I admit, I got caught up in the idea of owning my own home, and really had no idea what I was getting into. Hindsight definitely is 20/20. But I absolutely positively can say, I do not regret purchasing my first property and I have no regrets buying in River East. What I do regret is purchasing a condominium.
I grew up in a strict household with a father who was no “softy” when it came to money and in turn, we didn’t buy anything unless we could afford it. So even though I had strayed somewhat from that mentality when purchasing my first property (by putting very little down) I had done the math, and I knew what I was in for. I also understood that in five years, one of my loans was going to begin to show it’s “arm” and adjust, at a rate I couldn’t even begin to fathom. So I kept my eye on the market, the interest rates, and the comps in my neighborhood and in May of 2008, I refinanced, combined the two loans and got a nice low fixed rate for 30 years. I have to give my dad props, he’d taught me to look out for myself financially and I had managed to keep myself out of the line of fire. I didn’t become a statistic and was “safe” from the upcoming crisis.
And right now, it’s downright nasty.
Our association is struggling, with a capital “S”. Gas, water, insurance, management, trash, maintenance, snow removal, etc is covered under our monthly assessment. In the winter months, homeowners see a drop in their electric bills, while the Association sees a spike in the gas bill, as our heat is a common expense. And as the Association’s income stream is drying up, homeowners such as myself are left to cover my neighbors’ debts. If one owner is unable to pay, then the rest of us are left holding the bag, so to speak.
Now don’t get me wrong, there is recourse. D.C. does have the “super lien” law that enables condo associations to collect at least six months worth of unpaid fees per unit in the event of foreclosure. This places our Association in line ahead of lenders to collect outstanding debts when the unit sells, but the process isn’t exactly quick, so we must wait patiently. An unfortunate trend that also seems to go hand in hand with foreclosure is that as banks acquire units, they are dragging out the process of transferring the title, so the obligation of keeping condo fees current while they “own” the unit, is not on their shoulders, thus pushing our association into even more debt.
In order to compensate for this lack of income the condo board at my association wants to raise the fees, but since they can no longer count on 40 homeowners to pay, they are creating budgets off of the 10 people who do pay. As an example, we'll say it takes $20,000 to keep our Association up and running every month (all utilities, maintenance, etc). Divide that by 10 dependable homeowners, and you see an adjustment to $2000/mo per homeowner in fees. I can’t fault the Board for thinking like this, they are doing what they can with both hands tied behind their backs, but to force innocent homeowners to pay their neighbors’ debts is difficult to stomach, especially when the condo fees exceed your monthly mortgage payment. It's the one part of condo life that I wish I had truly understood when I purchased five years ago, hence my regret with purchasing a condo at all. The financially responsible homeowners of my association are getting punched in the face over and over again by their own community with no end in sight.
And while we pay an exorbitant amount of money to keep our heads above water, we've watched our property decline in the process. Last month after a handful of people paid (one handful, not two), the water company sent a disconnect notice for one of the buildings. Those same people who had just written checks, handed over additional money to keep the water and the insurance current. Unfortunately, this will not be a one time occurance, as we didn't have enough to pay management or the gas company or the trash collectors, etc. The cleaning and maintenance crews were fired long ago and it's up to those of us who care, to pickup after everyone else in order to maintain the premises...
It's a scary thought, but what happens when the few of us who do pay, can no longer support the masses? Do we all get put out in the cold? It looks like that might be the case.
Recently, condominium associations in Georgia, Florida, and Massachusetts are suffering similar fates. Buildings are being condemned due to water getting shut off, trash piling up, and just general lack of upkeep within their associations. Homeowners who have never missed a payment on their mortgage, but just can't afford to make up for the massive shortfall of income are losing their homes. There is no bailout for the financially responsible condominium owner. It's just tough luck. We took a gamble, and bought into something, thinking we could depend on our neighbors to build a community. And at this rate, condo owners across the country are finding it's a gamble that we just might lose.
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