The condominium concept as a form of home ownership is dated to as early as 200 B.C. evidenced by artifacts gathered in ancient Babylon. This was back in the day when walls surrounded our cities to keep unruly invaders out of them. The barbarians were plentiful, and living outside the walls was potentially a daily deadly battle in some form or another. The idea of a civilized society was and remains only a dream to many. As populations grew space came at a premium, however that was a pittance when it came to the value of your life.
The modern condominium concept in the United States was created for financial gain as early as the 1920's. The key was how to bundle it as a product recognized as an investment for the banks to be able to provide mortgages on them. It took another 30 years for the legal adaptations to take hold and by 1961 the concept became a reality. The stumbling block had not been so much the creation but the dissolution terminology. Unlike a marriage, what man has joined together must have the ability to be put asunder.
Today, I see condominium associations being dissolved through financial hardship. Whether it's liens or leniency neither action pays the bills being accrued by the associations. Investor owners, and I use the term investor lightly, have whittled away the desirable attributes of condominium ownership. Where a once thriving community may have had beautiful landscaping, a full service club, heated pools and an energized staff manning the amenities now only a skeleton crew remains to guard the common investment.
I cite this ruin as the result of distressed condominium properties owned by investors. Despite having the means in place to fully fund the assessments they refuse to do so. Tenants who pay market rental rates to the owners don't have the responsibility to the condominium association either. What were once well kept communities have been holding off this siege for some time and the walls have begun to crumble. Although regulations limit the number of allowable investor owned units in a given community that time was relegated to their initial purchase.
This observation is becoming more frequent and I suggest that you fully investigate the tenancy threshold of any association you are considering buying in to. These conditions take years to resolve although rates below 7% are good, 15% to 20% remain manageable and anything over 30% is nearly irreversible in my experience. Great property management comes at a cost but just like the "pittance" I mentioned earlier, you can depend on it to keep your lifestyle pointed in the right direction!
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