No Funds

Started by MichaelA4 • 6 replies • 1398 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

MichaelA4 (Ohio)
Posts: 11

Posted:

What happens to a Home Owners Association when they go broke?. Management is talking about selling entire property to an investment group. What happens to our homes would we still be considered condominiums.

Michael

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael,

How very sad. Aren’t you not-for-profit Corporation? Perhaps you can shed more light on this situation.

MichaelA4 (Ohio)
Posts: 11

Posted:

We are a non profit association. We have a total of over a $100,000 owed in back dues. Also we have had many homeowners just walk away from there Condo's.
Terrible to say many home owners that walked away there units have been selling for $15,000 to $21,000. Everything is being purchased by investors and they are not picky who they rent to.

Every month more people stop paying there associations fees. The association is now having a very hard time paying the bills. Management has been talking about raising the association fees. I pay 213.96 a month they want to raise me to $273.96 a month. If I wanted to swim at our pool this year had to pay $30.00 for a pool key. My dues are supposed to include the pool. Should I try to sell my unit before things get worse. Final thing the association has no money to fole liens or anything else. Im stumped on what to do.

PetunkaM (Florida)
Posts: 1,009

Posted:

Michael,

I could not tell you to sell or not to sell. But, I would be very surprised that the management (BOD ?) can sell the ‘entire property’ including the common areas to investors. They would not have that authority. Plus your Articles may not allow that. It would be a complex process.

Is it possible the investors are just buying the el cheapo units and renting them out? The rental market is very strong these days. When the investors become a majority owners you could see some radical changes and perhaps not for the better. Once you have more than 50% of rental units, your association insurance may hit the roof and there are other problems.

Filing a lien: does Ohio require an attorney to file a lien? Florida does not and it costs $10 when done by the Association.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Your association needs to start collecting dues. If this means foreclosing on 50% of all the condo's, so be it. You need to purge all non-paying residents. Even if it replaces them with renters.

If not, the court will take over, charge you way more dues than you have now, and will foreclose on you in a timely manner.

GlenL (Ohio)
Posts: 5,491

Posted:

Michael no they can't sell the property without approval of all owners AND any mortgage holders. They may however be able to file bankruptcy. As to filing liens, we contract with a collections attorney, he files the liens and his fees and court costs including the fee to release the lien are added to what the homeowner must pay before the lien is released. Once you get to the 50% threshold of investment property vs homeowner occupied property, banks stop lending to new homeowner's especially if it is a government backed loan. They also will not loan if the reserves are below a certain level. As to your question, yes I would sell if I could and get while the getting is good. In the mean time you need to read your CC&R's AND ORC 5311 to make sure the Board is following the law and not pulling a fast one. You can read ORC 5311 here: http://codes.ohio.gov/orc/5311

Studies show that 5 out of 4 people have problems with fractions

SusanW1 (Michigan)
Posts: 5,202

Posted:

You talk about a Management Company - but not the board!

The MC does NOT raise dues or sell the HOA.
They take orders from your board.

So your Board should sit down with an attorney specializing in HOAs and come up with a plan.

You don't mention an Annual Budget. $100,000 in dues arrearage sounds huge, but it all might be relative.

In any case, the MC does not call the shots. . . .

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here