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Questions to ask when buying a condo

Posted 12-28-2009 at 10:07 PM by SoFLGal
Updated 03-07-2010 at 11:54 AM by SoFLGal


High levels of foreclosures are causing all sorts of problems for condo associations, which are having to slash costs and amenities and often impose assessments on solvent owners to maintain deteriorating infrastructure.

Condo buyers need to find out as much as they can about complexes before they plunk down cash.

I suggested asking the following questions:
• How much money has the complex put into reserves to deal with future infrastructure needs?
• Are there any major repairs that need to be made?
• Have assessments and dues been increasing, and does the complex have plans to do so in the future?
• How many of the units are owned by investors?
• Do any investors control large blocks of units and are there any restrictions on renting?
These are the same questions that a bank will ask to determine whether to lend in a complex.

The continuing foreclosure flood is creating severe financial problems for condominium associations across Florida, and members are complaining that banks and mortgage companies are doing nothing to help.

In fact, condo owners say that many lenders are delaying foreclosures to avoid paying association dues. That is requiring associations to slash costs and cut amenities, and forcing owners to fork over more cash to keep complexes humming.

In something of a Catch-22, the financial problems at condo complexes also are prompting banks to tighten restrictions on lending.

Banks will not lend in complexes that have not set aside 10 percent of their budgets for reserves. They will not lend when more than 50 percent of the units are rented. They also will not lend where a few owners control too many of the units or where too many owners are in default on their mortgages and dues.

Not every condo complex in Southwest Florida is suffering from the crisis to the same degree.

The majority -- as many as 75 percent -- are older, more stable complexes that did not experience a direct blast from the boom-and-bust cycle.

The ones hit hardest were those that came out of the ground from 2004 to 2007, or were converted from apartments during the same period.

These complexes experienced heavy speculative buying during the boom and are now facing the most foreclosures.

http://www.heraldtribune.com/article...icle/301049999

CONDO CRUNCH
Condominium complexes that drew the most speculators during the boom also suffered the most defaults during the bust.

1. Bermuda on Osprey, Sarasota
• Built or converted: 2006
• Total units: 46
• Number of foreclosures: 35
• Ratio: 76%

2. Condominiums at Waterside, Rotunda
• Built or converted:2007
• Total units: 42
• Number of foreclosures:31
• Ratio: 74%

3. Village at Town Park, Lakewood Ranch
• Built or converted: 2005
• Total units: 272
• Number of foreclosures:143
• Ratio: 53%

4. Park View, Sarasota
• Built or converted: 2005
• Total units: 108
• Number of foreclosures: 55
• Ratio: 51%

5. Bella Villino, Palmer Ranch
• Built or converted: 2005
• Total units: 132
• Number of foreclosures: 44
• Ratio: 33%

6. Garden Walk, Bradenton
• Built or converted: 2005
• Total units: 174
• Number of foreclosures: 54
• Ratio: 31%

7. Watercrest, Lakewood Ranch
• Built or converted: 2005
• Total units: 180
• Number of foreclosures: 55
• Ratio: 31%

8. Admiral's Walk, Sarasota
• Built or converted: 2005
• Total units: 249
• Number of foreclosures: 75
• Ratio: 30%

9. Miramar, Lakewood Ranch
• Built or converted: 2004
• Total units: 84
• Number of foreclosures: 25
• Ratio: 30%

10. Laguna at Riviera Dunes, Palmetto
• Built or converted: 2005
• Total units: 168
• Number of foreclosures: 42
• Ratio: 25%

11. Greenbrook Walk, Lakewood Ranch
• Built or converted: 2006
• Total units: 226
• Number of foreclosures: 66
• Ratio: 29%

12. Serenade, Palmer Ranch
• Built or converted: 2005
• Total units: 324
• Number of foreclosures: 82
• Ratio: 25%

13. Parkridge, University Parkway
• Built or converted: 2004
• Total units: 347
• Number of foreclosures: 83
• Ratio: 24%

14. Las Palmas, Sarasota
• Built or converted: 2005
• Total units: 488
• Number of foreclosures: 105
• Ratio: 22%

15. Palms of Cortez, Bradenton
• Built or converted: 2005
• Total units: 450
• Number of foreclosures: 97
• Ratio: 22%

16. Citywalk, Sarasota
• Built or converted: 2002
• Total units: 70
• Number of foreclosures: 15
• Ratio: 21%

17. Vintage Grand, Palmer Ranch
• Built or converted: 2005
• Total units: 432
• Number of foreclosures: 68
• Ratio: 16%

18. The Sanctuary, Bradenton
• Built or converted: 2005
• Total units: 274
• Number of foreclosures: 40
• Ratio: 15%

19. Lake Vista, Lakewood Ranch
• Built or converted: 2006
• Total units: 240
• Number of foreclosures: 35
• Ratio: 15%

20. Villagio, Sarasota
• Built or converted: 2004
• Total units: 320
• Number of foreclosures: 42
• Ratio: 13%

SOURCE: Sarasota, Manatee and Charlotte county clerks of court
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