Banks Bankrupting Condos
Banks and mortgage lenders holding REOs are bankrupting homeowner associations threatening the security of your investment. What do you need to know?
Mortgage lenders how have foreclosed on condos on home in associations are not paying their dues and are frequently neglecting maintenance, leaving the financial burden to the association and other community property owners. This can quickly lead to escalating liens on these foreclosure units and soaring dues and assessments for other unit owners with serious consequences for those selling or buying a home.
For Those Buying a Home
If buying home in an association make sure you are aware of special assessments and the financial condition of the community. You don’t want to stretch yourself to buy only to find you have to come up with thousands in extra assessments to repair a bank owned unit or cover their delinquent dues. Make sure you get the condo or HOA docs upfront and check their finances. A bankrupt association may prevent you from obtaining financing and could quickly lead to a depreciating asset.
For Those Selling a Home
If this is happening in your association you can’t afford to sit back and just hope it works itself out, especially if you don’t have a controlling percentage of votes. A bankrupt condo association can mean no cash to pay for regular maintenance and services and result in rapid depreciation and reduce your ability to sell your unit. Who wants to buy a condo where the pool isn’t kept clean, grass can’t be mowed regularly and leaks and spreading mold from vacant units threaten the structural integrity of the building? Plus, it doesn’t matter if you put your place on the market for 5 cents if the new buyer will have to take on tens of thousands of dollars in assessments and back owed dues. If this is happening where you live you may want to consider selling for cash fast to get out quickly before it gets worse.