The clock is ticking. It’s an alarm clock and the timer has already started.
On September 10th, 2021, the Boards of HOA1 and HOA2 signed a new 8-year Reciprocal Use Agreement (RUA) for our two SaddleBrooke communities*. After nearly a year of intense negotiations, not much changed from the old RUA. In a nutshell, all SaddleBrooke residents are still allowed to use all the amenities and facilities in SaddleBrooke (those of both HOAs), just as we could when most of us bought our homes.
It’s hard to imagine what life in SaddleBrooke would have been like if the RUA negotiations had broken down. Everyday residents cross from one HOA to the other for recreational and social activities. Daily routines for many of us would have changed significantly without an agreement. Fortunately, with just a few weeks to spare before the old RUA expired, an agreement was reached.
Many residents don’t realize that both HOA Boards have the option to either terminate or ask to renegotiate the deal on or before the 7th anniversary of the agreement. That means that we could be in for another round of negotiations prior to September of 2028. The same arguments over fairness will probably arise. But next time, the outcome could be very different.
Currently, there are 2,061 homes in HOA1 compared to 3,127 in HOA2. By 2028, HOA2 will have grown even larger as Robson finishes building out his remaining lots. More homes will provide HOA2 with more money in Community Improvement Funds (CIF) and annual revenue. More money means more flexibility to build and add more amenities. It also means more residents using and wanting HOA2- funded amenities.
In other words, it’s possible that HOA2 might not need HOA1 anymore. They already own the pickleball courts, softball field, Desert View Theater, and dog park. They have their own restaurants, golf courses, tennis courts, and pools, and, if they chose, could build their own tennis center, billiards hall, and bocce ball courts. The clear and present danger is that HOA2 might reject future RUAs with HOA1.
And, while an HOA2 Board down the road might realize that there are significant benefits to having a reciprocal use agreement, their increasing financial power will certainly give HOA2 more leverage in future negotiations.
What does this all mean? Well, because it costs to maintain amenities and facilities, HOA2 could insist that HOA1 residents pay extra fees to play pickleball, go to the dog park, or use the computer club. As HOA2 expands with potential future amenities, like building a multi-use activity center or indoor swimming facility, more fees for non-HOA2 residents could be imposed. Access could even be denied.
If you doubt this is a possibility, take a good look at HOA2’s original proposal to HOA1 at the onset of the last RUA negotiations which you can download by clicking here. HOA2 clearly demanded the ability to charge HOA1 residents additional fees if the HOA1 Board didn’t contribute to future capital improvements
What is the worst case scenario for future negotiations? We could have a complete breakdown of a reciprocity system that homeowners have relied on for over 25 years. Residents and home values would be harmed. And the growing divisions that we see are seeing today between our two communities could become systemic with little hope for a cure.
The clock is ticking SaddleBrooke. And, the pending alarm will not be a notification that it’s now time for our representatives to start talking. It will be our signal that time may have run out.
*For a more in-depth analysis of the final signed RUA Agreement from 2021, please click here.