“One of the best things [the HOA] did was to start early,” says Brian Leasure, who owns a house in the community and is also the on-site realtor. That gave the HOA plenty of time to have a reserve study done and to adjust the dues accordingly. “By doing it a couple of years before the turnover, there was no big homeowner’s increase at the time of the turnover.”

Ask questions
As obvious as it might sound, it’s important to figure out what exactly is being turned over and what condition it’s in. When will the tennis courts need resurfacing? Is the boiler in the clubhouse on the verge of breaking down?

“One of the things we learned—after the fact, I’m a little sad to say—is that typically most of the equipment a developer has—the lawnmowers, the tractors, the gators, even the lightposts—is leased,” says Coupe. “Unfortunately the transition board we had at the time didn’t account for that. They assumed we were getting all this equipment as an asset. Now we’re paying leases on all this stuff.”

It’s not incumbent on the developer to volunteer all this information. He is required to provide an accounting that’s honest, but he’s probably not going to remind you of the all questions you’ve neglected to ask. You’ll want to know about the membership structure: Desert Highland’s Waldron counsels against having many different membership levels, which leads to class warfare. Social members aren’t going to be happy if they’re expected to help refurbish the bunkers on the golf course. And what provisions are made for emergencies or unforeseen shortfalls? What happens if the golf membership falls below the level needed to maintain it? What about capital improvements?

“You may see that the fitness center is very crowded or that when they try to have parties they have to limit the attendance because the clubhouse isn’t big enough,” says Vain. “That means that somebody’s going to be coming to you in the next few years saying, ‘We need to expand the clubhouse, it’s going to cost X, and we’re going to have to pay for it.’ You don’t want to buy an expensive home in one of these developments and find out that you’re being assessed for the turnover or that the dues have doubled and suddenly your retirement dream is getting chewed up because of a shift in finances.”

Get help
As a property owner, one way to protect your interests is to hire a consultant who’s familiar with all of this. It’s a complicated business, so it might not be enough to elect lawyers and accountants to the transition board, though that’s not a bad start. Owners could hire a consultant like McMahon or an experienced general manager who knows the tricks and pitfalls. Again, you’ll want to make the hire early and, if possible, retain him or her for several years after the transfer.

Another great source of information is the homeowners at other communities built by the same developer. Tom Harris, director of marketing and sales at Bright’s Creek, goes out of his way to introduce potential buyers to residents of the company’s older community, Forest Creek Golf Club in Southern Pines, North Carolina.

Above all, don’t be reluctant to ask questions about the process, and don’t become so starry-eyed by the community that all the wariness and good judgment that got you here in the first place evaporate.

“That’s the biggest mistake a buyer makes,” says Harris. “Getting so emotional about a pretty piece of land or a lake site that they don’t ask the questions about whether this is going to be a good community five years from now.”