Wednesday, September 08, 2010
Financial crisis hits condo associations Amy Hoak's Home Economics - MarketWatch
Financial crisis hits condo associations Amy Hoak's Home Economics - MarketWatch: "The current problems only exacerbate what's been an issue for years, some say. Many condo associations aren't prepared for major maintenance jobs due to ill-funded reserves and insufficient planning, said Evan McKenzie, a political science professor at the University of Illinois at Chicago, who has written about homeowner associations."
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Oh, but condo owners do plan. First time buyers plan to sell as soon as they can afford a detached single family home. Last time buyers on fixed incomes plan to keep the assessments as close to zero as possible.
"When someone doesn't pay assessments of the community, they're picking the pockets of every one of their neighbors," said Andrew Fortin, vice president of government and public affairs for the Community Associations Institute."
This is the ultimate is misguided capitalism to equate unemployment with theft.
The current problems only exacerbate what's been an issue for years, some say. "Many condo associations aren't prepared for major maintenance jobs due to ill-funded reserves and insufficient planning, said Evan McKenzie, a political science professor at the University of Illinois at Chicago, who has written about homeowner associations."
But many condos buyers do have a plan -- and it isn't compatible with the long term financial health of the condo HOA.
First time buyers plan to get out as soon as they can afford a single family home. Last time buyers on fixed incomes plan to keep assessments as close to zero as possible.
That's the essence of the problem. Individual owners have plans and strategies, but they have no commitment to the collective ownership system they bought into. And yet, the entire institution is premised on owners being financially and personally committed to the collective. That's where coercion comes in. The professionals (lawyers and managers) make up for the failure of collective action by using coercion. If they stop doing that, associations will fail all over the country. Nobody will pay assessments and the rules won't be enforced. I realize that many readers of this blog would love to see that happen, but keep in mind that there are now millions of people who will lose everything if that happens. The owners are liable for the association's debts.
Professor,
Just to be clear, in your comment at September 10, 2010 8:28:00 AM CDT above, are you referring only to condominium/townhome associations, or all types of homeowners associations, including HOAs for single family housing?
I was referring to condos because that's what they asked me about. The same general concerns apply to HOAs as well. The difference is that condos are much more vulnerable, especially the old building converted from apartments and the low/moderate income "affordable housing" condo buildings populated by people with no money.
Dr. McKenzie you said:
"That's where coercion comes in. The professionals (lawyers and managers) make up for the failure of collective action by using coercion. If they stop doing that, associations will fail all over the country. Nobody will pay assessments and the rules won't be enforced. I realize that many readers of this blog would love to see that happen, but keep in mind that there are now millions of people who will lose everything if that happens. The owners are liable for the association's debts.'
Well, I believe those property managers, board member(s) and attorneys that have used coercion and fraudulent lawsuits, slapp lawsuits and any other scheme to lie and decieve the courts to steal innocent property owners homes, while destroying lives, families, reputations and careers should be held accountable and if that means they are forced in homelessness and the association bankrupt, so be it. Walk in an innocent victims shoes, in this mess and you will have an entirely different perspective. There has been no equality, no understanding in the courts for the homeowner being framed for the criminal activities of some and especially when we have the kangaroo court system and no one else in a 500 mile radius will report on the truth!
Interesting word, "coercion."
How fitting to the thieves, thugs, bullies and criminals, in some of these groups!
Coercion ( or ) is the practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats, intimidation, trickery, or some other form of pressure or force. Such actions are used as leverage, to force the victim to act in the desired way. ...
en.wikipedia.org/wiki/Coercion
Coercion:
means (a) threats of serious harm to or physical restraint against any person; (b) any scheme, plan, or pattern intended to cause a person to believe that failure to perform an act would result in serious harm to or physical restraint against any person; or (c) the abuse or threatened abuse of ...
oman.usembassy.gov/tip_definitions.html
coerce - to cause to do through pressure or necessity, by physical, moral or intellectual means :"She forced him to take a job in the city"; "He squeezed her for information"
wordnetweb.princeton.edu/perl/webwn
" I realize that many readers of this blog would love to see that happen, but keep in mind that there are now millions of people who will lose everything if that happens."
Well the scum of the debt creation and collection business will lose, but they were in a despicable "profession" to begin with. Not sure how other owners would lose. Also not sure what owners gain by maintaining the status quo. The status quo is pretty bad. Surely, it is hardly okay to tolerate human sacrifices and divesting homeowners of their property under the theory that this somehow preserves value for other owners?
By the way, after 30+ years of the same tired story, CAI still can't produce any epidemiological data to support their marketing hype about the value of involuntary membership corporations. Last time I looked, all those underwater places were involuntary membership burdened properties. (HOA/condo corporations)
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