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For better or worse — dealing with condo and homeowner associations

Originally reported in our sister publication Vero Beach 332963INDIAN RIVER COUNY — If finding and buying a new home is like falling in love and getting married, then the in-laws in this metaphor would be the homeowner association or condo association.     For better or worse, richer or poorer, in many beachside communities they come along with the package.  You cannot get rid of them. Sometimes you even have to make them like you before they’ll let you into the family. Well, at least real-life in-laws don’t ask for quarterly payments to stay in good graces. Homeowner and condo associations vary greatly in their level of intrusiveness, activity and efficiency. Some associations, usually larger ones in communities where many of the residents are off-site or simply do not care to have their fingers in the menial tasks and decisions, convene to set broad policy, but hire a professional manager to run the show. Some smaller communities, or ones which do not wish to relinquish the control — or the salary — to a manager, contract for property management services, but rule on day-to-day matters as a hands-on volunteer board. Depending on the personalities involved and how they interact with one another and with the residents, this could be an asset or a liability. Dues and assessments also run the gamut, depending on the size of the community and the amenities attached to it, so when figuring out how much house you can afford, it’s a good idea to get the scoop on association dues and any major upcoming assessments or projects on the horizon that could bust your budget. Also, with economic times the way they are, finding out if the association is suffering from delinquencies or battling foreclosures would also be a good idea. If there is no reserve to cover these shortfalls, eventually the balance of the paying homeowners will need to kick in to make up the difference. As long as we’re talking about bills, if you’re buying in the next month or so, you might want to find out what expectations the association has about passing along to residents the burden of ever-increasing water, sewer, irrigation water and electricity bills for common-area maintenance. Your Realtor is your first line of defense when it comes to deciphering the code of the homeowner or condo association. He or she, if a veteran sales professional in the neighborhoods where you’re shopping, should know the general reputation of the Board of the association, and whether or not you might expect them to be a help or a hindrance. Marsha Sherry is an expert in condo and homeowner associations. As broker of The Moorings Real Estate Company, she specializes in selling homes in The Moorings, which encompasses 15 separate condo associations, a homeowner association and an umbrella association which overarches the other 16. “They are all different,” Sherry said, describing the tapestry of different temperaments and tastes that exists in and among the different Boards in The Moorings. Sherry said that, as a Realtor, it is her responsibility to gather from the seller the information her clients need to decide if an association is right for them. “When an association is involved, a buyer gets three business days to review the paperwork about the association and if there is anything they don’t like, they can get out of the contract,” she said. “You have the opportunity to know as much about your condo association as you want to find out.” The information available, both through public record and what must be provided in the condo rider documents, includes the size of the quarterly fees are, any pending assessments and whether the association has any reserves to cover them. She said buyers also have an opportunity to review the budget of the association. Some things that buyers might want to look for are delinquencies due to nonpayment of association fees or foreclosure of homes in the neighborhood. Other questions a buyer might pose include whether or not the association board plans to raise assessments to offset recent increases in reuse water rates for water used for irrigation.    “Here at The Moorings, we’re not in the position that some places are,” Sherry said. “But I think all associations are reviewing their budgets and looking at the things they can control because the utilities are something we can’t control.” Doug Distl has been community manager of the Carlton condominium just north of John’s Island for the past three years. He said the Carlton is not dealing with the current electricity woes felt by much of the barrier island since the buildings in his community get their power from Florida Power and Light. While it has seen increases in its water bills, Distl said they are not a problem. “We are experiencing the higher rates for the water, but I’ve talked to the City and it seems that’s just the way Florida is going and that we’re actually playing catch-up on the rates,” Distl said.  “We don’t have the electric issues with the common-area lights because we’re on FPL and that’s only gone up slightly. “Our property insurance has actually gone down and flood insurance has gone up a little bit. We’re all paid up, so we’re doing great.” The Carlton, with only 36 luxury condo units plus several single-family homes, is not facing any delinquencies or pending foreclosures at this time. “We have the greatest group of owners on the beach, and the Carlton Vero Beach has a very proactive Board,” Distl said.  “It’s a great team and they’re not overly controlling.” Beachside real estate attorney Rebecca Emmons of Stewart and Evans sees the inner-workings of associations from two perspectives — as the attorney for home buyers and as the attorney for the associations themselves.   She said the association boards have a fiduciary responsibility to all the owners in the associations and that they should not, in an attempt to be good neighbors, let arrearages lag too long. She said if an association allows a home or condo owner to go two quarters without paying and the association does not file a lien, it is  putting itself at risk of not being able to collect. Though she’s heard that some local associations are having a hard time with abandoned homes and foreclosures, Emmons said the associations her firm represents are not seeing an upsurge in the number of liens having to be filed against owners for delinquencies.”Most people try to keep current with their association payments because they usually aren’t significant and because they see their neighbors every day,” Emmons said. “Legally, that homeowners association or condo association has the same lien rights that the mortgage company has – you could lose your home.”

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