Mounting bills force condo associations into bankruptcy - Business - MiamiHerald.com: "At least seven Florida condo associations have filed for bankruptcy since the real estate market took a nose dive -- and there may be more on the way.
For a growing number of strapped condo associations, bankruptcy could be the last defense against their hallways going dark and their spigots running dry."
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And this is only the beginning.
3 comments:
And this one is yet another one of the suspicious ones. Note the first condo is identified as defaulting on a large payment for a "lease" of a pool and recreation center from the developers. Wonder if the owners thought they actually purchased that only to find out later that it was leased. The lease terms were undoubtedly established by the developer who sat on both sides of the lease agreement at the time it was made and then saddled the homeowners with a large financial obligation when turning over control of the condo association.
Look at the second one, another cable contract. Is this yet again one of these "bulk cable contract" agreements where homeowners are forced to pay for cable whether they want it or not? There is no reason why the cable company can't have individual subscribers. Instead this appears to be another involuntary customer deal where the homeowners are forced to purchase cable as involuntary customers.
The homeowners who are being cast as "deadbeats" aren't being permitted to limit liabilities moving forward. Instead, the CID industry players (developers, cable companies, etc.) are creating future liabilities at their discretion such that the homeowner has no choice. Times tough? You're still forced to purchase cable and at a price dictated by the cable company. This forced consumption of economically unregulated resources is a generic description of a major harm of HOAs throughout the country. The consumers are not the ones forcing the consumption and they are forced to consume and from particular vendors and at unregulated prices under threat of foreclosure on their homes.
Interesting. In a world where condos are structured and regulated as investment securities instead of real property, perhaps cable companies would hold signficant investment stakes in them given their ability to generate significant, predictable cash flows under the forced subscription scheme anonymous describes.
The bigger problem is that the very definition of "ownership" has been eroded. The owner is expected to surrender choice to third parties that don't represent his interests.
Cable companies don't need to own the property, they just want to burden them with an obligation to pay. Why do you think so many restrictive covenants prohibit all antennas including satellite and terrestrial TV types? It took an act of Congress to enable homeowners to install such antennas. However, homeowners can still be stuck having to pay for cable in addition to satellite.
HOAs were (and still are) used to force consumption of cable TV services under threat of foreclosure on the owner's property.
Here's links to old articles:
http://www.ccfj.net/JKBulkcableTV.html
(Note that Bradley J Gross is an attorney at Becker & Poliakoff a well-known CAI firm in Florida)
http://www.hoanewsnetwork.com/media/hoa_files_chapter_11.phpv
http://lakeashtontalk.blogspot.com/2009/05/live-oak-board-president-peppered-over.html
(Note that residents are "free to choose their own service providers, however, they are still required to help pay for the Bright House contract" a 15 year, $1.14 million/year contract )
http://www2.tbo.com/content/2008/mar/08/080012/na-on-the-hook-for-your-neighbors-cable-bill/
The FCC ruling so far seems only to void the enforceability of the contract with the HOA but does not give the homeowners any remedy from an HOA that is charging for bulk cable services. Perhaps there will be a court case where a homeowner sues a board for breach of fiduciary duty for incurring liabilities and threatening homeowners with foreclosure over unenforceable contracts.
This isn't just happening with video services, it's happening with telephone, internet, and related "wireline" services. Generally any de-regulated service. Undoubtedly the same is already occurring with electricity in parts of the country. Certainly at least one HOA management company kingpin has gone into the business of reselling electricity to HOAs.
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