There is little discussion about HOAs and their financial state of affairs (in the same manner that the State of the Union failed to address current issues)! There are huge problems looming for them that will affect owners and tenants. Many HOAs are functionally insolvent. Despite the fact that they are required to maintain adequate reserves, many are out of cash and current assessments (even if paid) are insufficient to meet obligations and reserve funds have been depleted. On one hand, I can have no sympathy for them because they have dealt with owners and tenants in an arrogant fashion by and large. There are times when they should accept reasonable settlements in a short sale for example.
Many HOAs have been locking tenants out of amenities even though the tenant is paying rent and the rent is possibly going to the HOA or the arrearages are from the past and the owner is paying every month. Why punish the tenants?? This is an issue when realtors are negotiating leases for their clients, the client may not have access to amenities.
Many properties were built during the heyday period and are now needing maintenance such as roofing and other upgrades. Many HOAs do not have the reserves that were allocated to these repairs and upgrades.
The HOA problem affects many people - current owners and tenants as well as potential owners and tenants.
Another issue is that I believe when a property is in foreclosure, the leasehold value is lower and the rent should be lower than on a similar property that is not in foreclosure.
We all must watch this problem as it will become a HUGE problem in the near future..
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