Collateral Foreclosure Damage for Condo Owners
Barbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway.
Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee.
Even though she pays more, her building has broken washers and dryers and unusable exercise equipment, and her hallway is spotted with mold.
“It’s not fair,” said Ms. Sanz, a 32-year-old event planner. “The first two years, I enjoyed all of the benefits of living in a condo. I’m disappointed now. I hate the way the building looks.”
When people buy condos, they expect their monthly fees will cover many of the responsibilities that they would otherwise have as owners of single-family homes, like cutting the grass and paying the water bills. Now many find themselves nagging each other in the hallways to pay their assessments and adding special fees while haggling over chores. In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community.
“What motivated people to go into the condo market in a way that led to overbuilding was the expectation that it would be easier than owning a home on a maintenance basis,” said Sam Chandan, chief economist at the real estate research firm Reis. “The downside is that your fate is tied to 50 or 100 other people who may stop making their condo payments.”
Emphasis added by me.
I've always thought condo and co-op ownership was a stupid idea.
It's basically buying a drawer in a chest or a cubicle in an office.
There's no land to plant emergency food. And you're surrounded by other people on all sides. Forget privacy too.
So, aside from the misery of the people going through it (well, not really, didn't they frikkin think?), I'm glad to see my derogation of them borne out.
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