Wednesday, January 23, 2013

Owners stuck with a failed condo project

The Privatopia Papers: In Carrboro, working-class condo owners must pay $...: In Carrboro, working-class condo owners must pay $5,400 fee—in three weeks | Orange County | Indy Week : The fees are intended to generate n...

If you read the entire article at the link above, you will see a perfect example of one generation of owners passing deferred maintenance on to the next generation and so on until the building becomes an obsolete condo project at the end of its life. At that point, since it is essentially an apartment house owned by multiple owner/tenants, there is no source of repair funds other than the remaining owners and it is unlikely they will be able to raise the necessary capital. This happens because previous boards of directors wouldn't make the tough decision to raise assessments sufficiently to maintain reserves for repairs.



3 comments:

  1. Tyler wrote an excellent piece on "Why Members Don't Care" which may help to explain how these projects die. My feeling is that like much in life, most people are more concerned about what they want, than who raised the cow that became their most recent hamburger, or why the building
    codes that people think are meant to protect them from shoddy construction offer no protection at all.

    There are usually many different ways to do a thing right, and we could agrue forever about which one is the best, but when it comes to doing condo management wrong, I think it normally comes down to either a Board's ignorance of their fiduciary duty, an incompetent
    manager, or a manager who's unwilling to risk being fired for refusing to enable a Board that is not behaving reasonably.

    Tony Verreos
    Verreos Insurance Agency
    Brisbane, CA

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  2. I don't think they should have to pay, the government always find ways to take more money from the public it's not on.

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  3. The $5400 is for each unit owner. As much as I hate to say it, that's a bargain considering that we have seen special assessments of as much as $40,000/unit for similar problems.

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