Friday, April 04, 2008

Foreclosures force HOAs to cut corners on upkeep

Foreclosures force HOAs to cut corners on upkeep
Fred Pilot sent this along. I have been pointing out the fiscal fragility of HOA and condo associations for years. Major challenges such as earthquakes, floods, construction defects, tort suits, and other unforeseen events can push an association into insolvency. Along comes the foreclosure tsunami that cuts off anticipated assessment revenues, and now we have associations discovering that they are in financial trouble. If this new level of local government is to be funded entirely by homeowners, in addition to being run by homeowners, it is easy to see that as the owners to, so go the associations.

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