Condo boards everywhere are unprepared for serious repairs
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Re: Condo boards everywhere are unprepared for serious repairs
#2I would be extremely reluctant to own a condo because condo boards revert to the mean person's attitude to solving problems of putting it off until it is staring them in the face.
Grandparents owned one where the board deferred thousands in repairs until it became hundreds of thousands.
Re: Condo boards everywhere are unprepared for serious repairs
#3I would be extremely reluctant to own a condo because condo boards revert to the mean person's attitude to solving problems of putting it off until it is staring them in the face. Grandparents owned one where the board deferred thousands in repairs until it became hundreds of thousands.
There is an easy fix. Condo finances should be public record, and when repairs are needed, the local code/planning/inspector office reviews with the condo board, approves if necessary, and then puts encumbrances on the units in the complex. Those who can afford the cost pay right away, those who can’t have essentially borrowed against their equity to finance their share of the repairs, with the loans paid back with interest when the property is sold.
Transparency is one part, but also independent oversight and enforcement of the work necessary.
Re: Condo boards everywhere are unprepared for serious repairs
#4I would be extremely reluctant to own a condo because condo boards revert to the mean person's attitude to solving problems of putting it off until it is staring them in the face. Grandparents owned one where the board deferred thousands in repairs until it became hundreds of thousands.
Not only that, but with international buyers, they might only be interested in holding the asset for resale.
And the contractor building the place knows it...
Re: Condo boards everywhere are unprepared for serious repairs
#5I would be extremely reluctant to own a condo because condo boards revert to the mean person's attitude to solving problems of putting it off until it is staring them in the face. Grandparents owned one where the board deferred thousands in repairs until it became hundreds of thousands.
There is an easy fix. Condo finances should be public record, and when repairs are needed, the local code/planning/inspector office reviews with the condo board, approves if necessary, and then puts encumbrances on the units in the complex. Those who can afford the cost pay right away, those who can’t have essentially borrowed against their equity to finance their share of the repairs, with the loans paid back with i…
This is the right answer. Some repairs should be mandatory, if the owner can't pay it should be treated as any other debt. If the owner can't afford repairs, it should sell the unit, otherwise the damages are greater for all other owners.
Re: Condo boards everywhere are unprepared for serious repairs
#6I would be extremely reluctant to own a condo because condo boards revert to the mean person's attitude to solving problems of putting it off until it is staring them in the face. Grandparents owned one where the board deferred thousands in repairs until it became hundreds of thousands.
I imagine the phenomenon is due to multiple people being responsible but no singular person being accountable. There is probably a board director / president that SHOULD be accountable, but it's easy for them to either consciously or subconsciously blame the rest of their board for inaction.
https://en.wikipedia.org/wiki/Responsibility_assignment_matr...
Re: Condo boards everywhere are unprepared for serious repairs
#7I sat on my condo board for a decade and was president for two years. My experience is that the board is not the problem - the non board sitting owners are. Our complex was comprised of 5 separate 3 story buildings. Three of those building had bad water leaking problems but when we tried to raise money for repairs - the people who weren't suffering any interior water damage wouldn't vote yes. Many buyers don't read the fine print or dig into the boards finances before they buy. We ultimately passes a special assessment but not without some serious "log-rolling" to get everyone on board.
Nobody wants to pay for what is a collective problem. Sometimes I think condo's shouldn't even be legal because of this. They should all be apartments with a central management company.
The solution is really tightening fiducial regulations on condo HOA's. There could easily be a formula of like 10% of annual dues need to be put in a rainy day fund or something... Banks have started to tighten their lending around condos and ask for more up front financial info.
Re: Condo boards everywhere are unprepared for serious repairs
#8I sat on my condo board for a decade and was president for two years. My experience is that the board is not the problem - the non board sitting owners are. Our complex was comprised of 5 separate 3 story buildings. Three of those building had bad water leaking problems but when we tried to raise money for repairs - the people who weren't suffering any interior water damage wouldn't vote yes. Many buyers don't read t…
I can relate to this. My parents lived in a 22 story building that had water leaks throughout the entire building from construction defects. Until my mom literally got herself elected to be the president of the condo board nobody seemed to care that the building was broken. Many years later and a lawsuit against the developer, the building association and the owners were finally able to get compensated AND have the construction defects fixed.
There is no way you can financially prepare for the magnitudes of repairs needed in their case.
Re: Condo boards everywhere are unprepared for serious repairs
#9It's not just condo boards, it's everything in America... physical infrastructure, corporate R&D, software security bugs. It's more attention grabbing and personally profitable to do something new than maintain something old, so people kick the can down the road and cash in, making the problem someone else's (and a bigger problem). Even worse, America's soft power / cultural influence is infecting other countries with this mindset, which once used to have family owned businesses managed on a centuries-long mindset.
"A society grows great when old men plant trees whose shade they know they shall never sit in."
Re: Condo boards everywhere are unprepared for serious repairs
#10I sat on my condo board for a decade and was president for two years. My experience is that the board is not the problem - the non board sitting owners are. Our complex was comprised of 5 separate 3 story buildings. Three of those building had bad water leaking problems but when we tried to raise money for repairs - the people who weren't suffering any interior water damage wouldn't vote yes. Many buyers don't read t…
We recently bought a condo after renting in the building for three years. The board, management and staff of our building are phenomenal—an inside bit of information we knew from having lived here.
We looked at a large number of buildings in the area, and was surprised that maybe 1% of the information you need to assess board/management competence is available online. Generally we'd have to do our own DD talking to people in the buildings.
IMO it makes a huge difference, >10% of the purchase price should be on the quality of the board and management.
Seems like a startup opportunity to be Yelp for Condo Boards/HOAs. (I'm sure there are a dozen+, of course. I haven't done the DD on that!)