Foreclosures, Finance Pressures Undermine Delivery of Services for Upkeep of Condos In Florida
- Feb 24, 2009
By Anuradha Kher, Online News EditorFt. Lauderdale–Mounting financial pressures caused by bank foreclosures have negatively impacted the ability of communities to comply with state-mandated fiscal requirements and are undermining delivery of services critical to the upkeep, repair and safety of condos and Homeowners Associations statewide, according to a new survey of Florida’s condominium, homeowner and other community association property owners.In a report titled “State of Distress: The Mortgage Foreclosure Crisis within Florida’s Condominium and Homeowner Association Population,” two-thirds (65.3 percent) of respondents living in communities hit by mortgage foreclosures said lender foreclosures are “causing a revenue shortfall that is placing a burden on the association’s finances.” As a result, 37.9 percent said the foreclosure-related revenue crunch for Florida condos and HOAs has resulted in “postponements of major capital investments in upkeep or repair” of buildings and other property.“A good chunk of the cities that have been hit badly are located in the Southeast and Southwest of Florida,” David Muller, co-executive director of the Community Association Leadership Lobby (CALL), tells MHN. CALL conducted this survey for the second year in a row. According to CALL Co-Executive Directors David Muller and Yeline Goin, the survey results are a sober reminder that mortgage foreclosures are having an alarming multiplier impact on the stability of common ownership residential and multifamily communities across the state.“In community after community, unpaid assessments from foreclosed properties have undercut maintenance, repairs and safety, while generating higher assessments for the entire community that threaten to push more owners into default and mortgage foreclosure,” says Muller, who is also shareholder and community association attorney with Becker & Poliakoff. Yeline Goin, co-executive director of CALL and a community association attorney with Becker & Poliakoff, says, “These survey results are an urgent wake-up call for state legislators to act immediately to transfer the burden of unpaid assessments from foreclosed properties away from these communities—and onto the lender-owners of the individual properties in foreclosure—in order to avert widespread fiscal failure in condos and HOAs across the state.”According to Muller, in extreme cases, optional termination of condos will take place. “Also, if problems continue to worsen, some owners/managers will opt to convert condos to rentals,” says Muller.