Florida Condo Owners Face Another Hurdle In Selling - Condo Board Rejection
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You own a condo in Florida and all you want to do is sell it. Take your loss, lick you wounds, and get out of proverbial Dodge. So after months of lowering prices you find a the buyer in the haystack and that same buyer squeaked out and qualified for their mortgage. Time to open the bottle of champagne that you had saved, right?
Not so fast. After years of getting burned by poor paying owners, condo associations in Florida are taking a much tougher look at prospective buyers. The problem is that mortgage companies do not put the ability to pay the condo fees into their equation and the condo associations have been getting beaten up by a growing percentage of owners just not bothering to pay their association fees.
So now the condo associations are rejecting the marginal candidates from purchasing into the association. While frustrating to sellers this is very prudent by associations. When property values were soaring the condo association could place a lien on the property and get their money that way. But in a stagnant market, there is no equity to attach so now it is in the condo association’s best interest to investigate the ability to pay up front, and reject anyone who could be marginal.
Tough business but smart business. However, we are looking at another layer that is slowing down the market in Florida real estate sales.
Boards statewide have begun toughening their standards because of concerns about applicants’ ability to pay monthly maintenance fees. In the late 1990s and early 2000s, buyers were qualifying for low adjustable-rate mortgages with little or no money down. Unable to pay both their mortgage and association obligations, the new owners ignored their maintenance and special assessment obligations.
Boards were stuck. They couldn’t foreclose because the new owners had no equity. That forced all other owners to pick up the unpaid share of the common expenses, such as water, insurance, pest control, pool maintenance and landscaping. via South Florida Sun-Sentinel.com.
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Comment by Karl Lingenfelder on 10 August 2007:
Another lesson in why Buyers should not ignore C.C. & R’s and how they can affect saleability and values. A hard lesson under current conditions.