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Mortgage Crisis Can Hurt Condos

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By CHARLES J. KOVALESKI

The Tampa Tribune

Published: August 21, 2008

Condo owners who are current with their payments can be affected by the mortgage crisis when others hit foreclosure. When neighbors don't pay their bills, the condo association falls short of revenue and, the next thing you know, the grass isn't green but the pool water is.

Typically, condo associations pay the bills for community maintenance, insurance and management. Funding comes from owners. If they stop paying, the community suffers. What are the options for associations and owners?

Enforce collections: Associations are obligated to collect late assessments and dues. Groups should follow their procedures to collect and those should be legally enforced.

Fees should never become so high that they're unpayable. Property will deteriorate if associations cannot operate. That will lead to more foreclosures, so enforcement is good for the well-being of the community.

Renegotiate service contracts: A bankruptcy filing may forestall financial problems for associations but only temporarily if the issue is dwindling income and not rising expenses. At that point, it might be time to call service providers - garbage pick-up, roofers, landscapers and the like - and ask to revisit the contract. See if a new payment schedule can be reworked so that services, even if reduced, will continue.

Consider a one-time fee: An association can enact a one-time special payment. Although that would be paid for only by owners not in foreclosure, the idea is to bolster the association for the good of the broader community.

Participate in the process: The association is there for owners, so go to the meetings. Ask questions. Keep board members working for the interests of the community.

Charles J. Kovaleski is president of Attorneys' Title Insurance Fund, Inc. based in Orlando.

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