After the Final Public Report is issued, and the master documents are disbursed, the DRE file here at CBS is suspended, in case any issues or questions arise after the fact. Many of the common questions are, “what happens after sales close?”
- When the first sale closes in a common interest development, the HOA springs to life. Assessments are due for collection on the first day of the following month.
- Two bank accounts must be created if they have not already, for both the monthly Operating Costs, as well as the Reserve funds that will be accumulating each month.
- The insurance policy(ies) required by the CCRs must also be in place at the time the first escrow closes.
We sometimes see the Developer attempt to “self-manage” the HOA, which is a cost-saving strategy but often ends up creating more liability and problems down the road. In these situations, the dues are either not collected, or only one bank account is set up. Rather than collect dues, the Subdivider takes on the role of HOA maintenance, insuring a higher standard (at less expense) than the HOA budget allows. Unfortunately, this arrangement may be considered a “Subsidy,” which could create a problem for the Subdivider, resulting in funding the HOA for the maintenance already provided! If you (Subdivider) suspect you may prefer to self-manage, please let us know before the Final Public Report is issued! There are work-arounds that can save you a lot of grief.You’ve closed the first sale… What’s next?