Our nation is experiencing unprecedented foreclosures and defaults in our communities.  These foreclosures can greatly impact a community that is governed by a Homeowner Association and who rely on all members paying their dues.  Recently I read about a community in Florida, Brittany's Place , where only 12 of the 96 units are paying homeowner's dues due to foreclosures and other financial problems.  The 12 homeowners are now being asked to pay special assessments to cover the cost of the community's operating expenses and basic maintenance.  It is reported that the assessments now are so high that the remaining homeowners may be driven into default and foreclosure themselves.

Foreclosures hurt everyone and can ruin the new and resale markets in your community.  Often times the banks that control the mortgage don't pay the HOA dues until they actually own the units and we know how long that can take.  This problem can be compounded by owners who haven't been foreclosed upon yet, but stop paying their HOA dues when they see what is happening around them.

Here is a list of items you might want to ask your real estate agent to find out for you:

1. Ask to see the HOA rules, regulations, CCR's and HOA budget and make sure you can live with the rules and finances.
2. Check to see if the reserve funds in the HOA are adequate.
3. Ask how many units are behind in their HOA dues.
4. Find out how many units are in foreclosure or default.
5. Inquire about impending special assessments.  Ask about previous assessments, when, how much and what for.
6. Find out how many vacant units there are and who owns them - does the developer own many still?
7. Research the reputation of the developer - do they have a track record of seeing their developments through to completion?
8. Check out the neighborhood and find out what might be developed nearby.

If there are a sizable number of units in default or foreclosure and not paying their dues, you may want to reconsider your purchasing a home in that development.  No matter how great a "deal" it is, buyers cannot afford to be in a community where only a few pay the expenses for the entire community.  Due diligence is crucial before buying in a development with a Homeowners Association.