[quote=CONCHO]Just wait until those HOAs start biting the dust. There are going to be a lot of folks that stop paying their fees, and combined with all the empty units, some HOAs are going to get in big trouble fast. I would be very wary especially of the larger buildings because their costs are high. If the elevator breaks and there’s no money in the HOA account to fix it, you might be hoofing it up 15 flights of stairs with your groceries.[/quote]
This varies dramatically by building. There are three big HOA money issues:
(1) Unpaid HOA dues
(2) Deferred maintenance
(3) Really Big Defect Issues
Most downtown condos are just dealing with (1), although El Cortez is dealing with both (1) and (3). In my building we’ve had a number of foreclosures but they generally get sold pretty quickly. But we’ve got a lot of HOA dues that we won’t collect, despite the dreamers on the HOA board. But I’ve done the math and assumed that we’ll have to have a special assessment of some kind of $2K-$3K per unit at some point to catch up. But that’s not a big deal to me. We’ve had no maintenance or defect issues, although the building’s just 5 years old.
Issue (2) can be a whopper, especially if the complex is really old and shit’s been deferred for years on end. But most of the stuff downtown won’t have these issues for quite some time.
Issue (3) can also be a whopper, but you won’t see it for newer complexes because the developer has to carry insurance that will cover defects for 10 years after its built.
My point is that – downtown specifically – it’s generally issue (1) that’s hurting the HOAs right now, but it probably doesn’t amount to more than 2% of each unit’s value. So, it’s an issue, but it’s not a massive issue like deferred maintenance, which can lead to huge special assessments.
