If you are purchasing in a planned development, there may be a recreational facility, or one may be planned for the neighborhood. While such amenities are great, you must familiarize yourself with the facility, the management, and the documents pertaining to the facility. If the recreational package is planned but not yet constructed, find out what guarantees exist to insure construction. Builders and developers with the best of intentions sometimes get caught in adverse market conditions—such as the past two years—and find themselves short of cash. Good intentions will not construct a facility costing hundreds of thousands or even millions of dollars. Don’t base your purchase upon a wonderful facility that may never materialize. Talk to other homeowners and see if the projected date of completion has already been postponed.
It’s a good idea to speak to the president of the homeowner’s association if there is one is in place. Ask about repairs that may be planned or needed. Does the association have sufficient reserves to complete the work or will it be necessary to assess homeowners for needed funds. Such assessments are quite common and, in mandatory associations, participation is not optional. Associations have the power to place liens on any home where the homeowner refuses to pay and could even force the sale of a home to collect their fees.
Recreational facilities can be a source of pleasure and relaxation, but, improperly funded or managed, can be a financial nightmare for unsuspecting homeowners. Check out the physical and financial condition of the facility where you wish to live.
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