A Christmas present for Condo Owners staring down at a special levy

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Education & Training with Harrington Homes Realty Inc

 

 

 

Some time ago one of the properties I managed was faced with a special levy payment of $10,000 each owner.

About half of the owners could write ouy a check, however for the other half of owners, 10K was a crippling cost, and to make things very bad, all the time the work was being done, which would take at least a year, from the start of the process of finding contractors to do the work until a certificate of Substantial Completion was issued to the Home owner's Association or Condo Corporation owners that manages the development on behalf of all the home owners, no owners can Buy or Sell their units as the bank will not finance or give loans against repair bills.

So owners are stuck UNLESS they use a Special Levy Buster.

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Topic:
Real Estate General Information
Tags:
townhomes
condo owners
condo act
special levies
owners associations
maintenance payments

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Rainmaker
4,210,874
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Robert, this can and does happen, and had a condo buyer this past summer receive a huge assessment.

Dec 08, 2016 12:36 PM #1
Rainmaker
37,783
Robert Harrington
Harrington Homes Realty Inc - Victoria, BC
Buy & Sell Homes by Phones

I was surprised at the lack of care most Property management companys have towards their clients.

They just say you guys have to raise 1M to top up your contiginy account because your depreciation report demands it, or in this case the developer screwed up and the problems showed up 3 years later, well past the 18 month deficency report time and I could not in good conscious just walk away and see people lose theri homes or be stuck not being able to sell.

So here is YOUR fix.

Co to the condo council or home owner's association..NOT the property management company and share with them you have a solution, a simple 5 year commercial loan, and then go to the idiot property management company and share with them that admistering the 5 year loan means they will keep that condo act development's business for 5 yeard as part of the loan agreements include the present mamgement company stays for the lenth of the loan.

AND IT GETS BETTER as you can insert yourself in as a consultant and recive 12K in fees from the commercial lender and MORE if you have any project managing expertise...AND BETTER as you wil be the one that SAVED the development and your sales will really rocket.

SO WIN! WIN! WIN! 
And be sure to have your project fees go through your own project account and DO NOT let your brokerage suck them up.

Cheers and I am so happy to meet a REAL full time Realtor® brand agent. 

Dec 08, 2016 05:15 PM #2
Rainmaker
37,783
Robert Harrington
Harrington Homes Realty Inc - Victoria, BC
Buy & Sell Homes by Phones

Just got your comment and if this client is also a friend and the special levy has been passed and she is stuck then to unstick them, then go to your friend and have her apply to go to the next Coop Council board meeting, oe ask her council or Housing Assoc to call a board meeting and propose she act as a committee of one or two to find a commercial lender.

She can start with contacting the development's lawyer as this always involves about 3 sets of lawyers, one for the development, one acting for the lender and another always seems to insert themselves acting for the people arranging the loan or arranging the terms between the engineering company who is going to do the job and everybody else.

The final interest rate will com in at 9% or will show 6% if all the upfront fees are not counted, but who cares as this is a straight up commercial loan with less interest in real terms than any 3.5% mortgage will charge.

 

There will also be upfront application fees of $20,000 to $50,000 depending on the size of the loan and the development will have to pay that up front out of their contingincy fund, however the prceeds from the loan will quickly replace it...and of course those up front application fees are where everyone, incliding yourself takes their referral fees.

When the project is ongoing make sure to have someone in charge to oversee the project because when hundreds of thousands of dollars are floating around and administered by your volunteer council members, the contractors are QUICK to take advantage to skate around parts of their contract, so you MUST ride herd on it or $25000 here and 50,000 there slips through the cracks and next thing you know you are over budget and amending your loan.

So the first one is hard as it is new, but once you have done one..WOW! Lots of business and do not run it through your brokerage as I found I did NOT own my own business, but my Real Estate Council did and those guys will want to get in and micromanage and find ways to charge you $950 a pop for extra audits. So simply form another company to do this or just take my experience and consult with your condo clients.

Cheers

and Merry Christmas.

 

Dec 12, 2016 07:20 AM #3
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Rainmaker
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Robert Harrington

Buy & Sell Homes by Phones
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