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[Post New] 12/02/2008 22:04:35 Subject: Foreclosures in Associations - How is it effecting the Association Community [Up]
Lori Burger

Joined: 09/15/2008 19:57:58
Messages: 75
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We performed a survey of 5,000+ association units that we manage at one of our northern California offices located in the Marin/Sonoma area. In this one office, we have 4% of the homes in a collection foreclosure process. Our managers are requesting that the Board of Directors of each association authorize a line item be put in the upcoming year's budget for unexpected loss of revenue due to potential foreclosures looming ahead.

I was wondering what other Association Manager's are experiencing and ways in which association board's are dealing with the loss of assessment revenue resulting from foreclosures?
[Post New] 12/07/2008 18:56:36 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Owen Ahearn

Joined: 10/29/2008 19:29:04
Messages: 64
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Lori, although I am not an association manager in Florida, I was recently there on business. In the Marco Island and Naples market, I learned through a meeting with some owners that the foreclosure rates are fairly high. In three golf course associations, there was such a negative impact, that common fees were raised to account for an increase in their legal line item.
[Post New] 02/21/2009 00:54:47 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Jesse Holland

Joined: 10/28/2008 19:54:22
Messages: 38
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Another issue seems to be the abandoment of homes in foreclosure - owner takes off, bank won't take title because they don't want to pay the dues. House ends up with mold. Does anyone have ideas on how to advise the association to deal with this?
[Post New] 03/31/2009 12:22:19 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Lori Burger

Joined: 09/15/2008 19:57:58
Messages: 75
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Jesse,

On thing I can recommend is going to your State Capitol and meeting with your state representatives. I recently did this last week in California. We expressed our frustrations about the effects of foreclosed homes in the community and our feedback on foreclosures was well-received.
[Post New] 04/27/2009 07:06:17 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Dawn Carpenter

Joined: 04/27/2009 06:58:56
Messages: 1
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Staten Island NY, has the highest foreclosure rate in NYC.

Currently my company manages 25 HOA/Condo Associations and I can tell you that my communities are losing thousands of dollars to unit owner foreclosures. Just in 6 months, we have reported 10 foreclosures with a write off number of $45,000.00, additionally short sale write offs have cost Associations $10,000.00.

It is very difficult to explain to Board Members that this is something our management company can not protect them from. The foreclosures are causing special assessments in communities to cover ordinary expenses for lost income.
[Post New] 04/28/2009 15:41:05 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Lori Burger

Joined: 09/15/2008 19:57:58
Messages: 75
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Dawn,

Your comments are on target, foreclosures are effecting associations in a big way. Unlike single family homes when there is a foreclosure in an Association the costs of maintaining the common areas continue. I attended the Capitol Hill visit with about 270 fellow IREM and CCIM members. One thing I think will make a difference is having our voices heard on a local and national leval. I did speak with the California Senators about the foreclosure problem in Assocaitions as well as attended a Hill visit on the state level asking for "super-liens" to be put in place to help Association recapture lost revenue that happens when a unit is foreclosed upon.

[Post New] 12/17/2009 13:55:03 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Suzanne Morrison

Joined: 12/08/2009 09:10:03
Messages: 8
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Yes this has been a major topic of every annual meeting I attend. The BOD of some of the larger associations I manage have decided to included in the budget for legal fees to foreclose. Some times it works but many times it doesn't. The resident goes bankrupt or they owe more on the mortgage than the Condo is worth, so not only is the association out the maintenance fees but they are also out the legal fees. Smaller Condo associations just don' have the cash reserve to go after the delinquent resident. The important thing is to inform the BOD of the risks of trying to recapture the money.
[Post New] 03/15/2010 09:02:45 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
John Matranga

Joined: 03/15/2010 08:59:52
Messages: 2
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In 2008, the state legislature of Illinois changed the Illinois Condominium Property Act to include a provision that allows associations to collect up to six months of back assessments in foreclosure cases. The assessments include any maintenance or legal fees accumulated during the time that the bank takes possession of a unit and the sale to a new owner is finalized. This helps a great deal, but associations still lose money in the exchange.

I believe that this legislation took affect through involvement of community association managers and board members through IREM. It was several years in the making, but is now paying off. Additionally, Illinois allows (or at least Cook County allows) associations to file for possession of a unit through an eviction proceeding in cases where the unit owner is delinquent in their assessments. In this way, if an association gains possession of a unit, they may rent the unit and apply the rents towards back assessments.

If you’re looking for concrete ways in which your political leaders can help associations, I think that these two ways represent proven benefits.
[Post New] 05/05/2010 15:20:31 Subject: Re:Foreclosures in Associations - How is it effecting the Association Community [Up]
Donna Barbee

Joined: 05/05/2010 15:02:27
Messages: 1
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Jesse,

One thing we have been able to work with the legislators in Nevada this past session to require the banks to record title within 30 days of performing their foreclosures.

This helps eliminate the banks for foreclosing on a home and waiting until they have it resold to record their title. I have had property where the bank has sat on recording for over a year.

This new law helps in two ways by giving the association not only the 9 month assessments (under the super priorty law) but also gives the association a legal entity to collect assessments from that can pay.

Get to know your legislators. Let them know the harm banks are doing to your associations by not recording their titles.
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