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Prior to the 2007-2009 'RE bubble burst', Condo HOAs were occasionally faced with a few isolated deadbeats (like your friend) who would get 2-4 months behind. At that point, the HOA would typically file a lien against the property and then wait for the mortgage holder and legal system to take action. This process could drag-on for a year and leave the HOA holding the bag for expenses.
But, once people really started getting 'upside down' on their Condo mortgage and stopped paying their HOA fees, Condo HOAs (which have no other source of income to pay their monthly bills), took off the gloves and started getting tough and foreclosing on the deadbeats. Most HOAs are now 'up to speed' on exactly what they must do to quickly get foreclosure proceedings initiated and collect the HOA fees that they are rightly owed.
Your friend may believe that she is 'being smart and saving money on fees,' but, she will likely soon discover that the HOA will not tolerate her irresponsibility ... and that it will cost her significant legal costs (her own and HOA), in addition to delinquent HOA fees and penalties. (She sounds like one of those who will then wring her hands and cry, "I didn't know" -- when action is taken to foreclose her property).
This is a common situation in the sun belt. A kid will inherit a condo after a divorce or a death and think they have a free place to live. Then they get kicked out because they didn't understand the fees aren't optional.
Okay, if it's the one I'm thinking of, at least some of the sale prices are incredibly low, the building is from th '60s and the hoa feeon a three bedroom is $623. I also believe water is included in the fee. (Can't help but wonder...has your friend showered or flushed today).
I'm thinking this building has one fee...not separate condo fee and hoa fee, right? Because it's just the one building, outside amenities and parking lot.
But, in addition to that some things may be included or not...water, whatever power...gas, electric. So your friend's bill may include the condo/hoa fee added to the water bill or something.
At any rate, if it's the one I'm thinking of, it's kind of famous. Built in the 60's as apartments, the city's first modern high rise. Developer converted it in '84. It is attractive to great professionals as well a those connected with the hospital very nearby and the Law School. Some units offer student housing.
the fee includes most likely property insurance, flood insurance, landscaping, D&O insurance, maintenance of roof, gutters, decks, legal fees, putting 10% in reserve funds, repairs, plumbing, electrical issues in common areas, sprinklers, utilitiy bills in common areas, security if any, repaving parking lots, lights in common areas and management agent fees on top of that other fun stuff.
625 is normal on a decent size two bedroom. If she does not pay she is a dead beat and they should foreclose ASAP
... and as also mentioned, + weight room, pool, bball court, gazebo, "free" wifi, cable etc.
Several have suggested that $625 is high for an HOA fee (it really isn't!). What many fail to realize is that HOA fees directly reflect HOA operating costs and reserves ... without profit or administrative costs (unless a paid Management Company is involved). Along these lines, every reputable HOA publishes an annual budget and financial statement to document all expenditures.
One thing that will significantly drive-up HOA fees are an excessive number of rental units (or regular short-term rentals). This is particularly true in lower-cost/area condos! The reason is that renters don't really have 'any skin in the game' and thus, treat the property like a temporary apartment, which raises overall repair and maintenance costs.
... and as also mentioned, + weight room, pool, bball court, gazebo, "free" wifi, cable etc.
Several have suggested that $625 is high for an HOA fee (it really isn't!). What many fail to realize is that HOA fees directly reflect HOA operating costs and reserves ... without profit or administrative costs (unless a paid Management Company is involved). Along these lines, every reputable HOA publishes an annual budget and financial statement to document all expenditures.
One thing that will significantly drive-up HOA fees are an excessive number of rental units (or regular short-term rentals). This is particularly true in lower-cost/area condos! The reason is that renters don't really have 'any skin in the game' and thus, treat the property like a temporary apartment, which raises overall repair and maintenance costs.
Yes, it really IS on the high end. I just ran a quick check in the Atlanta market. Of 500 two-bedroom condos up to $400,000 in cost on Atlanta's Northside, only 25% of them were over $400 in monthly HOA fees -- and many of those were low-level condos in highly desirable high-rises. That's Atlanta prices. It is unlikely that Greensboro, NC is going to be in the same ballpark, housing-wise and price-wise, as north Atlanta.
If there was an assessment that is being pro-rated, that's one thing. But $600+ a month is still pretty aggressive in that area.
$625 is a HUGE HOA fee, especially for a little town like Greensboro. I mean, good grief, for a two bedroom condo, that would be just short of a decent house payment in that area.
Absolutely. What a rip-off. My house payment is less than that, and it will be paid off in 9 months. An oppressive HOA is like an unwelcome guest that runs up higher and higher bills every year and never leaves.
Quote:
Originally Posted by jackmichigan
Yes, condo fees come with the territory. If the fees/dues aren't paid, the condo association can oftentimes foreclose on the property. There was a recent case of an 85-year old woman in a Detroit suburb who lost her condo of 28 years because she mistakenly did not pay a $342 condo repair fee. The condo associated filed a lien and foreclosed on the property, selling it to an investor. The investor filed to evict her from her home and she ended up trying to fight the eviction and trying to reverse the taking of her property.
Unfortunately, we may never know how her lawsuit might have turned out since she died before the case went to trial.
Foreclosing on an 85 year old over a measly $342? Wow, that's cold. And I thought I'd heard it all
P.S. HOA boards realize that the bank will eventually foreclose as they are primary on the deed.
But the smart boards will get busy and rent out the condo in the meantime. This will keep those dues flowing and keep the place occupied until the bank forecloses and sells.
Your friend is trying to run a scam that will likely unravel within the next few months.
What does her father say about this? Is he up for losing his investment in this outrageously expensive condo?
My HOA (I am on the board) has taken over 10 properties with non-judicial forclosures. Once that's done we rent them, and the Sheriff's dept. removes whoever is in the house (normal protections to tennants doesn't apply in a foreclosure).
Real estate laws for banks vs HOAs vs owners have very different applications and timelines, so, while the bank will eventually get the homes, it will take about 1-2 years to get throught all the legal hoops.
Since real estate has recovered is appreciating, we find ourselves (the HOA) in the position of being able to sell the properties after renting them for a year, pay off the banks, and net $10K- $30K per property for the HOA.
Those that play by the rules in the HOA see us as hero's, but I know the scammers veiw us a little differently; but my responsibility is to protect the interests of all homowners in the association, not those special snowflakes that think rules don't apply, and they should never be held to account for screwing others.
My veiw is not paying your HOA fees is the same as stealing from the other residents who ARE paying their HOA fees. Don't like HOAs and the fees that come with them? Don't live in a property that has a HOA.
Edit: We were about $250,000 in arears on HOA fees before we started foreclosing, we have so far recouped close to $200,000, and raely have anybody past 60 days late with HOA fees now.
Last edited by Tuck's Dad; 11-12-2014 at 03:05 PM..
Reason: added: We were $250,000 in areas in fees before our current policy, we have nobody over 60 days delinquent on HOA fees since
Yes, it really IS on the high end. I just ran a quick check in the Atlanta market. Of 500 two-bedroom condos up to $400,000 in cost on Atlanta's Northside, only 25% of them were over $400 in monthly HOA fees -- and many of those were low-level condos in highly desirable high-rises. That's Atlanta prices. It is unlikely that Greensboro, NC is going to be in the same ballpark, housing-wise and price-wise, as north Atlanta.
If there was an assessment that is being pro-rated, that's one thing. But $600+ a month is still pretty aggressive in that area.
See post 23. Might be the answer. Although I still don't know for sure why the high fees....but very very low prices.
My veiw is not paying your HOA fees is the same as stealing from the other residents who ARE paying their HOA fees. Don't like HOAs and the fees that come with them? Don't live in a property that has a HOA.
My thoughts exactly.
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