When a condo complex owns an adjacent lot...

Gerelee,

Wow.. what an interesting post. Since I'm a Floridian I won't offer any advice but it sure seems like your lot is your reserve. Personally I would suggest selling and some sort of short term investment (so when interest rates go up you can reinvest at a higher rate). It shouldn't be hard to convince the other owners that in lieu of them changing things with their lenders and preventing special assessments in the future you all would have resources on hand in the event something major comes up. A condo with a reserve is much more attractive to buyers if there is a reserve. Just another thing to consider.

I lived at one time in a small condo (11 units)..a 50 year old building with no reserve and in the two years I was there we had several special assessments and more to come and three raises in assessments so I was forced to sell. First, it was for hurricane insurance raises, then major plumbing work, roof repair which should have been totally replaced, exterior painting, etc. It was a horror.

Leasing could become a major pain especially with the economy the way it is now.

I'll be following to see what others can offer and good luck.

I also don't get the need for restructuring of the loan. Please explain.

I don't understand the 1/12 thing.

How could each owner have ownership if it was supposed to be developed in the future (but did not)

I wonder if this is just common HOA property.

We weren't owners when the HOA first tried to sell off the lot, so I don't know all the details about what those previously interested parties were requesting, but the fact that it sounds odd to most of you encourages me to revisit the sell option.

Anyone else heard of or experienced something similar?

TIA!

I hate to be contrarian but I can understand the need to re-negotiate the loans depending on how they are worded. If the loans were made for a condominium located on x acres of property and you're asking the bank to accept less collateral for the same price, risky in today's market. However if the mortgage holder's only interest is in the condominium unit itself then you probably don't have to refinance. That is why most developers (at least around here) subdivide the property and develop it in sections only adding a section to the Association when they're ready to build. Also most documents (check local listings) specify how a piece of real property may be disposed of and what may be done with the proceeds. If in doubt contact an attorney who specializes in real estate; you can spend a little now or a lot later.

Gerelee, these are some sections you need to check your documents for along with visiting the County Clerk's office or website to find out if the empty land has been annexed yet, if it is then you may have to go before the Zoning Board to divide the lot from the rest of the property. You also need to think about what the property is zoned for or you could find yourself with (pick your worst nightmare) for a neighbor. These are from our documents just to give you an idea of the type of language to look for.

Condominium Property. The land described as Parcel I heretofore, all buildings improvements and structures on said land, and all easements, rights, and appurtenances belonging to said land, and all articles of personal property, submitted to the provisions of Chapter 5311 of the Ohio Revised Code. In the event that through the process of annexation, purchase or merger of other land and/or condominiums herein or hereto, other property of a similar type is brought within or into the jurisdiction of this Condominium Plan such other property and all improvements thereon, and all easements, rights and appurtenances belonging thereto, and all articles of personal property existing thereon for the common use of the Unit Owners, shall also thereupon be included in this definition.

Ownership Interest. A fee simple estate in a unit, together with an appurtenant undivided interest in the Common Areas and Facilities. The undivided percentage interest of the unit owners in the Common Elements and the fee simple title to the respective units shall not be separated or separately conveyed, encumbered, inherited or divided, and each undivided interest shall be deemed to be conveyed or encumbered with its respective unit even though the description in the instrument of conveyance or encumbrance may refer only to the fee title to such unit.

Such percentage amount shall remain constant and shall not be changed except by an amendment pursuant to Article XII of this Declaration or by an amendment to this Declaration unanimously approved by all Unit Owners affected by such change.

Purchase of Real Property The Association may purchase, hold title to, and sell real property that is not declared to be part of the Condominium Property with the approval of the Unit Owners who exercise not less than seventy five percent (75%) of the voting power of the Association and the authorization of the Board of Directors. Expenses incurred in connection with any such transaction are Common Expenses.

Oh, and on our side of the street, just one block away, is a small hair salon and spa, as well as a couple more condo complexes and apartment buildings.

Turn the corner on any street and it's all single family homes.

Gerelee,

Have your CCRs been amended to include this additional parcel? If not then, IMO, it is not a part of the existing HOA.

I really really really think you all need a real estate/HOA lawyer to take a look at this.

Hey, I'm just throwing ideas out there to help analyze the situation.

It may be that the HOA has no right to the lot in total and every owner is due the proceeds for their 1/12th portion.
It's reasonable to think that might be the case. Or the HOA may be able to treat it as community property.

I will of course consult with experts, but I am looking for replies specifically from people who have had experience with a similar situation.

Maybe I'll write up an article on the experience once all is said and done.

Any more helpful information is greatly appreciated.

Gerelee,
CA may be different, especially when it comes to condos.

Given the information so far it appears the vacant lot is common property and as such belongs to the association. Any planning restrictions, etc. would "run with the land" and the way it is platted now will be the way you have to deal with it. My condo in SC has in our CC&R's many restrictions and considerations. Some of them that apply to your situation would be that you all cannot "Partition" any part of the Common Property unless you have 100% vote. In other words, not likely you will be able to do much with this property without these requirements being met. As to the value of the property I am as unsure as everyone else, in regards to carrying this as some kind of Reserve Account.

I would think even if you could turn it into cash, it would still be questionable if you can give the money equally to each owner, I don't know. Now if the Association had a offer on the property that was solid, and wanted to sell this land as platted, it would require a petition to the court to over ride this "running with the land" state mandated restriction (in SC). In other words they would have to make a compelling argument that is best for the association and the state/county restriction on the property could not be compromised.

I strongly suspect, CA or SC it is going to take some doing, and probably would be expensive. You could look into changing the Master Plan of the county. I think there may be some answers in the County court house if you can go to the right office and push right buttons. Certainly you need the Master Deed as registered at the court house when the land was submitted originally at the Planning Office.