How do communities deal with members who can't pay their condo fees or assessments? | <– Date –> <– Thread –> |
From: Fred-List manager (fholson![]() |
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Date: Sat, 13 Feb 2016 04:12:32 -0800 (PST) |
Fran Schultz <fschultz [at] optonline.net> is the author of the message below. It was posted by Fred, the Cohousing-L list manager <fholson [at] cohousing.org> after deleting quoted digest and restoring subject line. Digest subscribers, please delete most of quoted digest and restore subject line when replying. -------------------- FORWARDED MESSAGE FOLLOWS -------------------- > How do communities deal with members who can't pay their condo fees or assessments? The COHO take on this question seems to be very different then the regular condo association take on this questions. As president of a condo board with 323 units we are wresting with this issue on a variety of levels. I say in advance this is not a cohousing point of view. It simply represents the issues and decisions our board has been wresting with. First - We have ended up with people essentially squatting in their units because they donʼt have the money and canʼt afford to move. While this is a tragic situation no association can stay afloat if you tolerate this for long. If there is a way to help the person get on their feet then great. But loaning such a person money is throwing good money after bad. So excuse me for stating the cold cruel approach. We have been exploring evicting that person, taking possession of the unit and then renting it to provide income to pay for the back fees to the association. Yes, there are a lot of issues associated with this. But at least in my state there are ways. Even if there is a mortgage on the property that hasnʼt been satisfied, you may be able to rent it for an extended period before the bank forecloses and sells the property for what they can get. In which case not the unit becomes market rate and the bigger problem goes away. You get an owner, you get your fees at least going forward, and the unit becomes market rate. Second - We look at whether or not the person has money they arenʼt using to pay what they owe. I would imagine this isnʼt the case ever in a COHO but trust me in the outside world it is. One of the tools we use to encourage people not to do this is to exclude them from any of the common area privileges - eg common house, pool, parking etc. Third - We have had to take a somewhat mercenary view regarding assessments and fees. Granted this is the non-COHO world I currently, but hopefully not for long, live in. Our complex is highly desirable. Regardless of the economic downturns our units have held their value within 90% of original purchase price, regardless of time purchased. Our units usually stay on the market less than 3 weeks unless they are incorrectly priced. So filling or selling a unit with a renter or purchaser isnʼt a problem. So if someone truly feels that they have been priced out of the complex we encourage them to move. I know it sounds heartless. I feel that way when it comes up, it hasnʼt happened yet. But, in a non-consensus non-COHO world, the association board has a fiduciary duty to the association. We really donʼt have a choice to either not raise the rates or issue an assessment if there are necessary repairs, maintenance or upgrades needed. Fourth- while its not an association option, this person could consider bankruptcy and a short sale which brings the unit back to market price. If the association or one of its members can afford to by the unit at short sale, then they can rent it, potentially back to the original owner so they can reestablish their credit, who can then potentially buy it back. This worked well for a people I know who lived through recession in Las Vegas where condo prices fell by over 60%. Fran Schultz fschultz [at] optonline.net
- Re: How do communities deal with members who can't pay their condo fees or assessments?, (continued)
- Re: How do communities deal with members who can't pay their condo fees or assessments? R Philip Dowds, February 12 2016
- Re: How do communities deal with members who can't pay their condo fees or assessments? Elizabeth Magill, February 12 2016
- Re: How do communities deal with members who can't pay their condo fees or assessments? Sharon Villines, February 12 2016
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