Tuesday, May 13, 2008

As Dues Dry Up, The Neighbors Pay - WSJ.com

As Dues Dry Up, The Neighbors Pay - WSJ.com: "Here's another consequence of the troubled housing market: Some homeowners associations are running low on cash."
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The problem is that for quite some time before people default on their mortgages and get foreclosed on, they stop paying assessments. After foreclosure banks usually don't pay the association either.
Nice to see the Wall Street Journal taking note of this problem that I have been writing about for quite a while now. The people who hate associations may think this is great, but it will hit owners. Why? Because of owner A doesn't pay, owners B-Z have to pay instead. That applies all the way up to association bankruptcy, appointment of a receiver, to infinity, and beyond.

1 comment:

Anonymous said...

This article appeared to give the impression of conducting a geographic sampling of various HOAs and management companies. Unfortunately, there was nothing independent about the interviews.

All the management companies interviewed are actually aliases of Texas Sen. John Carona. The Board members interviewed similarly appear to be from Carona "managed" HOAs.
See, e.g.,
www.associaonline.com/siteapps/AllOfficesList.aspx

Sen. Carona is becoming exposed for writing self-serving legislation that benefits his management companies to the great detriment of constituents. Undoubtedly, this article is part of Sen. Carona's plan to create legislation to give HOAs even greater power to collect money. It's about forced consumption of services on homeowners that don't want the services. Services, by the way, which are typically of little or no value to the homeowners.

Hopefully as Sen. Carona's antics get exposed, the Texas voters will send Sen. Carona packing this year. Nonetheless, voters need to be very wary over what powers his organization will try to give HOAs in order to extract ever more money from the homeowners for benefit of vendors like him.

Carona's aliases include:
Associa
Association Community Websites - falsely claims HOA board meetings are open to the public; homeowners have to agree to allow Carona to resell information collected if they use the site; tries to force homeowners to use the website through HOA mandates; encourages homeowners to indicate names and ages of children and submit HOA-related communications through site.
AssociaPolicyholders - association insurance. After selling this insurance, his management agreement wants 10% of any payout if a claim is made on the policy, not as a deductible but rather as "compensation" to the management company that sold the insurance policy.
First Association Bank - serves only associations
Association Times - newsletter
Community Archives - provides copies of "community" documents
AssociaPower - resells electricity to "multi-residential" communities. Compensation based on amount saved. He'll tell you how much you saved.
about 93 management company offices including those listed in the WSJ article
There's quite a bit more...