What will happen if your condo association goes bankrupt?

By
Real Estate Appraiser with Kathleen Bryce, Inc.

What is going to happen to the values of condominiums when the homeowners association goes bankrupt?  We hear about foreclosures, but those are just the tip of the iceberg.  As developers begin to walk away from unfinished communities, or refuse to continue to contribute to the HOA many condo owners are going to be facing enormous costs to continue to maintain their common elements.

Is your appraiser examining the condominium budgets or doing the research necessary to determine if there is any pending or ongoing litigation?  Make sure your buyers are getting a sound investment and look carefully at not only the condo, and it's market but the health of it's Association.

News-Press.com
Condos cause conundrum
By DICK HOGAN • dhogan@news-press.com • September 25, 2008

Unit owners resist paying extra expense 

Buzz up! The developer of half-built Prentiss Pointe at Winkler and Summerlin roads in south Fort Myers wants the 50 condo owners to pay for all the community's operating expenses. 

They're fighting back with protests to the state Division of Condominiums, saying that developer Prentiss Pointe Ltd. is obligated to pay its share of the expenses. 

Gary Howe, managing partner of Prentiss Pointe, couldn't be reached for comment but condo owner Marilyn Boyer - who has the only non-developer seat on the condo association board - said he's told residents he's broke and can't pay.  Click here for the rest of the story 

Kathleen M Bryce
St.Cert.Res.REA RD-4424
http://www.leecountyappraisals.com
appraiserkat@earthlink.net

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Will Nesbitt 11/21/2008 10:13 PM
Topic:
ActiveRain Community
Location:
Florida
Groups:
Mortgages
Investors
Posts to Localism
Lee County Realtors
Tags:
foreclosures
condominium
hoa
homeowner associations
florida

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Rainmaker
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Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Katheen

There are two questions here with today's market conditions. First if a new condominium building goes bankrupt with unsold units. In bankruptcy court the real estate taxes have to be paid for all the unsold units, a mortgage holder will bid and buy the assets and the other entire lien holder are out. Once the bank owns the building they will responsible to paid the expenses from that point for the units they now own which would include taxes and HOA expenses. The developer can also do a special assessment for the short fall. Regarding a resale building the HOA has a budget in the event of a short fall or additional expenses as we have seen with the hurricane damage the HOA will do a special assessment. I hope this helps you.

Good luck and success

Lou Ludwig

Oct 15, 2008 12:03 PM #1
Anonymous
Angel Thornton

Our Association is in bankruptcy court. The have the same knot heads handling the situation and they want to raise the Condo fee fifty dollars more. The problem is poor to nil management skills, and yes there has been theft within the office. If you weren't a pack rat like myself there was no way we could prove that you paid the fee. The said we could and should drop our fee into the mailbox at the office, because they were seldom there. What are we suppose to do when this happens? What is our recourse if we don't want the increase? Can they foreclose on our unit?

Sep 19, 2009 04:58 AM #2
Anonymous
Bob

I own five condos as investment property with no mortgage.  I have all units rented.  The association because of mismanagent ( deferred mantainence and misshandling of funds)  is upside down financially.  Than i know of one roofing company is owed m oney and one bank loan.  If they either get taken to court or dont have enough collections from dues and assesments ( 30% not paying) what could happen to my units ?  Chapter 11,7 or if someone could push an HOA forclosure ?

 

What options do i have ?  I cant walk away from a loan I own them.  Needless to say i am pissed at these sleazy investors that own a controlling percentage and wont manage right.

Nov 02, 2009 01:02 PM #3
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Kathleen "Kat" Bryce

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