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Why do I have to pay HOA fees? - YouTube
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hi I'm Justin and welcome to the Landis
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look where we take an inside look at the
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world of real estate and today we're
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here with Ben Rico
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Ben welcome thanks Justin Ben is one of
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the awesome agents on our team and he is
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a resident of the Arizona lost he sells
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a bunch of condos there and he is
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Secretary of the HOA and so today we're
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taking an inside look at homeowners
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associations and Ben is our local expert
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and so he's gonna share some of his
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inside knowledge with us Ben first of
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all I mean what is an HOA if you hear
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HOA or homeowners association like what
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does that actually mean
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yeah HOA it basically stands for
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homeowners association and if you buy a
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condo or a townhouse or any kind of
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building that has any common elements
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you are automatically a member of the
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HOA cool so I think a lot of people
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think that the HOA is the group of
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people who maybe tell folks what they
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can and can't have on their porch put in
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actuality anyone who buys into that
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community is on the HOA and so what that
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means is you own the home or you own the
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condominium but you also have a
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percentage stake in what's known as the
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common elements of the romani that's so
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common elements could be a pool it could
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be a gym it could be any of the exterior
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and as a member of that HOA you have a
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responsibility for maintaining those
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common elements in your experience would
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you say that people have generally a
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positive or negative perception of the
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HOA are people like yes this is good or
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they are telling me I can't put plants
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on my own my balcony yeah I think I
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think the perception of the HOA is that
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kind of busybody resident who runs
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around with a clipboard and it's telling
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people they they can't have certain
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things on their patio or but in
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actuality what an HOA does is they
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really just help maintain those those
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common elements but yeah overall the
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perception is that there are people who
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are trying to tell you what to do so how
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did you get on the HOA board are you the
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busy like you normally walk around with
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a clipboard you're like yeah this
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gonna be really great how did you how
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did you get on the HMA personally yeah
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it's kind of interesting I'm the kind of
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person who doesn't like it when people
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tell me what to do and I like to stay
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out of people's business as much as I
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can but it got to the point where when I
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moved into the Arizona lofts I didn't
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really have any interest in it yeah and
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then it got to the point where I noticed
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our property management company wasn't
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doing some things so one day they told
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us that they were going to remove some
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bikes that looked to be abandoned they
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sent it out by an email and I was
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thinking to myself okay I need to label
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my bike to let him know that it's my
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bike and it's not abandoned and they
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didn't put any signs up they didn't do
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any notice other than one email and then
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usually it takes these guys and wants to
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change a light bulb but the day that
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they said that they were gonna start
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removing bikes they were out there with
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bolt cutters early in the morning and so
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many residents got their bikes taken oh
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my goodness yeah and I love bikes you
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know my legs and when I saw this happen
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I was just I was so upset that I went to
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a board meeting and I never been to an
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HOA board meeting but what are those
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meetings like yeah so it depends on the
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community right so some board meetings
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you know they start out with some
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announcements they make sure that they
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take care of all the business and then
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they just kind of open up the floor when
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we when when I went to my first board
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meeting it wasn't like that it was chaos
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he just opened up the floor right away
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and it was an area of grievances
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so it's on your community honestly so I
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walk in I was like wow there's you know
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there's a problem with the property
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management company they're taking
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people's bikes I'd say there seems to be
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a problem with organization on the board
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and so I volunteered to search for a new
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property management company that I got
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on a committee and we started looking
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for a new management company and the
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more I learned about the how the process
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worked the more I saw that maybe some
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changes need to happen on the board
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there are a lot of people that they they
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just they were burnt out yeah and so is
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this thing that has got to be something
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this is completely volunteer right not
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getting paid she did it slightly
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volunteer and I don't blame them for
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kind of being tired of it because in the
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past a lot of people didn't want to be
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on the board and so they had
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taking on this burden for themselves for
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a long time and and they were ready for
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kind of a changing of the guard and so
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the other people with me on that
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committee we ended up joining the board
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I didn't really want to join the board
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but there for her there weren't a whole
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lot of people that were chomping at the
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bit to do it so since I kind of already
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had an inside look into how it worked
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that's what got me on there and yeah we
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started we made changes we changed the
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property management company we got new
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landscapers we got new custodial staff
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so what's been your perception now that
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you know that you've done it have you
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enjoyed it is it a lot of work if
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somebody is in a HOA and they're
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thinking about hey maybe I do wanna get
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involved maybe I did what kind of like
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first hand info could you share with
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them I think if you have a good team
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it's not that much extra work so you
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need to have some other people with you
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who are really energetic and wanting to
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make this community better so if you see
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some problems with your community I
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always say you know you can't complain
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if you don't get involved especially
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with Asian you can but it's not helpful
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Lydia people can but yeah this is that
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helpful yeah so if you want to get
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involved go to go to when hom you go
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check out what's going on in the
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community you learn about your board
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members learn about how decisions are
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being made and if there's a way that you
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think you can contribute then do it and
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it doesn't take that much extra time I
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spend a couple hours a week you know
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looking at some bids that have come in
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responding to emails and just kind of
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making sure everything's organized but
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otherwise it's not a huge time
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commitment especially if you have other
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people you know that you can lean on so
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if I heard you right I mean the very
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first thing to do is if you want to make
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a change or get involved is to actually
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go to the meetings and start to do
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things and be present is that step
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number one real that's correct yeah
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usually HOA board meetings happen once a
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month and the board members really they
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want people to come and be involved and
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that they want people to form committees
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because they're volunteers they don't
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this is not their full-time job I think
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a lot of one big misconception with HOAs
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is that they are the property management
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company and that's important yeah yeah
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distinction to make is the HOA will hire
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a prop
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management company to execute a lot of
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the decisions that they've made now but
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the board itself is resident volunteers
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and so what does what are the main
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functions of the property management
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company so you hire the property
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management company then what are the
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main things they do right so they'll
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take care of any maintenance that needs
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to happen so the board members aren't
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out there doing the one you're not
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you're not getting a call at midnight
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hey my toilet stops up will you come fix
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this I don't know I don't do that yeah
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that's that's part which the property
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may be company doesn't do that either
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actually but yeah right so yeah they we
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have fountains they you know hire at the
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fountain breaks then you hire somebody
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to fix that we have gates at the gate
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breaks they hire somebody to fix that
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and so what we do is we like to think of
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ourselves as managing the property
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management company yeah and just making
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sure they're doing their job and that's
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where I think a lot of it show is kind
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of you know fall short occasionally is
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there not keeping track of what the
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property management company is doing so
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that's always a good question to ask
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when you're thinking about joining an
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HOA community is who's your property
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management company what kind of
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oversight you have over them and you
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know what's your relationship how many
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contact hours does the property manager
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have on the property because a lot of
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times maybe this property manager
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manages eight other properties and you
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might not be the highest priority so
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there's a difference between full-time
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managers part-time managers and things
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like that that's a perfect segue because
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the next question that I was gonna ask
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is for people out there who are
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considering buying a property that has
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an HOA what sort of due diligence do you
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advise our clients to do up front when
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they're considering buying in a property
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that has an HOA yeah there's some really
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particular questions you want to ask as
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a buyer and as a buyer's agent whenever
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you're considering you know purchasing a
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home in an HOA first of all you want to
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get a good feel of their budget right so
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you can ask a copy of their ask you can
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ask for a copy of their budget there
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they should give it to you and you want
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to really look at one particular thing
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which is there
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Reserves reserves it's basically a rainy
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day fund if something goes wrong that
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wasn't expected they can pull money out
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of those reserves to pay for it that's
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not going to affect the overall budget
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of the community if you're seeing that
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the reserves are being pulled from
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frequently or that it's at a dangerously
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low amount then there might be a problem
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with that community it might be the case
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that they're gonna do a special
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assessment which is which is what yeah
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special assessment is when something
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can't get covered by the reserves or
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it's gonna take the reserves down to low
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and they just require everyone to fork
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over some money and it's is there
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anything you can do about that or it's
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basically like hey tough luck you gotta
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pay it so there's some protections for
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residents the board can't just say
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everybody owes $10,000 they can't do
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that right so there's a limit to how
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much the board can unilaterally ask
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residents to pay which is usually about
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$200 a unit or something like that but
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if there's a need for a big thing like
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the whole roof needs to get replaced
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it's outside of warranty it costs
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millions of dollars do the community can
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vote and if the community decides that
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it's in their best interest to pay this
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money then they can vote for it and
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everybody pays their share yeah and
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sometimes the that's just what's
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required it makes me think of a building
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that painful years ago had a big problem
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with the parking garage and there was no
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choice but to fix it but it was ultra
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expensive and there was a huge special
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assessment which obviously impacts me if
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you're living there but it also impacts
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the saleability
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of your unit because you know the new
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buyer either you're gonna pay it or
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they're going to take it on if they're
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paying in installments and that can be a
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big impact for somebody because it's
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changing your monthly setup a lot or you
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just gotta end up paying at all upfront
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instead of paying it overtime right
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yeah it just depends on how they set it
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up but yeah that's a risk you know with
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joining a community with an HOA but of
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course that risk is distributed among
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all the other residents you're not just
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all on you as an individual so that's
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you know there's benefits
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there's also that risk that yeah you
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might have a special assessment so
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that's another good question to ask and
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then usually we ask for a copy of their
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bylaws you know their rules and
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regulations a big thing for a lot of
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people is they want to know if there's
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rental restrictions
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mm-hmm because some people think maybe
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I'll hold on to this property for a year
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I'll live there for a year but then I'll
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rent it out when I guess but a lot of
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communities they have a certain
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restriction on how many people can be
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renters and so you always want to ask
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that question as well when you're
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looking at H OS yeah these are great
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questions and so we'd well maybe on some
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of the issues or challenges but I mean I
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love that you mentioned you know the
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risk is spread over everybody what are
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some of what is to wrap this up what is
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one of the best things about being
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somewhere where there is an HOA yeah I
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love it I live in a community with an
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HOA I'm in Arizona lofts and when I
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owned my own home the exterior the yard
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the trees the roof it was all on me it
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was all on my shoulders and that was a
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big burden I had a 1940's bungalow and
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he's still Anna and you know you just
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never know when that shoes gonna drop
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and so you know if you take a look at
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you know what requires a special
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assessment for an HOA right maybe I'll
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have to pay out a little bit to cover
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something but it's gonna be distributed
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among other residents yeah when a tree
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goes through my roof right or if I need
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to dig up my front yard because my
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galvanized pipes you know closed in on
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itself that's on me yeah 100% it's
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basically everything in a single-family
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home is a special assessment right
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anytime anything happens there's a
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special assessment and you take 100% of
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that assessment everything's a service
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every trip to Lowe's is a special
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assessment so yeah for me it's nice to
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know that my my responsibility is being
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spread out among other people and it's
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also nice to know that you know we have
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a very active board that's going to make
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good decisions for that community
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they're gonna manage our finances well
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they're gonna pick the right people to
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do the construction and you know at I
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don't have to worry about yard work yeah
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it can take a lot of things off your
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plate first sure yeah take a lot of
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things off your plate which is awesome
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well then thanks for sharing this
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knowledge with us today really
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appreciate that hope you guys enjoyed it
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if you watched last week and you're like
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hey I thought this was going to be the
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latest look on location well guess what
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if you've ever done because
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correction project you knew that
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sometimes the timelines are hard to hit
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exactly and we were so close to being
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ready for this week but next week we
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will definitely be on location and we'll
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take a look at a rehab house that we saw
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a few months ago at the beginning phases
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stages and now we'll get to see it at
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the end and if you have any questions
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about in HOA if you're considering
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buying a property with an HOA feel free
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to reach out send us a message drop a
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line here we'd love to help you track
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down the answers and make make good
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decisions so thanks for listening today
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and we'll see you again next week
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