Economy Takes a Toll on Condos–and Condo Owners
- May 15, 2008
Miami–In cities such as Miami, Chicago and San Diego, condo owners are finding neighbors who default on their assessments and management companies that go bankrupt can translate into extra fees and maintenance issues, the New York Times reported Thursday.Monthly condo fees are supposed to cover ownership responsibilities such as water and lawn maintenance; but some unit owners have found that in the current economy, some neighbors and management companies are slowing or stopping the payments.The trend is leading owners to taking on some maintenance duties, including building security–and destroying the sense of community in some buildings.Condo market troubles–occurring mostly in urban areas–may be deeper and more prolonged than the problems in the rest of the housing market, the Times said. Condos account for one in eight homes in the U.S.Existing condo unit sales dropped 26 percent in March from 2007; single-family home sales fell just 18 percent, according to the National Association of Realtors.And they may fall further. Because financially-strapped neighbors can just stop paying their assessments and banks who foreclose on units are often slow to assume the extra costs, bargain-minded buyers can be slow to purchase discounted condo units, fearing special fees or maintenance problems, the Times said.