Benchmarking HOA Dues

According to Candy Evans, a respected real estate journalist, "there are buildings in Dallas that have HOA dues so high that they have a negative impact on unit value. There seems to be two types of buildings with high HOA dues... new luxury buildings crammed full of amenities that few use and some older buildings with fewer amenities whose costs are well above the norm".

Where does the Lakes of Bent Tree stand in the local area? To better understand this question, the board looked at the dues of fourteen condominiums, selected at random, and located in a quadrant defined by Frankford and Arapaho Road to the north and south, and Midway and Preston to the east and west. It was determined that:

the average dues rate for the sampling was $0.305 per square ft, per month; or
    $458 for a 1,505 sq. ft. home,
    $658 for a 2,159 sq. ft. home and
    $778 for a 2,554 sq. ft. home;

the median dues rate for the sample was $0.290 per square ft per month.

The Lakes of Bent Tree sits slightly below the middle of the pack at $0.288.

In 2020, LBT dues were 4% above the average for the area.
In 2021, LBT dues will be 6% below the average.

Admittedly, any survey that only looks at rates and square footage is not accounting for a multitude of factors. For example, the Bonaventure has more amenities than LBT including an onsite staff and a gym. Meridian Square is a new building and builders typically suppress dues rates to to sell their units at higher prices. Some properties do not have a savings plan for future capital repairs and, instead, levy special assessments when there are non-routine expenses.

What can be generalized is that is that older properties have higher expenses, smaller properties (i.e., fewer number of units) don't have the same economies of scale as larger properties, and the dues on properties without capital repair savings plans appear lower because they do not account for the large special assessments that are levied periodically when capital repairs are needed.

All considered (see other articles on association financials here), it's reasonable to conclude that the Lakes of Bent Tree dues are average for the local market.

Below are photos and links to the properties surveyed. The Addison Circle area is unique. In addition to being comprised of much newer properties with very different building footprints and grounds, there is a single builder/developer who has significant influence on the operations of many of the HOAs and has as a vested interest in keeping rates low to support new home sales.

Two newer Addison Circle properties had rates 40-46% below LBT (i.e., Meridian Square | 2013, District A Townhomes | 2005). Neither has a saving plan for future capital repairs.

The oldest property surveyed on Addison Circle (i.e., Aventura Condominiums | 2000) has a dues rate 16% higher than LBT.

The board has reached out to get a more detailed look at some Addison Circle financials to see if anything can be learned and adopted for the benefit our owners.

In closing, Evans recently summarized that "condo living has a lot of advantages, but it is not for everyone. Condo owning adds a cost that’s not factored into single-family home purchasers. For single-family buyers, a monthly nut equals mortgage, utilities, insurance, and taxes. There is no maintenance component – each owner can neglect or maintain as they see fit. In a condo, maintenance is a monthly fee. We know that, while a building and land can appreciate in value, HOA dues are fees that are not recouped at resale (the same as the costs associated with new water heaters and lawn mowing don’t add to single-family home appreciation either). Some people are uncomfortable paying a monthly HOA fee because it typically adds dollars to tight monthly budgets reducing what they can ultimately purchase."

Bonaventure Condominiums
$0.559 (94% higher than LBT)
See property here