Condo owners finding a cash crunch
Homeowner associations get creative to keep up services
BY MARGARITA BAUZA • FREE PRESS BUSINESS WRITER • July 6, 2008
As more condo owners who need to move are stuck with properties they can't sell and foreclosure rates rise, many homeowner associations are hurting for the cash needed to maintain monthly services.
The vacancies have forced condo associations to more aggressively pursue back fees from owners who have turned properties over to banks, and to get creative about providing maintenance and services.
According to the Dallas-based Associa, which represents 7,000 community associations in 26 states, including Michigan, delinquency rates on dues are estimated to reach 5%, up from an average of 2%.
Local property managers say their numbers are similar.
Jon Sabo, who manages Highland Lakes Condos in Northville, says delinquencies are at 5% at the 700-unit complex.
This has forced some changes in the way Highland Lakes does business.
"We've been trying to find efficiencies, cutting our own grass and doing our own snow removal to minimize the impact," he said.
"Because of oversupply, prices have been devastated," said Sabo, who is also chapter executive director of the Community Associations Institute, the trade association for all Michigan homeowner, condo and property owner associations.
The Highland Lakes property has 16 foreclosed properties, and while sales continue, they have done so at lower prices.
At the peak of the real estate market, in August 2005, a lakefront 2-bedroom, 2-bath 1,400-square-foot condo at Highland Lakes sold for $220,000. The same unit now sells for $140,000. ......(more)
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