Housing Meltdown Fallout: HOAs Getting Pinched

NationalMortgageNews reports in the wake of the housing industry crisis, homeowners associations (HOAs) are having to rely in some cases on special assessments to make up for vacant units in foreclosure or otherwise unoccupied. Normally HOAs levy a monthly or yearly assessment to help pay for snow and trash removal, building, landscaping, and road maintenance, as well as clubhouse and pool upkeep, and other amenities. Nationally, an estimated 315,000 associations and condominium communities are home to 60 million Americans. According to a Community Association Institute survey, 30 percent of the 600 managers say three to five percent of their units are empty, and over 70 percent of the bank-owned properties are behind in paying the assessments. Association delinquency rates exceeding five percent have jumped from 22 percent six years ago to 63 percent today. “High delinquency rates place tremendous pressure on associations to meet their obligations to the homeowners who are paying their fair share,” says CAI Chief Executive Officer Thomas M. Skiba.

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