The Washington Post recently reported on the rising number of condominium foreclosures due in part to the most recent economic recession, but also due to poor management of condominium communities. Low condo prices – often due to foreclosures – attract buyers, particularly in Florida where condos are especially popular.
However, many condo buyers can’t keep up with rising association fees.
The vicious cycle of getting priced out
Fees rise when maintenance is required or – sometimes – at the whim of the condo board. In some instances, it’s unknown what the board does with collected fees while in others the fees simply aren’t sufficient for maintenance. If the fees aren’t enough to repair elevators, fix crumbling stairways, or maintain common areas like the pool, these repairs don’t get done.
Meanwhile, residents face continuously rising association fees that could force them into foreclosure. When units are foreclosed on, there is less money coming in to keep up the condo community. Furthermore, banks that foreclose often allow condo units to sit vacant while waiting for the real estate market to get better. This leaves the condo board with even less money to work with so they have to again raise fees and assessments, leaving families who were once able to afford their condos facing foreclosure and eviction.
Dealing with condominium foreclosure?
There are many issues surrounding a foreclosure including your employment status, financial limits, ability to move, and credit status. But there are also solutions to financial struggles that involve your Miami condo:
- Bankruptcy (Chapter 7 or 13) may be the right option for you. You should talk to an experienced bankruptcy attorney to determine whether your complete financial situation warrants filing for bankruptcy.
- You might want to sell your home as a short sale, meaning the bank will allow you to sell the home for what you can get for it. This can be a particularly attractive option if your mortgage is under water, meaning you owe more than your condo is worth.
- A deed in lieu of foreclosure allows you to surrender your condo to your bank. However, this is not an option if you have additional liens on your home such as a second mortgage.
- Try re-negotiating your mortgage with your financial institution. Banks will sometimes allow homeowners to restructure their mortgage in order to make payments more affordable.
Condo foreclosure is on the rise in Miami, often due to circumstances outside a homeowner’s control. If you’re struggling with your condo payments and unable to simply sell it and move to a more affordable place, speak with an attorney who is experienced with foreclosure defense and bankruptcy. Re-negotiation, bankruptcies and short sales are tricky. Banks have attorneys protecting their interests; you should, too.