MESSAGE ABOUT CORONAVIRUS  More Link

Selling the Increase Raising Fees Without Launching a Rebellion

When these decisions have to be made, boards must consider the best way to include residents in their thought process. And when the board of trustees comes to the conclusion that fees must be raised, hopefully they’ll announce it in a manner that will create the least amount of angst and worry for the dozens, if not hundreds, of families that will be affected.

One thing is clear: matters of money and finance are not undertaken lightly these days. “People need to remember that when they buy a condo, they’re living with people close to them and with whom they will be sharing experiences,” says James J. Caruolo, a Warwick, Rhode Island-based attorney. “It has to be the needs of the many over the needs of the few. Board members are not going to please everyone. Elected officials, after researching an issue, discussing it and talking to experts, have to remember that it is incumbent uponthem to stick to their decisions no matter what some may say.”

For many community associations today, those decisions are being made for the most part because of home foreclosures and the tough economic pressure those foreclosures are putting on shared communities. Not only are associations faced with homeowners who may not be able to pay their mortgages, let alone their monthly dues and assessments, they also are faced with banks that might not be paying those dues.

Big Losses

Even if a resident has left the premises, the lender may not have to pay monthly dues and assessments until it forecloses. After the foreclosure, in some New England states, the lender is required by law to pay six months of what is owed, meaning that many associations can still lose a substantial amount, depending on how long the property is in flux. “With property values decreasing, we’ve seen banks suspending or canceling foreclosures so they won’t have to pay the fees,” Caruolo says. “They’re not required to foreclose, so this can go on for a while. But it’s not the bank’s obligation to make sure the association gets its dues.”

Vacant properties also can lose money for the association if they start to decay. A resident may have moved out and the electric bill has now gone unpaid. If the property is in a cold climate and this happens in the wintermonths, pipes could burst without the electricity generating the heat. That can leave a wet mess that can spiral into a mold issue, which can then become a health issue.

Read More...

Related Articles

Tapping Reserves in a Time of Financial Crisis

An Option to (Carefully!) Consider

Coping with Cash Flow Problems

Fallout from COVID-19 Hits Communities’ Bottom Lines

The Price is…Right?

Adjusting Valuations for Pandemic’s Impact