"Inexperienced" Was The Kindest Way To Describe Us...
Dec. 3, 2008
Panama City, Panama
PLUS:
- First Rule Of HOA Due Diligence: Assume Nothing...
- Second Rule Of HOA Due Diligence: Actually Read The Documentation...
- Who Pays For Roadwork, Landscaping, Pool Cleaning, Security, And
Groundswork?...
- How Will You Stay In Touch? Practical Phone Advice For The Expat In
Central America...
- What To Do When Your "Works Everywhere In The World" Phone Doesn't
Work...
AND:
- "It's MuchA...Not MuchO...Your Spanish Could Use
Some Improving"...
----------------
Ready To Launch A New Life In Paradise As Soon
As You Can Figure Out:
How To Earn A Living Overseas?
Here's the answer.
----------------
Dear Overseas Opportunity Letter
Reader,
About a dozen years ago, friends and I
became accidental developers in Nicaragua.
Although we'd all been living, traveling,
doing business, and investing in property
all around the world for a long time at that
point, this was our first experience buying
a piece of raw land and developing it for
retail sale.
"Inexperienced" was probably the kindest way
you could have described us. We had so
little idea what we were doing that we
didn't think to establish a formal
HOA until we were a couple of years
into sales. What a mess, not only for us, of
course, but for our lot owners, as well. How
do you get a few dozen people to agree on
the particulars of things like maintenance
and security...not to mention budgets for
landscaping and pool cleaning...after the
fact? Yikes.
Don't make our mistake from the other side.
Don't buy into a development or a building
or any multi-ownership situation without
confirming, first, that there is a formal,
organized, and well-documented system for
the shared management issues and expenses.
Caribbean Correspondent Don Ellers writes
this morning with other good advice for your
HOA-related due diligence:
"Homeowner's Associations are political
entities. Typically, the executive board is
elected and changes over every year or
two. But you want to confirm this.
"Speak with owners who have already
spent money and time as part of the
development to get their opinion of how the
HOA has been managed. Pay attention to
complaints, as they are part of the
situation you would be buying into. You'd
like to know in advance, for example, if
maintenance has suffered...if work that was
promised has stopped...or if dues are
continually increasing.
"Also try to get a read on how much weight
the board members carry. Sometimes, they
become fixtures, meaning there can be little
chance of them leaving office and little
opportunity for a new regime. Ask
specifically how often the board's
executives turn over.
"If you're buying into the second or third
phase of a project, you should be able to
get a good read on how reliable and
accountable the HOA management board is.
Have they kept their word when it comes to
finishing work and maintaining the property?
If you're buying into the first phase of a
development or into a pre-construction deal,
on the other hand," Don cautions, "you may
have to operate on faith."
Ask about deferred maintenance and
extraordinary expenses. When we bought our
apartment in Paris five years ago, we knew
enough to ask about the HOA (it's called the
building syndic in French). We were
given the relevant documents, the name and
contact details of the syndic
management group, and the schedule of annual
fees.
However, no one told us about the ongoing
work to restore the façade and interior
courtyard of our 17th-century building.
During our first year as owners, we were
presented with two- and three-inch-thick
dossiers (the French like
documentation) detailing the work...and the
cost, which was broken into shares according
to the percentage of the building each owner
occupied. Our share was tens of thousands of
unexpected euro.
Furthermore, though I read French and we
were given full documentation of the
syndic we were buying into in Paris, I
have to admit, I didn't invest the time in
wading through the volumes of French
legalese.
As a result, at first, everything was a
mystery and a surprise. Would we be
attending the regular syndic
meeting that evening, a neighbor would ask.
What syndic meeting?
Had we cast our votes for the new syndic
board members?
There was an election?
Did we plan to participate in the annual
street party the owners organized each June?
Uh, well...yes, of course, we'd like to. But
what does that entail, exactly?
Our transition as new residents would have
been greatly eased had I taken the time to
read the documents or if we had engaged
someone else to translate them for us.
An HOA (syndic, building co-op,
etc.) comes with cultural and legal
distinctions. Don't assume you know what
you're buying into with your purchase in
Panama because you already belong to an HOA
in Nicaragua.
In fact, don't assume anything. Don't assume
that the fees you're quoted when you buy are
the fees forever, for example. What
allowance is made in the HOA docs for
increasing the regular fees over time? And
what irregular fees might you also be liable
for?
Likewise, don't assume that those fees cover
all the things you might expect them to
cover. Maybe they cover all groundswork...or
maybe they take care of landscaping around
the pool only, for example.
Maybe the developer is responsible for
taking care of all roads...or maybe the HOA
must maintain certain roads, either using
regular annual fees or through now-and-then
calls for additional fees.
Finally, don't forget the administration.
How will you pay your fees? Here in Panama,
our building fee was quoted as part of our
monthly rent...but we must pay it separately
and to a different entity. We write one
check for the rent each month...and a second
check, that must be delivered by hand, to
the building management group.
Kathleen Peddicord
-------- Special Offer
--------
Three Nights Free in Granada, Nicaragua's
colonial jewel. Come see the most romantic
city in the Americas as the guest of the
Condos de Xalteva. If you decide to buy,
your first year's homeowner's association
fees are waived.
Special
offer for Live and Invest Overseas readers
only
-----------------
TODAY:
"My AT&T 'works everywhere in the
world' phone," writes Guatemala
Correspondent Michael Paladin, "indeed works
everywhere...except Japan, Korea, and
Guatemala. AT&T suggested a SIM card
replacement, which I would have to get in
the States. They couldn't mail one to me for
some reason...
"Indian tech support suggested that the
phone was the problem, but it does, in fact,
work everywhere else. I maintain the problem
is the carrier.
"In this country there are three: MovieStar,
Tigo, and Claro. AT&T piggybacks on Claro,
with little or no success. I have a
MovieStar phone and a Tigo one, as well;
both are good throughout most of the
country, which has an extensive cell-tower
network.
"With Tigo, your minutes don't expire; with
MovieStar, they do, so you're continually
prompted to recharge to avoid running out of
time.
"On certain days, the different carriers
offer double or triple minutes for the cost.
They advertise these specials through text
blasts.
"You can pay more for roaming, but Nicaragua
doesn't talk to Costa Rica and Guatemala
doesn't either. I can't explain it, nor have
I heard any reasonable explanation offered.
Yes, we all speak Spanish, but our telephone
carriers seem to have their own language.
"I suggest a U.S.-based telephone for
inter-country traveling and a local mobile
phone for in-country use. Minutes are cheap,
the phones are inexpensive, and the ability
to reach out and touch someone at any time
is reassuring.
"When you move abroad, you want also to sign
up for an Internet-based phone service. I've
been happy with Skype, which can be used
everywhere and anywhere you have Internet
service."
MAILBAG:
"A few thoughts on your e-mail today
entitled 'Thanksgiving
Day in Mumbai.' Your editor
says, 'But we refuse to make decisions based
on fear. If terrorists--not to mention PAD
demonstrators--choose to make our lives more
difficult, or even to kill us, we have to
live with it.'
"I don't understand this statement. Yes, we
make decisions based on fear, like 'avoiding
hot spots,' as your editor mentioned a few
paragraphs before.
"And, no, we don't 'have to live with it.'
Especially if we're traveling, we can go
elsewhere. And especially if we have
children or others who depend on us, either
while traveling or back home.
"Unfortunately and realistically, some of
our decisions are based on fear throughout
our lives. But our attitude can still be
positive and open to new adventures."
-- Ron L., United States
***
"It is 'muchA'...'muchA
lluvia,' not 'mucho.'
"Your Spanish could stand some improving."
-- Oscar V., United States
Indeed, dear reader. We're working on it...
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