The Worthington, Marietta, faces huge financial challenges
By Deborah Goonan, Independent American Communities
Here’s another typical “affordable” condominium residential community near the end of its life cycle – The Worthington Condominiums, located in Marietta, Georgia.
Cobb County records indicate that The Worthington consists of two buildings at 1960 and 1962 Spectrum Circle, both constructed in 1985. There are 188 units in two 7-story buildings, available in several floor plans with one to three bedrooms.
Active listings of units for sale range in price from $75,000 – $130,000 per unit.
A website for the association contains links to governing documents filed in 2002, and subsequent amendments in 2011 and 2012, indicating a likely apartment-to-condo conversion at the height of the real estate market.
The Worthington website appears to have been last updated sometime in 2016, noting that the official rental policy at the time capped rental units at 25% of total units, or 47 units.
A project updates page notes the association’s plans to replace the roof, the building exterior, complete a conversion to LED lighting, and repair or replace the elevators.
However, the web page also acknowledges that more than 25% of units are leased to tenants, and that the association faces a problem with uncollected assessments.
In two recent media investigations, Lauren Pozen of WSB-TV2 in Atlanta reports that one particular owner-landlord, Samuel Lloyd, rents out 78 units in the condo association. According to Pozen’s report, the condo association is involved in litigation with Lloyd to collect $170,000 in unpaid assessments, but Lloyd has just declared bankruptcy.
Of course, that makes it next to impossible for the condo association to collect sufficient funds to begin extensive repairs and to address their very long list of deferred maintenance projects.
In the meantime, Lloyd’s tenants have been told to pay their rent directly to the condo association.
But tenants complain of broken heating and air conditioning systems, water leaks, mold, torn carpet, and gaping holes in the ceiling. The poor condition of the building is obvious from video coverage.
Condo complex says landlord needs to fix mold, deplorable conditions
By: Scott Flynn
Updated: Feb 25, 2018 – 11:27 PM
COBB COUNTY, Ga. – Residents at a Cobb County condominiums say that event though a dispute between their landlord and the HOA has been resolved, their problems have not gone away
Channel 2’s Lauren Pozen learned the management company that oversees at The Worthington condominiums has filed for bankruptcy.
That is only adding to the headaches for the condo residents.
“There was a puddle of water and tile had collapsed from the ceiling,” resident Karlotto Frazier told Pozen as she walked her through his condo. “It is a pretty big hole so I am not sure when it is going to get fixed, but it is another frustration.”
The frustration Frazier is alluding to is how she and other renters found themselves caught in the middle of a dispute between their landlord and the homeowners association.
The HOA told the landlord, Samuel Lloyd, who owns about 78 of the 188 units in the building, he owes $170,000 in dues.
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The Worthington stands as yet another example of a condo association that is certainly not delivering on its promise of a low-maintenance lifestyle.
If repairs are not made promptly, it’s likely that many dissatisfied tenants will move out as soon as their leases end.
That will create vacant units, generating even less revenue for the condo association. Without a steady and reliable source of money coming in, the condition of the building and surrounding amenities will decline even further.
What about the owner-occupants in The Worthington?
Despite the fact that some buyers were lured into purchasing a condo because of its affordable sale price, the cost to own is certain to increase by way of special assessments or a rise in monthly fees, even though many homeowners cannot afford to pay more.
Cobb County records indicate that appraised values have plummeted since 2006. Units are now worth about 20-30% of their peak values. An individual onwer’s loss in equity depends on the time of purchase.
Cobb County public records also reveal that most homeowners have responsibly paid their property taxes.
But two LLCs owning dozens of units — presumably Lloyd’s management corporations — have not paid any property taxes for 2017.
The chances of a financial recovery for the condo association at this stage is slim.
What might happen next?
That depends on the perceived value of The Worthington’s Marietta location.
If bulk real estate investors see potential land value beneath the pair of 33-year old stucco buildings, dozens of tax-delinquent units are likely to be scooped up at the next County auction for pennies on the dollar.
If bulk investors take over the condominium association’s board, they may choose to terminate the condominium association, and pay remaining unit owners a fair market value for their units (currently quite low). That would clear the way for a condo-to-apartment conversion, or, more likely, demolition and redevelopment, possibly followed by a resale of the property to an institutional investor.
On the other hand, if real estate investors are not interested in its location, The Worthington will continue to deteriorate as residents vacate their units. At some point, the County will be forced to condemn the property, vacate holdout residents, and demolish both structures. Taxpayers will foot the bill for cleaning up the mess.
Owners who purchased their units at inflated prices or in recent years, whether as a small investment property or as a primary residence, are likely to lose money, regardless of the future course of events.
