As buyers compare their condo options, the monthly condo fee is almost
always a consideration, but unfortunately, the scrutiny often stops
there. It is imperative that potential condo buyers take a look at the
condo association’s financial stability as well.
If a condo
association runs out of money for necessary repairs or services, they
may go into debt, which becomes the responsibility of the residents.
When this happens, a special HOA assessment
generally occurs, which means that all the residents must pay into the
condo association, beyond their normal monthly dues, to regain financial
stability. Of course a majority vote is needed to initiate a special HOA assessment—but many times this is the only sensible course of action.
If a vote goes through to collect a special HOA assessment,
condo owners are required to come up with the sum. And if an owner
refuses to pay, the association can place a lien on the unit and even
foreclose on it. Many condo associations won’t go this far, but then
necessary services like snow removal or landscaping may end up being neglected for long periods of
time—and property values can drop sharply.
A savvy condo buyer
can avoid all of this. Review the financial status of the
condo association and connect with key players on the condo association board. If you are
thinking of making a condo your new home, get someone to help you
make smart choices.
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