Are small condo communities a risk? (for sale, real estate, foreclosures)

[Jkgourmet]

We've never lived in a condo before, but have been looking at some during our visit to SW Florida. (they make sense given our age and the potential of this being a second home.)

one of the unexpected things we've learned is that there are condo associations that are so small - 6 to 12 units!

Which makes me wonder about what happens if one or two people don't pay their fees? In a larger association, that risk is spread over many owners, limiting the personal out of pocket if one owner doesn't pay his/her share.

Am I being paranoid or sensible here?

[Samiamnh]

You're being smart......we originally started looking at condo's and settled on a single faimily in CC because of the condo fee concerns.If a couple of families go to forclosure those fee's get passed on to the other owners.Florida law (thanks to lots of lobbying $$) gives condo owners the right to forclose on anyone for not paying fee's.
Also....being a seasonal owner,the year round residents can gang up on you if they decide they want a new pool,rec center docks etc and can vote huge assessments for improvements that you might not even use.
That being said....they aren't all bad. Just do your homework and ask the residents....they are always glad to fill you in.

[Jkgourmet]

Originally Posted by Samiamnh

You're being smart......we originally started looking at condo's and settled on a single faimily in CC because of the condo fee concerns.If a couple of families go to forclosure those fee's get passed on to the other owners.Florida law (thanks to lots of lobbying $$) gives condo owners the right to forclose on anyone for not paying fee's.
Also....being a seasonal owner,the year round residents can gang up on you if they decide they want a new pool,rec center docks etc and can vote huge assessments for improvements that you might not even use.
That being said....they aren't all bad. Just do your homework and ask the residents....they are always glad to fill you in.

LOL! Difficult to do in the case of one unit that we particularly liked - it was a short sale in a building with six units. A little more research (on my part - not the realtor) showed that there were a total of 2 units up for short sale, 1 other unit for traditional sale. That's half the units in the building for sale! We talked to one resident, who raved about the place, but turned out to be an annual renter on a month to month lease. (the condo docs say 120 day rental minimum).

The comps show any of these units to be a good deal at the time of purchase - but the risk in the future of problems. . .

[TamRE]

Try the web site below for information.

Did you know that condominiums, timeshares and mobile homes in the state of Florida are regulated by the Division of Florida Condominiums, Timeshares, and Mobile Homes within the Florida Department of Business and Professional Regulation? You can get detailed information or answers to your questions by visiting their web site at: LSCMH - Statutes.

Condominium ownership is desirable in Southwest Florida because of it's large population of retirees, snow birds, and 2nd home owners. A condo offers a lifestyle free of the responsibility of maintaining the exterior of the property. Condo developments also quite frequently have other amenities such as pool, club house, tennis, and golf. There are many condos available for sale in Southwest Florida in a wide variety of sizes and price ranges. The Florida Condominium Act, Chapter 718, F.S. gives statutory recognition to the condominium form of real property ownership.

[Jkgourmet]

Tam, thanks for the link. Maybe you can answer a question for me.

Since the costs of the condo (maintenance, insurance, utilities, landscaping, etc.) are covered by the condo fees - what happens in these small associations when one or two owners don't pay their fees?

I have heard that there is a reserve, but how does one check if it is fully funded? For that matter, how does a consumer know what "fully funded" really means? And with newer condos, there hasn't been that many years in which to build up a reserve. (We are looking primarily, but not exclusively, at condo's built after 2005.)

I really like the concept of condo living. But I am struggling to understand how such a small association isn't a risky proposition.

[hiknapster]

Condominium owners across the country are being pushed to the wall financially by neighbors who can't pay their condo-association dues. As foreclosures and financial troubles force more and more owners to stop paying monthly assessments, the remaining residents must pony up extra cash to keep the developments' roofs mended, garbage hauled and landscaping maintained. Some associations are raiding their reserve funds — meant for the property's major repairs — to cover monthly expenses.

Delinquent condo dues pressure fellow owners - MSN Real Estate

[CCRESI]

I would say risky. Why? Just like others have mentioned, if your neighbors are paying their HOA, you might be left footing the bill.. Or the development as a Whole could go bankrupt.

[fiege1224]

Don't forget the owners that like to special assess you to death for all of there wants.In our complex of 8 units built in 2006 we have 2 women that got on the board to get what they want. This year its storm shutters at 10,000 per unit next year they want the grounds fixed to there liking.This is a complex that couldn't pay there bills just 2 years ago because 4 out of 8 units weren't paying dues.Everyone is paying now.But the real kick is one of the women on the board is a realtor that sold the units at a very high price in 2006 to the owners that never paid there dues from day one in the first place.Now she bought in at a very low price to most likely to flip while costing us money in extra dues..If I had my choice again I would stick to a house.

[CCRESI]

That was to say : aren't paying the hoa. Oops