(This is a nice example of how a Homeowners Association Breaks Down its HOA fee, billed to Residents.. This Particular Development is the Collegiate Villa Condominiums, located in Manhatten, Kansas & is Very Well Maintained & One of My Favorite Communities in Manhatten.)

Condo and homeowner associations have tough time covering budgets

SOUTH FLORIDA – Feb. 24, 2009 – The pain being experienced by Florida’s condo and homeowner associations in the state’s epic foreclosure crisis worsened in the last half of 2008, forcing more to cut back services and levy special assessments to meet their budgets, according to a survey released Tuesday by the Hollywood-based Community Association Leadership Lobby.

The survey of 1,589 Florida property owners by CALL, a group formed in 2003 by Hollywood-based law firm Becker & Poliakoff, comes as Florida lawmakers begin to look for ways to address the impact of foreclosures on community associations, particularly condominiums.

Nearly two-thirds of association members responding online to the second annual questionnaire said foreclosures had created revenue shortfalls that caused them to postpone upkeep and repairs.

A majority of association members also reported having problems collecting fees from banks that delay the foreclosure process, the report noted. “Banks are taking so long to foreclose … it is placing an undue burden on those owners that do pay. And sometimes it’s beyond their means and they can’t pay. It’s a domino effect,” said Rosa M. de la Camera, a member of Becker & Poliakoff’s community association practice group.

Many condo boards have alleged that banks deliberately delay foreclosing on units to avoid paying monthly maintenance fees while still being allowed to avail themselves of a state law that caps the amount of delinquent fees they owe to the lesser of six months arrears or one percent of the value of the mortgage.

De la Camera said her firm was helping draft legislation, one of several proposals, that would require lenders to pay 12 months in past due association fees.

The cap, however, would disappear if a lender failed to take title to a unit one year after filing an initial foreclosure action. The bill has not yet been filed, she said.

“Not only do they have this larger exposure to 12 months instead of six months, but they also have to move the process along quickly or they get no cap,” de la Camera said. She said there was as yet no sponsor for the bill.

Until the issue can be resolved, associations will likely continue to cut expenses on things such as pest control, cable television and janitorial services while trying to pay the bills for basic utilities. Nearly 53 percent of respondents said they were reducing expenses and shoring up their finances, most commonly by hiking association fees.

Jackie Diaz-Sampol, co-founder of the Miami-based Cadisa Inc., a property-management company that oversees about 1,000 units, said at least two of her client buildings had more than 30 percent delinquency rates, putting the squeeze on already taxed homeowners.

“Some of these owners are just so overwhelmed with regular maintenance and then special assessments that some of them just abandon the units and walk away,” Diaz-Sampol said.

Copyright © 2009 The Miami Herald, Monica Hatcher. Distributed by McClatchy-Tribune Information Services