Sep 28, 2008 10:46 am US/Pacific
Homeowners Groups Off-Set Foreclosures With Fees
SANTA ANA
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More than 60 percent of Orange County homeowners are in mandatory HOAs, and some of the associations have hundreds of units, with dozens of "bank-owned for sale" signs and empty dwellings.
The tsunami of foreclosures sweeping across America is hitting condominium owners who are current on their payments hard, because homeowners associations are getting stiffed by persons losing their homes, it was reported Sunday.
The Orange County Register says many large condo complexes are so rife with vacant, foreclosed units that some have had to levy special $1,000 fees against the remaining owners to pay for emergency termite repairs or other maintenance costs.
Some of the abandoned units are turning into nightmares for the volunteer HOAs, with squatters, hundred-pound beehives, and other undesirables taking up residence, the paper reported. Some condos worth more than $1 million have been abandoned, leaving the neighbors to water and mow the lawns.
More than 60 percent of Orange County homeowners are in mandatory HOAs, and some of the associations have hundreds of units, with dozens of "bank-owned for sale" signs and empty dwellings.
A homeowner in distress generally stops making mandatory payments to the HOA months before moving out, said Andrew Schlegel, vice president of a Merit Property Management. When a bank forecloses on a dwelling, the past-due HOA assessments must be collected from the former owner who has likely disappeared.
The impossibility of collecting the past due assessments has put many HOAs in dire straits, the Register found. Some large condo complexes have raised their HOA monthly fees, and one HOA charge went from $10 per month to $240, the newspaper reported.
"When some homeowners aren't paying their fair share, it puts a burden on the other homeowners," said Karen Conlon, president of the California Association of Community Managers.
One condo complex in Lake Forest has more than 60 foreclosures and has run out of money to pay for urgent termite repairs. Another, in Placencia, has 33 foreclosures and is levying a special $1,000 fee on the homeowners who are making their payments on time to stay afloat, the Register reported.
Merit is filing liens for past due HOA payments on 4.8 percent of the units that it manages, more than quadruple the percentage last year, Schlegel said. But such liens are useless once the property is formally foreclosed.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
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