to manage your cluster’s valuable assets than to entrust it volunteers who might have little to no experience in such matters.

  • Greg

    “I started looking more closely; the buyer was right. The asphalt in the parking area was in kind of shabby condition at best, the sidewalks needed power washing, the light poles were peeling, the trees needed trimming and a few significant retaining walls were in bad shape.”

    Once again, the RA fails us all. So much for covenants enforcement.

    • Eve Thompson

      Greg- I don’t think this was an RA failure. This was a failure of the Cluster Board- they didn’t want to increase dues to reserve for the needed maintenance. I’ve written on this topic several times– the long and short of it is this: “Pay now, pay later” – but homeowners will pay for maintenance either because the cluster/condo is adequately funded and able to complete projects, or, they’ll pay when they don’t get full value for their property when they sell.

      • Greg

        I agree with you; however, the RA must do more frequent routine inspections of all private property as part of our RA assessments. We all suffer when Reston properties are not maintained.

        Resale inspections don’t cut it (and they are paid for separately by the resale fee) and they don’t generally cover common property.

        The maintenance covenants, both RA and cluster, apply at all times to all properties. There are no exceptions. On enforcing them, the RA has failed, especially when the very HOA boards that are entrusted with the fiduciary duty to maintain their properties fail to do so.

        The RA’s legal issue is now waiver for non enforcement, not whatever it might have been that eliminated anonymous complaints.

  • vdiv

    Isn’t there a complication with the historical designation of the cluster?

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