Shared by Deborah Goonan, Independent American Communities Blog
Here’s a report from Huffington Post Canada, about a Toronto condominium (strata) association – 40 Panorama Court – where owners will soon see association fees of $2000 per month. That’s up from the $1200 per month they are currently paying.
Think Your Condo Fees Are Too High? These Owners Will Be Paying $2,000 A MonthThe Huffington Post Canada | By William Alcopra
It’s the price owners pay when common maintenance is neglected for years, to avoid raising monthly assessments. Either you were one of the lucky owners that bailed out before assessment hikes, or you’re one of these unfortunate unit owners that now has to pay for many years of neglect.
What might have started out as an affordable place to live has now become totally unaffordable. Can’t pay? Then you will probably lose your condo to a foreclosure sale. It’s unlikely you’ll find a buyer if you try to sell, unless the buyer pays a low price to compensate for high assessment fees.
This isn’t the first time homeowners association members have had to cough up thousands of dollars in special assessments of monthly increases, and it won’t be the last.
Not long ago I saw a report about Embassy II Towers, a Fort Lauderdale Beach, FL condo association facing a $60,000 special assessment, also due to years of deferred maintenance and artificially low condo fees.
How can you avoid running into this problem? Before you buy, you can examine financial reports of the Association, particularly the Reserve Study, to see if it’s properly funded. You can also ask about the Association’s delinquency rate, to get a sense for whether or not owners are paying regularly. If you already own a condo or single family home in an owners association, you can also inquire about these financial matters. However, whether or not they will be addressed depends on who is serving on the Board, and what your neighbors are willing to do about saving up for long term repairs.
Sometimes a special assessment is needed to make repairs due to construction defects, as is the case for Signature Place in St. Petersburg, FL. The building needs $8.7 million in emergency repairs, which will cost owners anywhere from $10,000 to $132,000 apiece, based upon the size of their units. Although the case is currently being litigated, it’s unlikely owners will recoup their total costs to repair allegedly defective construction.
As a potential buyer, you might also investigate whether the developer has been involved in litigation regarding construction defects. But if the matter was handled through Arbitration, there won’t be any public record of the settlement.
In other words, no matter what you do, you may not be able to prevent being hit in the face with unexpected assessment increases.