If you're the owner of a condo in Florida - or are thinking of buying one - then be sure to pay attention to this article! The Miami Herald writes today that condo properties that have foreclosed can greatly affect other owners within the same association or development - and it's all to do with maintenance fees.
If you're part of a condominium association, you'll have to pay monthly maintenance fees for the upkeep of common parts: hallways, stairwells, lifts, gardens, pool, that kind of thing. If a condo owner finds themselves in trouble financially, they may well stop paying their maintenance fees. (Although, more likely, they'll fall behind in their mortgage payments.) In a worse-case scenario, the property may foreclose - and banks aren't in a hurry to pay off outstanding fees.
If there's a significant number of condos which aren't contributing to monthly payments - whether the condos are foreclosed or not - condo associations may increase fees to cover the shortfall. This increase in fees may then have a significant knock-on affect on other owners: they may start having trouble paying these higher fees each month.
If fees aren't increased, then it might mean that associations may not have the money to pay for the full upkeep of their development. The article tells how some condo owners now do the work themselves. In some cases, a lack of funds may be more worrying than simply an infrequently mown lawn; a lack of insurance isn't to be recommended in a state with a hurricane season.
Now, this article may seem all doom and gloom, but I'd advise you not to think entirely that way. It's really just a gentle reminder of something that may happen as a worse case scenario, but it doesn't mean that it will. The best thing is to do your research and ask your agent detailed questions about the condo association you're interested in. In other words, as in many other cases, buyer beware!
Article: Unpaid fees trouble condos (Miami Herald, 22nd April 2008)
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The article on Unpaid Condo Fees [''Unpaid fees trouble condos,'' April 22] causing problems for condo associations was extremely timely. The Venetia is also struggling with the weight of unpaid maintenance fees caused by foreclosures. Although better off than the condos you mentioned in your article, the problem is nonetheless acute. And likely to get worse as the assessments burden condo owners not in foreclosure now.
We believe that changes in the law would place some of the burden of these unpaid maintenance fees back on the banks that caused the problems in the first place with their faulty lending practices. To that end, we are circulating a petition to condominiums across Florida in the hopes of getting the attention of the governor and legislators before the crisis worsens.
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