COLUMN: Residents charged for undeveloped amenities

Q. I recently moved into an association where there is a $49 monthly fee for a gated entrance, pool, common lights, and tennis and basketball courts. Currently, however, there are no such amenities, although I was assured they would be in place before I moved in.

Is it right for residents to pay for amenities that do not yet exist? We've been told that this fee is funding the reserve. That wouldn't bother me if the future homeowners, who will move in after the amenities are completed, are charged a fee to fund the reserve as well. Perhaps, I'm overreacting. What do you think?

A. In a new association, there is the possibility that all of the amenities will not be completed.

The money you pay each month that is not being used to support the operating expenses of the amenities can be transferred into a savings account that will benefit the association in coming months. These funds are not necessarily reserve funds. Generally, a developer requires a certain amount of money from each homeowner at the time of closing that is categorized as reserves and placed into a reserve account (separate from the operating account).

Future owners will be required to pay toward the reserve funds at the time of their closings. They will probably not contribute any additional funds, other than regular dues.

Five years from now, when your reserve funds have increased through owners' annual contributions, new owners will benefit, even though they have not contributed to these funds, other than through their initial reserve contributions and any future contributions. Are you going to ask them to contribute their share of the reserves for the last five years?

One benefit for owners who sell their homes is in the marketing of their property, because the association is properly funded. As new buyers become more savvy, they will first consider associations that demonstrate financial strength.

Also, as the builder adds new phases to the neighborhood, the new homes will, in general, have a higher sales price. As a result, your home may enjoy a higher appreciation in value than the later buyers because of the difference in sales price.

Q. Since moving into my townhome in 1990, I've had problems with tree roots under my unit. In the common area in front of my unit, there are two large trees, one of which has visible roots going toward my main drain.

Plumbers have said that the problem is under my unit and suggested that a camera be placed in the drain to locate the problem. They said this will cost at least $150, and if they have to jack hammer parts of my unit, the cost could be as high as $3,000, which I can't afford.

The association claims to be responsible for the main drain only and nothing under my unit. Is this correct?

A. Since the tree is in the common area, the association should have the tree removed and the roots cut at their expense. This would eliminate any further damage.

If your drain is actually broken (the water bill would significantly increase) or if the floor of your home has heaved upwards, the association should pay for the repairs to the unit as well.

Unfortunately, this kind of problem is probably not covered under the association's insurance policy.

Questions for Barbara Holland may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759.

Barbara Holland, Certified Property Manager, is president and co-owner of H&L Realty and Management Co. She is a member of the Institute of Real Estate Management and is the author of two books on the subject. Holland is a past president of the Greater Las Vegas Association of Realtors.

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