Why HOAs Should Consider Owning Their Golf Courses?

We’ve observed several HOA’s of late that find themselves in a tough situation. The club amenities, often owned by a third party, are struggling financially. The owner cuts operating budgets, defer maintenance and delays capital improvements. Even worse, the owner threatens to (or actually does) close the golf course and the ancillary amenities, allowing the infrastructure to go fallow and attempts to redevelop and/or repurposes the facility, leaving the community without the recreational amenities they thought they would have forever when they purchased their home. 

Unfortunately, there are many communities where third-party club ownership of the club isn’t maintaining the ancillary facilities to the level consistent with homeowners’ expectations. The focus of the homeowners and HOA  shouldn’t be on battling with the club owner. Rather, the focus should be on gaining control (purchasing, if necessary) of the club and its amenities.

The HOA property management must take an active interest in the residential club management. The HOA needs a plan. If possible, the HOA should be proactive and negotiate a purchase and/or contractual rights to purchase the club and the club management services. The homeowners have way too much at stake. The potential loss in value to homes is likely to far exceed the potential assessment to each homeowner necessary to acquire the club.

The math behind a potential acquisition is often pretty simple. How many homes are there in the community? If the club fails and no longer provides amenities to the community, how much real estate value will be lost? If there are 400 homes and each loses just $25,000 in value ($10 million), it may well be worth each homeowner (or the HOA) coming up with some amount to protect and preserve their property value. Of course, every community is different, but the numbers usually support community acquisition of the club, sometimes even if the price exceeds the market value of the club.

Given the considerable negative publicity about golf courses and clubs, many HOA’s resist club ownership with many residents simply complaining that they don’t play golf. The majority of homeowners typically do NOT play golf. However, they benefit from the added value the club imputes to their homes and thus should be willing to support the club. If they’re not, what is happening across the country could happen anywhere. Don’t wait until it’s too late!

ONE Source from Associa Management can provide assistance in HOA property management and direction on how to manage and overcome these challenges.


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