Questions Those Buying, In A Senior Community, Should Ask

In many areas, of the country, one of the fastest – growing, components of the housing market, is Senior Housing, often created, either limited to those over 55 or 62, and, often, set up, as a Home Owners Association, or HOA. For many, this is a smart move, because of the security, maintenance, social, etc, aspects. With that in mind, this article will attempt to briefly review, consider, and discuss, some of the questions, a potential buyer, should ask (and be satisfied with the answer), prior to purchasing.

1. Reputation of builder/ developer: Has this builder/ developer, developed this type of housing, before, and what is the feedback, and the reputation, for quality, etc? Has that organization, kept its word and promises, and built, using quality products, and exceeded expectations?

2. What was this site, previously? Are there any environmental considerations, etc, which are relevant, to safely, living somewhere?

3. Who will serve on the Board of Directors, how will they be elected/ selected, the term served, and powers? Some groups (most) elect and are served by a volunteer Board, but who will administer, the day – to – day, operations of the houses and common area?

4. Maintenance charges/ fees: How will these be determined, and what will be covered? Will the annual budget be voted on, and what will be the rules? Who will be the administer, and will developer, take care of this aspect, until a certain percentage of the units are sold, or when? Will services, such as snow removal, lawn maintenance, exterior maintenance (including painting, roofs, etc), be included? What, specifically, will be considered, common charges, as opposed to, the responsibility of the individual owner?

5. Security: Will the community be gated, to restrict unwanted visitors, and enhance security, etc? Will these costs be included in the common charges?

6. Facilities: Will there be a Clubhouse, recreational facility, common meeting spaces, etc, built by developer, and for how long, will developer, assume responsibility, for maintenance of these items?

7. Material defects/ issues: What will be the developer’s responsibility for material defects, issues, etc? For how long? Will there be an escrow account, or similar, to protect, owners, in this regard?

8. Neighborhood: Check into issues, such as safety in the area, convenience to transportation, shopping, etc?

9. Local courtesy van: Will developer pre – purchase a new, courtesy van, for the exclusive use of owners, to take them to key locations, such as food store, pharmacy, train station, and other key places? Will this be deeded to the Home Owners Association, once the occupancy, reaches a certain level?

The better you are informed, the better you will do. Ask questions, and demand realistic, relevant, sustainable answers/ responses.

What Is Community Infrastructure District ("CID")?

The Background of CID – As the development of real estate continues to expand in Idaho, the impact caused by such expansion requires the necessary construction of public infrastructure to accommodate such growth. In 2008, Idaho legislature enacted the Idaho Community Infrastructure District Act (“Act”). The purpose of the Act was to create new mechanism for the financing of public improvements for the public agencies and developers alike. The Act, styled after similar legislation in New Mexico and Florida, addressed a critical issue of how to pay for new public improvement burdens in a cost effective manner. The Act authorizes bonds to be issued and repaid with a mechanism that taxes or assesses the land benefiting by the new public improvements. This provides for much needed community development which may otherwise be infeasible due to the significant costs imposed by the extensive public improvement burdens. At the present time, a Community Infrastructure District (“CID”) is allowed in an incorporated city or in the county if within the City’s comprehensive planning area and the city consents to the CID formation. The Act allows for the issuance of general obligation bonds, special assessment bonds or revenue bonds or any combination thereof. The projected annual assessment, tax or revenue stream secures the repayment of the bonds.

Eligible Public Improvements Available For CID Financing

  • Water Improvements
  • Sewer Improvements
  • Flood Control Projects
  • Roadways
  • Public Parking Structures
  • Landscaping and Lakes
  • Lighting and Traffic Control
  • Parks
  • Recreational Facilities
  • Public Safety Facilities
  • Financing Costs
  • Real Property Interests
  • Development Impact Fees

A sound CID should be established with the following overall objectives in mind:

The real estate developer’s financial goals should be met whenever reasonably possible since their project and its customers will be repaying the borrowing costs of the CID financing so long as it does not present any undue credit risk;

The real estate developer should use an experienced consultant to assist them in understanding all available options when going through the CID process;

On larger development projects, the CID financing should be structured to allow for multiple bond issues at different points in time and improvement areas should be employed to minimize the financial obligation on unimproved or underdeveloped property; The particular development project characteristics or constraints should be understood so that relevant risk associated with the project’s development and its ability to repay bond debt is clear. Examples of this are environmental constraints, infrastructure constraints, and private financing caps;

The legal and engineering side of the construction and/or acquisition of the improvements should be understood if tax exempt bond financing is being used. More specifically, the specific construction related guidelines and procedures should be spelled out when a real estate developer is constructing the public improvements and seeking reimbursement from CID bond proceeds;

The estimated annual cost and the maximum annual cost of the CID financing to the borne by all property owners involved in the development process needs to be fully understood and properly disclosed; and

The project’s appraised value needs to be properly performed consistent with sound bond underwriting and appraisal practices because the CID bonds are ultimately secured by the projects value. The appraisal instructions should be clearly defined from a CID bond credit perspective. For example, if bonds are being issued on an appraised value that assumes the project has unimproved lots with no performance guarantees at the appraisal date, then the appraiser has overstated the value for the value-to-lien ratio.

For more information in properly establishing a CID please contact http://DPFG.com