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Subject: Meanwhile Back in Florida...
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CathyA3
(Ohio)

Posts:2466


09/03/2021 12:33 PM  
... there are signs that perhaps lessons have not been learned.

With $10M-plus renovation pending, Shoreline Towers owners seek to recall HOA board:

https://www.nwfdailynews.com/story/news/local/2021/09/02/owners-destins-aging-shoreline-towers-want-boot-hoa-board/5683564001/

Quote from the article:

"Kent confirmed rumors persist that those behind the recall effort oppose ponying up for the renovation.

"Some owners have stepped up to say they were not told the truth about the reasons for the recall effort, and that they remain in favor of doing the necessary repairs," he said.

Shoreline Towers, whose three tallest buildings are 45 years old, is in need of a great deal of structural repair, a study by the engineering group O'Connell & Associates found.

The list of work to be done is extensive. Initial plans called it to get underway in mid-September and take up to 18 months to complete."

I'm flabbergasted...
JohnC46
(South Carolina)

Posts:11514


09/03/2021 12:45 PM  
Posted By CathyA3 on 09/03/2021 12:33 PM
... there are signs that perhaps lessons have not been learned.

With $10M-plus renovation pending, Shoreline Towers owners seek to recall HOA board:

https://www.nwfdailynews.com/story/news/local/2021/09/02/owners-destins-aging-shoreline-towers-want-boot-hoa-board/5683564001/

Quote from the article:

"Kent confirmed rumors persist that those behind the recall effort oppose ponying up for the renovation.

"Some owners have stepped up to say they were not told the truth about the reasons for the recall effort, and that they remain in favor of doing the necessary repairs," he said.

Shoreline Towers, whose three tallest buildings are 45 years old, is in need of a great deal of structural repair, a study by the engineering group O'Connell & Associates found.

The list of work to be done is extensive. Initial plans called it to get underway in mid-September and take up to 18 months to complete."

I'm flabbergasted...




Why am I not surprised by this? The proposed Special Assessment is $80K per unit.
not all are going to swallow that and that is the underlying reason. Money.

In one HOA I was a member of, over 90% of the owners voted for a $30K assessment
for each home (175 homes). A group of 3 held it up in court for over a year and I know
for a fact that at least one of the 3 did it as they could not afford the $33K
and for no other reason.
JohnC46
(South Carolina)

Posts:11514


09/03/2021 12:50 PM  
Posted By JohnC46 on 09/03/2021 12:45 PM
Posted By CathyA3 on 09/03/2021 12:33 PM
... there are signs that perhaps lessons have not been learned.

With $10M-plus renovation pending, Shoreline Towers owners seek to recall HOA board:

https://www.nwfdailynews.com/story/news/local/2021/09/02/owners-destins-aging-shoreline-towers-want-boot-hoa-board/5683564001/

Quote from the article:

"Kent confirmed rumors persist that those behind the recall effort oppose ponying up for the renovation.

"Some owners have stepped up to say they were not told the truth about the reasons for the recall effort, and that they remain in favor of doing the necessary repairs," he said.

Shoreline Towers, whose three tallest buildings are 45 years old, is in need of a great deal of structural repair, a study by the engineering group O'Connell & Associates found.

The list of work to be done is extensive. Initial plans called it to get underway in mid-September and take up to 18 months to complete."

I'm flabbergasted...




Why am I not surprised by this? The proposed Special Assessment is $80K per unit.
not all are going to swallow that and that is the underlying reason. Money.

In one HOA I was a member of, over 90% of the owners voted for a $30K assessment
for each home (175 homes). A group of 3 held it up in court for over a year and I know
for a fact that at least one of the 3 did it as they could not afford the $33K
and for no other reason.




ADD ON

One of the 3 was a new buyer and believed he was being charged as the BOD
had been negligent in not doing repairs over the years and he should not
be paying for their negligence.

One of the 3 also sued their seller claiming the seller, being on the BOD
had to be aware of discussions about a needed assessment and when they
sold their home they said nothing about it. That suit was quickly thrown out.
CathyA3
(Ohio)

Posts:2466


09/03/2021 1:00 PM  
There are probably plenty more condo owners out there who can't afford their homes, and the fallout from the Surfside collapse will force a reckoning.

I can understand wanting to take a chance if the community is all ranch-style detached homes, but good grief these are more towers needing structural work.
MaxB4


Posts:1351


09/03/2021 1:03 PM  
JohnC

You don't think holding up a loan is legitimate because the owner(s) couldn't afford it?

An association I manage just got loan approval today for a roofing project in the amount of $800K. When the special assessment was voted on, 15 of the 53 ballots voted no. I wonder why they voted the way they did, maybe because they are on a fixed income, it was a real burden to them?
AugustinD


Posts:1675


09/03/2021 2:35 PM  
I cannot tell if CathyA3's comment that she is flabbergasted is sarcasm or not.

The article says the recall petition had irregularities. If the group demanding the recall did not use an attorney, then the recall petition being legally defective does not surprise.

Since Surfside condo collapse, I have read of a number of condos that have assessed in the $30k to $100k range, per unit, in the last 15 years or so.

Condo buyers need to get used to this.

A long-time Treasurer-Director at a 30-year-old condo in the town where I live just quit both positions. Incredibly, she explained that the reason she quit was because people fought her even when she recommended assessment increases that were far less than those needed.

The condo's reserves are about 30% funded, well below what is healthy. The former Treasurer-Director does not understand reserve studies. She has publicly belittled their value. But now that the condo is facing roof replacement within a few years and more, and the reserve funds obviously are nowhere near enough, I believe she has had it. She does not want to take the (ignorance-based) hostility for doing the right thing.

Posted By JohnC46 on 09/03/2021 12:45 PM
Why am I not surprised by this? The proposed Special Assessment is $80K per unit.
not all are going to swallow that and that is the underlying reason. Money.
I think a board has an absolute duty to grit their teeth, bring on a shark of an attorney, lien and foreclose. Else many other owners are messed over by the minority that cannot pay or get a loan.
In one HOA I was a member of, over 90% of the owners voted for a $30K assessment for each home (175 homes). A group of 3 held it up in court for over a year and I know
for a fact that at least one of the 3 did it as they could not afford the $33K and for no other reason.
Oh dear. As soon as the dust settled, if I were on this condo's board, I would feel a duty vote to lien and foreclose on every unit not paying, as quickly as the law permits.
SheliaH
(Indiana)

Posts:4221


09/03/2021 4:45 PM  
Posted By MaxB4 on 09/03/2021 1:03 PM
JohnC

You don't think holding up a loan is legitimate because the owner(s) couldn't afford it?

An association I manage just got loan approval today for a roofing project in the amount of $800K. When the special assessment was voted on, 15 of the 53 ballots voted no. I wonder why they voted the way they did, maybe because they are on a fixed income, it was a real burden to them?




I'm sure the special assessment would be a burden, but if the work needs to be done, what's the a!ternative? It'll cost a lot more money if they skip the work and then they'll be worse off. Everyone is on a fixed income - some more fixed than others, but when you own a home there are things that have to be done. I have some things that need to be done in my own home and and have to figure out how to do it on one salary and continue to pay the bills. I hate the idea, but it's necessary. These folks may have to buck up and do what's necessary as well.
MaxB4


Posts:1351


09/03/2021 5:03 PM  
Posted By SheliaH on 09/03/2021 4:45 PM
Posted By MaxB4 on 09/03/2021 1:03 PM
JohnC

You don't think holding up a loan is legitimate because the owner(s) couldn't afford it?

An association I manage just got loan approval today for a roofing project in the amount of $800K. When the special assessment was voted on, 15 of the 53 ballots voted no. I wonder why they voted the way they did, maybe because they are on a fixed income, it was a real burden to them?




I'm sure the special assessment would be a burden, but if the work needs to be done, what's the a!ternative? It'll cost a lot more money if they skip the work and then they'll be worse off. Everyone is on a fixed income - some more fixed than others, but when you own a home there are things that have to be done. I have some things that need to be done in my own home and and have to figure out how to do it on one salary and continue to pay the bills. I hate the idea, but it's necessary. These folks may have to buck up and do what's necessary as well.



We're not comparing apples to apples. The repairs on many of these condos is more than it originally cost to build back in the day. The cost to maintain or repair a condo versus a town home community versus detached single family homes.

I posted an article of an aging population living in HOA's and, in particular, condos and the effect it has in raising funds to maintain the dwellings. It appeared no one was interested to comment.
SheliaH
(Indiana)

Posts:4221


09/04/2021 7:17 AM  
I read a similar article years ago and it mentioned a number of issues related to aging in place, including the problem of paying for major repairs to the common areas.

Assessment increases are also a problem because some have health issues and you don't want people to choose between paying assessments and heart medication. Then there are the issues related to dementia (wandering, aggressive behaviors in some cases, etc.)

Unfortunately, houses, townhomes, condos and so on don't care about any of that. When things break fown, they break down and have to be repaired. Sometimes we are so hell-bent on staying in our homes, we refuse to see that we need help or perhaps it's time to consider senior housing (not necessarily a nursing home). And there are issues related to that, as many people don't have $3500+ a month for assisted living.

Everyone has topsy their fair share in HOAs and that's why you do your best to come up with a realistic budget so you don't have to resort to loans or special assessments. Sadly this usually means somebody of increase, people resist that too and then get hit with $10k special assessments for work that simply can't wait anymore.

Once again max, what's the alternative when you know all of this?
CathyA3
(Ohio)

Posts:2466


09/04/2021 7:59 AM  
Posted By SheliaH on 09/04/2021 7:17 AM
I read a similar article years ago and it mentioned a number of issues related to aging in place, including the problem of paying for major repairs to the common areas.

Assessment increases are also a problem because some have health issues and you don't want people to choose between paying assessments and heart medication. Then there are the issues related to dementia (wandering, aggressive behaviors in some cases, etc.)

Unfortunately, houses, townhomes, condos and so on don't care about any of that. When things break fown, they break down and have to be repaired. Sometimes we are so hell-bent on staying in our homes, we refuse to see that we need help or perhaps it's time to consider senior housing (not necessarily a nursing home). And there are issues related to that, as many people don't have $3500+ a month for assisted living.

Everyone has topsy their fair share in HOAs and that's why you do your best to come up with a realistic budget so you don't have to resort to loans or special assessments. Sadly this usually means somebody of increase, people resist that too and then get hit with $10k special assessments for work that simply can't wait anymore.

Once again max, what's the alternative when you know all of this?



Condos - and to some extent HOAs - make this problem even worse because they hide essential components in the common areas and expenses in the assessments, making it much easier to keep kicking the can down the road. If you own a single family home outside of an HOA, you know it if the roof starts to leak or the foundation cracks - the problems are in your face and won't go away.

Compounding this, especially in condos, is that homeowners can stop paying assessments and nothing very terrible happens in the short run. Their financial issues become other people's problem since the essential bills have to be paid *now*.

A similar thing happens with deferred maintenance that results in huge special assessments. While it may seem "unfair" that people are expected to agree to unaffordable assessments, these same people *chose* this by not paying the higher assessments all along and stashing the money in the reserves. They essentially borrowed (and spent) money from their future selves and now the loan has come due. The real problem is that they're allowed to get away with it. The folks who really get stuck are the newer owners who likely paid top dollar for property that was essentially living on borrowed time and was not worth the price they paid.

I agree that this is a problem, and I don't know of many solutions other than ones that prevent or make it much harder to hide the true cost of home ownership or to keep kicking the can down the road.

For example, have stricter requirements about funding the reserves, and eliminate or drastically limit homeowners' ability to vote down assessment increases. And maybe stronger disclosure and lending requirements for condos so that assessments and reserves are in their faces and can't be ignored. This latter may seem unfair to condo buyers, but owners of individual homes don't cause multi-story buildings to collapse and kill a bunch of people.

The problem of elderly folks who can no longer handle home ownership for a variety of reasons is a separate but related issue. It's tough since as a society we tend to agree that adults have the right to make their own choices, even if those choices harm them. The problem in COAs/HOAs is that these choices can also harm neighbors to whom they have financial and legal ties.



AugustinD


Posts:1675


09/04/2021 8:26 AM  
Posted By CathyA3 on 09/04/2021 7:59 AM
The folks who really get stuck are the newer owners who likely paid top dollar for property that was essentially living on borrowed time and was not worth the price they paid.
I wonder if buyers even have a fair chance to observe the health of a reserve fund. In the states that require financial disclosures, I do not think I have ever seen reserve studies required to be disclosed. Nor must the age of, say, major capital assets like roofs necessarily be disclosed.

I guess a buyer could walk the grounds and look at the condition of things. Then see how much is in the HOA's reserve account. With some familiarity of what it costs to replace a roof, parking lot, piping et cetera, maybe a savvy buyer could adjust her or his offering price to reflect any likelihood of a large special assessment.

Buyers really need to be informed of how well reserves are funded. "Percent funded" is a popular metric but one that many experts also disparage. On the third hand, for a layperson buyer, I cannot think of a better metric that would help buyers pay appropriately.

When realtors perform comps on condos, no way do they have any idea of whether the sales prices adequately reflect the financial health of reserves.

And maybe stronger disclosure and lending requirements for condos so that assessments and reserves are in their faces and can't be ignored. This latter may seem unfair to condo buyers, but owners of individual homes don't cause multi-story buildings to collapse and kill a bunch of people.
I think lenders ought to be incentivized to factor in the health of reserves. It's strange to me that lenders are not incentivized thusly. Because when the lender's client (a condo owner) gets stuck with a $50,000 special assessment and cannot pay, the lender has skin in the game. (Such as it is. I am not sure things have really changed all that much since 2007.) The fraction of units that are rentals just about seems more important, when it comes to lending practices.
CathyA3
(Ohio)

Posts:2466


09/04/2021 9:38 AM  
I agree that trying to assess the financial and physical health of a condo community is tough and probably beyond the capabilities of most/all buyers. I'm not sure that I could do it, and I'm about as well informed as any outsider could be.

Buying a condo is more akin to buying into a business or even buying shares of stock. People who do this will spend hours pouring over financial statements, auditors' reports, tax filings, etc. or even talking to the other business owners and management in an effort to determine whether or not the investment is worth the risk of buying. In many ways, buying stock is less risky because for most people a single holding doesn't represent the lion's share of their net worth the way a home often does.

But anyway, back to that link I posted, what floored me was that, after the Surfside collapse, anybody living in a 45-year-old tower condo needing structural repairs could even think about putting this off, to the point where they want to get rid of the current board to stop it. You'd think that the collapse and the deaths of many residents would have scared them silly.
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