Sunday, November 07, 2010

Own a condo in Burbank or the San Fernando Valley? You may wind up paying your neighbor's bills

Here's a story from today's L.A. Times (yes, again) regarding condo associations and how finances are handled, especially when several home owners association members are in foreclosure.  Yes, the remaining members have to take up the financial slack.

What the article doesn't say is that it can be very difficult to sell a condo, even if you're not in arrears in your dues, if the HOA finances aren't healthy.  That's because banks don't want to make loans on these projects -- they believe, rightfully so, that the value may decline due to lack of reserves, inability to pay for maintenance, inability to pay insurance, etc.  Just this year I've experienced this for condo projects in the north San Fernando Valley, Burbank, Toluca Lake or Studio City.  If you are interested in purchasing a townhouse or condo in any of these areas, please contact me and we'll find out about the Association's financial health before you make an offer.

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