Monday, August 29, 2011

Dispute could force out residents of rundown condo | The Tennessean |

Dispute could force out residents of rundown condo | The Tennessean |
Residents of a West Nashville condominium complex could soon be forced to search for new homes because of a complicated dispute between absentee real estate investors and their homeowners association.

The West Meade Condominium complex, located off Charlotte Pike next to the Nashville West shopping center, has become dangerously rundown because the homeowners association doesn’t have enough money to pay for repairs.

Yet another collapsing condo project. I expect this sort of story to become commonplace over the next few years. Thanks to Fred Pilot for this link.

1 comment:

Anonymous said...

"Lack of funds could force the association to declare bankruptcy and sell the condo property,"

As Professor McKenzie said in the recent Urban Institute video:

"The condominium…it's kind of almost a fictional real estate interest. These things can only exist by statute…Condominiums can only exist where statutes authorize them to exist. So we've had them since about 1960."

And as Steven Siegal wrote back in 2007:

 "Before 1960, the condominium form of ownership was unknown in the United States. Beginning in the early 1960s, the states began enacting statues authorizing the condominium form of ownership, principally in response to the enactment of the National Housing Act of 1961, which extended Federal Housing Administration mortgage insurance to the condominium form of ownership. See McKenzie, supra note 2, at 95. By 1967, all fifty states had enacted condominium statutes. Id. at 95–96." ("The Public Role in Establishing Private Residential Communities." Urban Lawyer. Fall 2006. Footnote 23 on page 869.)

Tyler Berding has written extensively about the condominium ownership being an unsustainable form of real estate -- much of which should be required reading for our policy makers.

Since there is no common-law basis for condominiums, condominium ownership can only exist by statute, maybe it's time to think about prohibiting condominium ownership -- or at least any new construction of condos. It's a failed legal fiction that has caused a lot of harm to both the individuals involved and the economy as a whole.