Tuesday, October 21, 2008

Budgets for HOA's

In California we are heavily regulated with regard to all things ...well many things HOA. While the majority of HOA's are 12-31 year ends; we are in the midst of getting budgets ready for approvals and out to their owners. Every single one of my HOA's is increasing their dues (Monthly Assessments) this year. Caught with more foreclosures than anticipated last year; budgets are cash strapped this year. Some are desperate desperate and Board's are angry.



Slowly we are seeing units being sold and some... maybe 40-50% of the lenders quietly paying the back i.e. past due assessments. I don't know if they are doing this because they knew it was a faulty loan and they are covering themselves from possible problems with the Feds. or are they rolling the delinquent assessments into the sales price (Great idea if they are) but I speculate it's not because they are benevolent.



Last time this happened there were two waves... the 1st group of owners went under... about a year later alot of people who bought those units went under. We are seeing many investors this time. I wonder if the relaxation of credit that I heard about on the news this week will jumpstart 1st time owners? I would like to see 1st time owners pick up some of these great deals. Having communities full of non-owner occupied units is not always the best thing for an Association.

I have a budget meeting tonight with a client who is FULLY funded in their reserves... have 20% of their owners in foreclosure and last year told me to double their bad debt line item. Smart Board :)

Next ..... maybe lol options for Board and their foreclosures. Whoo hoo I found spell check!

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