[thelegges]

Originally Posted by LuvtheVillages

When buying a condo, due diligence includes looking at the condo association's financial reports to be certain that there is a large reserve for future big maintenance items.

Many condo owners prefer low maintenance fees instead of having a sufficient reserve. But the day always comes that something big needs attention.

Great post, when we looked at ocean front condos our first concern was age, last inspections and repairs. That was in the 2010, we looked at higher fees for maintenance budget so 20 plus years down the road there would be funds to offset major repairs. Some don't plan for major issues in retirement, that may someday cause you to return to working class

[Rainger99]

Originally Posted by OrangeBlossomBaby

He decided that property owners only had to pay one HOA fee per owner, rather than per unit. So he only paid $300/month, just like everyone else - even though he owned almost half the units in the community.

I am not a lawyer but that sounds illegal - or at least should be illegal. He had half the units and only paid one HOA fee?

Any real estate lawyers on TOTV?

[justjim]

Originally Posted by Rainger99

What due diligence should they have done?

The law was passed after many people bought their condos.

You are spot on. Just Like government generally does, Florida overacted to the one condo building complex collapse and past some unrealistic laws that has caused damage to condo real estate values along the coast of Florida. Now, they are trying to backpedal some of the regulations to help the situation.

[OrangeBlossomBaby]

Originally Posted by Rainger99

I am not a lawyer but that sounds illegal - or at least should be illegal. He had half the units and only paid one HOA fee?

Any real estate lawyers on TOTV?

It was an HOA. It was run by a board of directors. The HOA documentation was voted on by homeowners. The developer was a major homeowner, and if only 40% of the OTHER homeowners voted on something, his major ownership's vote determined the outcome of the vote. He had 40% of the voting power, with individual homeowners carrying the other 60%. But many were absentee landlords who never showed up for any votes at all.

[Michael G.]

Originally Posted by Altavia

Not uncommon for Beach properties here. The rerbar and concrete rots over 20-30 years.

Add beach erosion adding to the deterioration of some beach side cities like Daytona.

Many years ago when I lived in Wisconsin, the DNR in state parks moved all the camping sites bordering the edge of lakes and rivers back 50 feet to prevent erosion.

Why can't Florida and all other coastal states get wise on building so close
to water and notice the erosion problem.

[Girlcopper]

Originally Posted by Michael 61

Before my lifestyle visit to The Villages, I contemplated maybe retiring to a condo community in SE Florida, to be close to the beach and warmer winters. So glad I didn’t end up making that retirement choice! My heart goes out to the many retirees that are being hit with skyrocketing HOA increases as well as astronomical assessments. We are fortunate here in The Villages not having to endure those issues.

Well. You have an hour at least to get to a beach, no ocean views, hardly a breeze in the humid summers. Most people who buy on the beach can afford to live there and don’t have to move to the center of the state to survive

[Caymus]

Originally Posted by Girlcopper

Well. You have an hour at least to get to a beach, no ocean views, hardly a breeze in the humid summers. Most people who buy on the beach can afford to live there and don’t have to move to the center of the state to survive

You are going to upset some people.

[Dlbonivich]

I had a beautiful condo on the gulf coast before moving here. The problem is people that live in them always want to differ maintenance. Now maintenance is mandatory for safety. I bough for 320 sold for 620 and it is now worth 1.5. So I think the person who bought it can borrow against it for the mandatory maintenance. I loved my place.

[Jazzman]

Originally Posted by Rainger99

What due diligence should they have done?

The law was passed after many people bought their condos.

Prior to the law being passed there was no requirement for the HOA to keep a specified amount of money in the reserve fund, the account used to pay for major maintenance expenses or unanticipated expenses for the property. That was the issue and the HOA financials are most of the time overlooked by the prospective owner. South Carolina is another state where there is no requirement to maintain any amount of money in an HOA reserve fund

[Susan1717]

One must consider their life priorities and what they enjoy. Also finances come into play, but if the ocean, water, and boating are your passions, then being near the water is worth the cost. ]

[ChicagoNative]

Most HOA boards I’ve experienced are concerned with keeping assessments as low as possible. The residents like it that way and usually squawk at even a hint of increased fees, no matter how small. That’s all fine until they start deferring maintenance and ignoring reserves. The HOA neglect of their fiduciary duty always catches up and results in either huge special assessments, insurance premiums that amount to highway robbery, tragedies like Surfside, or some combination thereof.

If you are looking to buy a condo and the reserves are underfunded, walk away!

[kansasr]

Originally Posted by CoachKandSportsguy

HOAs are maintenance nightmares because of the fact that they are HOAs with socialism fees.. .

Condos are basically designed to socialize expenses,(pay in and someone else does the work) and asking people who love socialization mentality to now spend money on maintenance, runs counter to their spending styles as well as tendency towards maintenance ineptness in the first place.

Condos are huge cluster fusses. . as well as located in places where maintenance is higher than normal, (mostly near the ocean where the salt in the air and the sandy soil creates a lot of potential erosion and instability)

Sounds to me like you’re describing The Villages!

Ask the residents of District 14 about the 56% increase in their district assessment for next year about what they think about “it won’t happen here”.

[sowtime444]

I looked at a condo in The Villages for sale (the Spanish Springs townhouse-style condos). I knew about the upcoming law changes so I asked the association president to see all of the documents such as the "Structural Integrity Reserve Study" now required by law. I concluded that the condo fees would jump to around $650/month per unit next year, and be $700/month by 2030. Basically you are paying through the nose for landscaping fees for what amounts to a postage stamp front lawn - because you have to pay for the upkeep of the surrounding land as well which The Villages refused to take back without the condo association paying THEM. There are some things which are fair such as exterior painting. But the roofs are costing $30,000 each which is a ridiculous price even though they are changing them to metal. So you are basically forced to pre-pay for what would have been a special assessment. If you kept the money with a money manager yourself instead you probably could make interest, and then better afford the special assessment. But giving it to the association up front to sit in an account, I'm not so sure.

What I wouldn't do is buy a condo in a high-rise in Florida, because the costs to fix anything in a building like that can skyrocket. Especially if there is a common-area HVAC system, etc.

[bmcgowan13]

Originally Posted by LuvtheVillages

When buying a condo, due diligence includes looking at the condo association's financial reports to be certain that there is a large reserve for future big maintenance items.

Many condo owners prefer low maintenance fees instead of having a sufficient reserve. But the day always comes that something big needs attention.

LUV-You nailed it. Many (Most?) HOA Board Member are solely interested in keeping MONTHLY fees low and have little regard for setting aside monies to pay for the annual wear-and-tear on the "big ticket" items.

Even in our private home we set aside a modest amount to escrow for painting the house every 7 years ($50), 20-year roof ($75), 10-year water heater ($7), etc. It adds up to about $110 per month. This is like our condo/house reserve. Sure we would love that extra $110 per month to spend on restaurants and the like but we know we need to budget for those items down the road.

It's like the game of Time Bomb (I assume everyone on here is old enough to remember that one!). Low fees are fun until the replacement costs for the roof, pool, stucco, rebar, etc come due. Unfortunately, the state law burdens the people owning the beach condos today with the burden to payback the monthly reserve for all those people that lived in the condo (with unrealistically low monthly fees) for the past two decades.

It is sad, many Florida retirees are going to get financially crushed with these fees...

[Ski Bum]

Originally Posted by ChicagoNative

Most HOA boards I’ve experienced are concerned with keeping assessments as low as possible. The residents like it that way and usually squawk at even a hint of increased fees, no matter how small. That’s all fine until they start deferring maintenance and ignoring reserves. The HOA neglect of their fiduciary duty always catches up and results in either huge special assessments, insurance premiums that amount to highway robbery, tragedies like Surfside, or some combination thereof.

If you are looking to buy a condo and the reserves are underfunded, walk away!

Exactly! So you are going to spend $1M+ for shared space with 50 other people who pinch pennies? The end is inevitable.

First step is to ask (or go online) to see their Reserve Study. If they do not have one, they are in deep financial trouble. If they do have one, check the suggested reserve balance against the actual. It's pretty easy to do.

Actually, the easiest first step is to check the HOA dues payment amount. If it is amazingly low, well, there is a reason why.