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Condo and Townhome prices shot thru the roof!

By
Services for Real Estate Pros with AIG, Allied, Fireman's Fund, CNA, Travelers,The Hartford, Pr

Our Condo and Town-home prices had shot through the roof these past few years and with so many HOA's getting into trouble with lack of funds, it has increased the chance of Owners being further burdened with assessments that they cannot afford.

There is an opportunity for owners to add assessment coverage to their Insurance policies.

It's a very reasonable rider and whenever I write a Condo or Town-home policy, I always ask the owners to check the soundness of their HOA reserves. Look at the age of the roofs, plumbing, electrical, swimming pools, age of the buildings (many HOA's repainted and put in new landscaping to lure new buyers, w/o upgrades to electrical/HVAC/Plumbing/Sewer or building code).

Does the HOA have Flood or Earthquake coverage? 

Many people buying smaller places are retired and do not anticipate a major increase to their monthly payments. A major loss with an insolvent HOA could leave them homeless!

Is the HOA solvent enough to cover a major loss or will the new owner have to pay? There is coverage available.

Comments (3)

David A. Podgursky PA
THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL
THE PODGURSKY GROUP - Make the Right Move!

good information...

 

when I learned about this, I was in the middle of a commercial loan and come to find out the commercial condo association barely had enough flood coverage to deal with any potential damage... the lender required the coverage be raised to a minimum of $500,000...

good info

Nov 24, 2007 03:56 AM
Jeff Kessler
Austin Homes, Realtors www.OwnAustin.com - Austin, TX
Broker,CLHMS,GRI

Very good advice.  I have been selling Condo for over 10 years and I have seen a lot of crazy stuff. Making sure you have a lot in reserves is key to a condo purchase.

J

Nov 24, 2007 04:09 AM
Terri Habecker
AIG, Allied, Fireman's Fund, CNA, Travelers,The Hartford, Pr - Dana Point, CA
Life Matters & So Does Your Insurance Co

David, was the HOA able to get the added coverage?

Jeff, I am amazed at how little the owners know about their HOA- I leave them with the questions because they have to get back to me. I'm not trying to sell them additional coverage for my benefit, the average cost to add accessement coverage has been about 14.00 a year. It's a critical coverage and not to be ignored. You are doing a great job keeping your buyers informed.

  I've received several e-mails from AR readers regarding this issue and I really appreciate your support.

Nov 24, 2007 05:12 AM