Richard White: What happens when a CID tries to go banrupt?: "Q. If our condominium were to go into bankruptcy, what would happen to the condominium owners who are current on all assessments and repairs and own our condominiums in full with no mortgage? Would we still be able to live in our condominiums? — P.G., Miami
A. Usually the bankruptcy courts will not accept an association bankruptcy. Their feeling is that all the board needs to do is raise the fees. But let us look at a worst case scenario. Say more than half of your homes went into foreclosure and the fees were just overwhelming for the remaining owners. It means that none or few of your association services would be provided, no insurance, no payment of utilities, no repairs and no operations. The problem is that you could not sell your home for a fair market value and most banks would not provide the buyer with a mortgage if you could find a buyer. In my many years of management, I have only known of one condominium that successfully declared bankruptcy. There may be others but very, very few have been successful.
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If the association does go bankrupt the owners are still on the hook for the debt.
1 comment:
This guy is toxic. I read one of his 'advice' columns that supported the forclosure of several homeowners by the association for one months late payment of fees in St. Augustine.
With friends like this, homeowners don't need any enemies.
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