How Much Do You Spend On Your Car?

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

How Much Do You Spend On Your Car?

You did not have to do anything in 5 years? Didn't even change the oil? Great car. I am buying it.

Funny, isn't it?

But people spend way more money on a condo-hotel than on a 20 –year old car just because there were no oil change Special Assessments.

I got a call from the agent today and she was asking about Fountain Beach Resort, which is an oceanfront condo-hotel in the heart of Daytona's Beachside.

She wanted to know how many Special assessments and for how much were in the Fountain Beach Resort in the past 5 years.

I am getting these calls all the time. This is yet another guru, who will BS her client about the assessment. It is simple logic.

Fountain Beach Resort Daytona

No assessments - good. Assessments - bad. Even in the past, because thinking about it ... donna wanna...

Let me clarify the concept of assessments for condo-hotels. Basically, Special Assessments happen when there is an expense, that was not budgeted and for which there either no or not enough insurance money.

Example: the city tells you to bring electric to code, and it will cost $150K, and this was not an item in the reserves (which may or may not even be in the resort), so the work is done and every owner is assessed his/her fair share.

That's how in general it works. Every reasonable person should understand that Special Assessments are part of condo ownership, and Special Assessment may happen and WILL happen at one point or another.

There are three instances (at a glance) when it happens. One, physical condition of the building. There is a problem, and it has to be taken care of. Unpleasant, but you usually at least know that it is coming. It is not a bolt from the blue.

Another instance is when a person in wheelchair got stuck in your restroom, which does not exactly conform to ADA requirements, and s/he is suing the association. Not conforming to ADA is not covered by the insurance, the Association needs to hire an attorney, and pay the Settlement or judgment, so they will have to assess everybody and make them pay their fair share.

Then, there may be a situation, when condo owners lose their jobs, and stop paying their Association dues (also called «assessment» but do not confuse it with Special Assessment). If the resort has more than just a couple of these guys/gals, you now don't have enough money to pay for the utilities and services, and have to assess those who pay, to cover the gap.

So, how about the assessments for the last 5 years? What is the value of this information?

None, zero, zilch, nada...

I could understand if the question was about what has been done to the property in the past 5 years.

Fountain Beach Resort DaytonaLet's say, new roof, new 220 electric, and now the resort is up to code; balconies fixed (concrete work and then sealed), which will extend their useful life for another 15 years, etc.

At least this gives useful information. But knowing that there were 3 or 5 or 7 (just throwing the number) assessments, without knowing what has been done, is useless piece of information.

But my dear local agents derive something from nothing. For them if there were no assessments, means that it is a good buy. And if there were many assessments, it is a bad buy.

Well, it very well can be the opposite.

You haven't been sick for the last 5 years? Oh, this means that you are in great  physical shape and you are not going to get sick ever...

Funny?

But this is the logic used by many real estate agents. Do they ever change oil in their cars?

Units sold in Ocean Walk in Daytona BeachIf you are looking for an alternative to vacation condos, condo-hotels can be for you. To know whether they are just call me 386-405-4408.

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Rainer
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Greg Gillespie
GumTree Realty / Genesis Realty Services,Inc - Tupelo, MS
CRS / Broker Owner

Good post....

It makes one think...

Have a great week end...

Feb 25, 2012 05:02 AM #1
Rainmaker
571,618
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Jon,  Buyers should keep in mind that special assessments generally are voted on and approved by the board or association of the building.  That board is made up of owners who are trying to maintain the condition of the building.

Feb 25, 2012 05:12 AM #2
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Thank you, Greg

Feb 25, 2012 05:29 AM #3
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Bill - thanks for a good point. And they are not trying to gouge them, they are the ones who also pay.

Feb 25, 2012 05:30 AM #4
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Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

Would FAR prefer having a roof assessment, than a condo association that is "happy" with a leaking roof.

Feb 25, 2012 09:35 AM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Doug - we all have our preferences (LOL)

Feb 25, 2012 10:26 AM #6
Rainmaker
743,574
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

Having lived in a condo, although not a condo-hotel, I am familiar with assessments, nevertheless. Examples 1 and 3 are common but I would not have thought of example 2 so that was a good one. You're right. A number means nothing but knowing what has been recently fixed means much more. Suggested.

Feb 25, 2012 11:32 AM #7
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Jill, Thank you...

Feb 25, 2012 01:21 PM #8
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Great analogy, Papa Jon!  I'd much rather see prior assessments which tell my buyers that there is an active HOA (of which he/she will soon be a member) and that they care about the standards of the building.  It is good to hear that there is a good back-up in reserves--which is my main concern.  No reserves is not good in an association!

Feb 26, 2012 12:26 AM #9
Rainmaker
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Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Having never owned a condo, I wasn't familiar with the term....but in my simple understanding of it, I would prefer to know that work has been done and the condo association is maintaining the building.  No assessments to me would mean some are going to be due to happen or nothing has been done to maintain the building.

Feb 26, 2012 01:02 AM #10
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Debe - it is a phenomenon, where usless information is a sign of agent's acitvity.

Feb 26, 2012 11:48 PM #11
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Sharon - it is really a bit more complicated, as maintenance fee can be set so that you accumulate enough funds to tackle practically everything, but buyers often see it all as some third party trying to gouge them, while it is the asssociation of owners decides on them because of the necessity, not because someone is using your money to do something wildly not needed

Feb 26, 2012 11:50 PM #12
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