Daily Real Estate News  |  December 2, 2008  |   Condo Associations Struggle to Collect Fees
Condo associations are facing big challenges. With sales prices falling, many associations are having trouble collecting fees and assessments, which their communities depend on for upkeep.

The organizations face tough realities. Many owners simply don’t have the money to pay association fees and any increase or special assessments is strongly resisted even by those who are current on their bills.

"It's not unusual … for somebody to owe the association $10,000 to $15,000," says Lisa Franklin, community manager in Gaithersburg, Md. "You can only take those hits so long before it starts to have a dramatic impact."

Cutting back on amenities could be at least a partial answer, but it has a downside. These trims reduce the community’s value and drive away buyers, which in the long run makes the problem worse.

Lenders that foreclose on a property don’t pay delinquent association fees until a home sells and then they often will only cover fees accumulated after the foreclosure, ignoring the delinquent balance. The Community Associations Institute, a lobbying group for condo and homeowners associations, is trying to challenge that practice.

Source: Washington Post, Ranae Merle (11/29/08)