Most of the Phoenix 55 plus active adult communities, with the notable exception of PebbleCreek, have some sort of Community Enhancement Fund. It has other names – Capital Improvment Fund being a familiar alternative. But in each community, regardless of what it is called, the overall purpose of the fund is pretty much the same – a set of monies that is dedicated to improving or enhancing the community’s resources. This is separate from both a reserve fund – which handles maintenance issues, but not new facilities or upgrades – and an operating fund, which funds the day to day operation (things like landscaping and salaries…). In PebbleCreek the reserve fund and the operating budget are funded by HOA dues (about $2,500 annually in 2019).
On January 16, 2019, our board of directors, in effect, authorized a community-wide vote to change the PebbleCreek CC & Rs (Covenants, Conditions and Restrictions) to put a Community Enhancement Fund in place. Monies for the fund would come from a “buyer fee”, equivalent to one year of HOA dues paid by the buyer at closing (of course, the fee could be negotiated between buyer and seller – but the ultimate responsibility would be the buyer’s). This fee would be in addition to the $400 that is already charged at closing by the HOA to manage the transfer of the property.
The community will be voting over the next couple of weeks and my strong expectation (I have been wrong before!) is that the effort will succeed and PebbleCreek will adopt this fee to be effective as early as July of 2019.
Things to Think About
- For most buyers and sellers, there is very little to think about. The local communities have similar fees and with all of the costs of moving/buying/selling, an extra fee of $2,500 amounts to a negligible percentage of the entire transaction.
- For some buyers – those who know that they want to move here but are not sure of timing – avoiding this fee may be an incentive to buy prior to the fee being implemented. $2,500 can buy a lot of moving boxes!
- Likewise, sellers who are ready to put the house on the market may find it advantageous to do so now and avoid having this new fee complicate the transaction.
It is important to stress that this fee is not unusual. As buyers preview HOA communities in Arizona it is critical to look over – and understand – the HOA Addendum that is part of any contract here. In so doing, it will be clear that this fee – if and when implemented – will put PebbleCreek in line with our neighboring communities as it relates to closing costs for new buyers.