Those that live in Colorado believe that the state is great.  Colorado has held the distinction of being number one in healthy people, great hiking, and so much more.  One distinction that Colorado I'm sure didn't want - to be number one in foreclosures in 2006.

Why is it important to the Townhomes at Red Hawk community to know about the foreclosure rates in Colorado?  Foreclosures and bankruptcies within your community effect your community greatly.

Each time a bank gets a home back because of a foreclosure, the bank sells the home for what they have invested into it or the best offer.  Banks are not in the business to hold onto homes and wait for the value to go up - they are in the business to loan money and charging interest to make money.  When these sales prices are low, the comparibles for sales numbers for the community are lower.  This means those looking to purchase within the community sees a home that sold for lower than others listed and will try and negotiate the price down. 

If the homeowner that is foreclosed on owes money to the HOA for assessments, the HOA has their hands tied in what they can actually collect in past dues.  Per the community's collection policy, when a homeowner is behind in an amount equal to two month's worth of dues and late charges, the account begins moving towards the attorney for them to seek further legal collection procedures.  If someone is going through a bankruptcy or a foreclosure, they are usually having a hard time of it with their finances and we all know that getting "blood from a turnip" is difficult - so is getting money from someone that hasn't any.  So these owners are having a hard time, but they are receiving the benefits of the community's resources without paying for it if they are choosing not to put their duties to the community ahead of the car, the doctor bills, the housing bills, the food bills, the electrical, the credit card, and ...  There are some owners that are in a financially poor position but they choose to keep their dues current because they see the value they are receiving and don't want to see the rest of the community pay for their services - to them I say "Thank You!"

The attorney and the HOA must conduct collection procedures by following the fair credit acts and other laws to protect those that owe money.  Some remedies are to garnish wages, file a judgement in court, put the home into receivership, and others. 

Once notice to foreclose has been sent out from the bank though, the HOA has some recourse.  HOA assessments are first lien holders and collect up to 6 months of past dues from the bank that is foreclosing going back from the date of the notice.  This doesn't include late fees, but assessments are good to have.  Those assessments that go back further than 6 months from the notice to foreclose are still owed by the homeowner that has lost their property in foreclosure but you've lost some of the remedies available to collect these dues.  Many times these dues should be written off as the HOA most likely will not see them.

With bankruptcies, the court determines what the HOA is able to collect.  Sometimes the courts state that all past due dues are wiped out - the HOA then needs to write those costs off.  Sometimes the court determines that a portion is owed to the HOA and the receiver for the court collects the funds and forwards them to the HOA.  While someone is in bankruptcy proceedings and has not been discharged yet, the HOA and collection attorney have their hands tied in regards to what can be done towards collecting these fees.  The HOA can file motions to the court asking for relief but we are finding those costs are more than what is due so the Board of Directors must decide how much money to spend in these cases or what is budgeted.

Your Board of Directors, HOA Management Company, and collection attorneys do everything within their power to collect as many of the dues as possible.  What the community needs to remember is that foreclosures and bankruptcies do happen and there isn't anything that these three can do to stop them.  What we can all do though, is help out our neighbors and remember that even with hard times, keep paying your dues so your neighbors aren't paying for your water service, your trash service, and all of the other items that dues pays for.  By everyone paying, you will help keep dues from being increased to cover required write offs.

One question that A Vantage Properties receives, "What does the dues I pay cover?"

The monthly dues for The Townhomes at Red Hawk HOA include the following: water service, sewer service, trash service, insurance for common areas, snow removal, landscaping services, street maintenance within the community, electric for garage lights and street lights within the community, exterior maintenance, management company services, reserves for future repairs and replacements, and other miscellaneous items.

Did you know that if each homeowner needed to contract for their own trash and recycling services with a tote (trash can) the service would run anywhere from $15 to $20 per month?  So add that to the amount you would pay each month without an HOA including this as part of the dues.

If someone had a single family home the size and make up of each townhome, they would be paying an additional $25 a month (minimum) for insurance on the single family home.  So add that to the amount you would pay each month without an HOA including this as part of the dues.

Per Castle Rock's December newsletter, Town Talk, which was included with the water bills the HOA pays, the town of Castle Rock discusses the increases in their charges for service.  The charge for wastewater has increased by 14% for 2007 alone!  On their web site, the Town of Castle Rock discusses where their water rates are in regards to the entire Denver Metro Area stating that they are not the highest but in the top tier - Broomfield and Roxborough are higher than Castle Rock.  A base rate for Castle Rock single family homes in 2006 was $55 during non summer months and $100 during the summer months, making the average monthly water bill for a year $75 per month.  So add that to the amount you would pay each month without an HOA including this as part of the dues.

If you lived in a single family home and hired the "neighborhood teen" to mow the yard, the average charge is $25 per mow.  Over a course of a summer, bare bones minimum, you would be paying $500.  Divide that per month and at a minimum your average would be $42 per month paid towards lawn maintenance.  So add that to the amount you would pay each month without an HOA including this as part of the dues.

If you lived in a single family home and hired that "neighborhood teen" to now clear the drive and walkway for each snow fall, the average charge for an inch of snow would be $25 per clearing.  This one is a tough one to find an average as the season this year has not been average but per the television stations the average snow fall for the metro area is 35 inches.  With this average and a charge fo $25 per inch we would be looking at $875 total to clear snow, which divided over a year would be $73.  So add that to the amount you would pay each month without an HOA including this as part of the dues.

So far we are up to a total "cost" of $235 per month with dues as of this writing being only $150.  And we've not even talked about putting money away into savings for the roof that needs to be replaced every 15 years or so, or the exterior painting that will need to be completed every 5 to 10 years, or the replacement of trees and shrubs that didn't survive the winter, or the electrical for the garage lighting and street lights within the community, or someone to coordinate contracts and repairs, or tax preparation, or the repair and replacement of gutters, windows, and ...  If you were putting money away each month into reserves complete these items (capital improvement) you would be looking at another $144.50 per month.

Most people move into a townhome or condominium community for two reasons - the price to invest is usually lower (the price of the property) and the need to complete exterior maintenance is minimal.  I don't believe that people purchase a condo or townhome to loose their investment value because of neglect of the common areas or to get services for free.  With that in mind, currently, the owners of The Townhomes at Red Hawk are receiving a value worth $379.50 per month for only $150.  What a deal can be found in the dues at The Townhomes At Red Hawk Homeowner's Association!

As of April 1, 2007 dues for The Townhomes At Red Hawk increases to $175.  This is still a great deal!