Insight: Underfunded U.S. homeowner associations get heavy | Reuters

Insight: Underfunded U.S. homeowner associations get heavy | Reuters

Thanks to Shu Bartholomew for this link.  The first sentence is just plain wrong, but overall the article highlights the important fact that many associations are in financial trouble--and it isn't just because of the 2008 crash in real estate values.



"Foreclosures on delinquent properties by homeowner associations were almost unheard of before the financial crisis of 2008. Now lawyers and real estate researchers say they are becoming more common as association funding bases shrink because of previously foreclosed homes' standing empty. About 70 percent of association-governed communities are underfunded, up 12.5 percent from 10 years ago, according to Association Reserves. The average association has financial reserve accounts - the amount required to maintain infrastructure and common areas - that are only funded at 52 percent, down from 60 percent a decade ago, its research shows.Tyler Berding, an attorney whose firm is consulting with a San Francisco condo homeowner association, suggests the problem is one of governance. "It's very much akin to the public pension crisis," he said. "Homeowners' associations are simply not putting enough money away to make the repairs and replacements they will have to make over time."