My Condo Dilemma

[JoeB131]

You are such a person who lacks imagination, but instead prefers the fairy tale that these investors are willing to over pay out of the kindness of their heart, to help people like you liquidate.

Again, I watched you idiots wreck the economy by cluttering my area with McMansions, you all thought you could flip, until the poor suckers got stuck with them when the music stopped.

Your experience living in a condo with many rentals is similar to what I have seen over the years. Stay away from buying condo with a large percent of rentals if you plan to live there. The best condo I ever lived in was an 80 unit complex with 2 rentals. The worst was a condo of town houses with 93 units and near half were rentals. There were 6 position on the Board but never more than 3 were filled because the absentee owners weren't interested in serving on the board, the renter were not allowed and the rest of the resident owners didn't want to deal with the problems. Renters simply don't have much interest in property and absentee landlords have only one interest, keeping cost down.

When I moved into this place in 2004, the vast majority were owner occupied. Then the 2008 Crash hit, and a lot of these people couldn't make their mortgage payments. Unit values dropped by half, and investors started snapping them up.

There's kind of a new wrinkle, some of the Condo Dead Enders want to sue the Condo board because they didn't hold an election last year due to Covid, they just let the Condo Board continue on. This is the Condo Board that accepted the buyout offer and put it in front of the ownership.

They are also claiming coercion because of the whole "We're just going to raise assessments" veiled threat I mentioned earlier.

Avoid all condos like the plague.
Although some are ok, the risk are greatly amplified, and it costs a tiny fraction to just hire a maintenance company for a private home, if you really do not want to deal with anything yourself.
Condos traditionally have half the appreciation rate of individually owned properties.
The only advantage of a condo is if you want an upper floor view while still owning.

Actually, I've owned both, and really prefer Condo living.

Besides not having to fuck with the snow removal, maintenance, lawn care, raking leaves, which I didn't like doing as a younger man and have no desire to do now that I am approaching my 60's.

The thing is, I never looked at my home as an "investment". I looked at it as a place to live. I would have been perfectly happy just living here until I died and letting my heirs figure out what to do with the place after I was gone.

Now that I am forced to move, I am aiming for a better place that is more suited to my needs. In short, I'm looking at what didn't work with this one and not repeating it.

 

[Flopper]

Again, I watched you idiots wreck the economy by cluttering my area with McMansions, you all thought you could flip, until the poor suckers got stuck with them when the music stopped.



When I moved into this place in 2004, the vast majority were owner occupied. Then the 2008 Crash hit, and a lot of these people couldn't make their mortgage payments. Unit values dropped by half, and investors started snapping them up.

There's kind of a new wrinkle, some of the Condo Dead Enders want to sue the Condo board because they didn't hold an election last year due to Covid, they just let the Condo Board continue on. This is the Condo Board that accepted the buyout offer and put it in front of the ownership.

They are also claiming coercion because of the whole "We're just going to raise assessments" veiled threat I mentioned earlier.




Actually, I've owned both, and really prefer Condo living.

Besides not having to fuck with the snow removal, maintenance, lawn care, raking leaves, which I didn't like doing as a younger man and have no desire to do now that I am approaching my 60's.

The thing is, I never looked at my home as an "investment". I looked at it as a place to live. I would have been perfectly happy just living here until I died and letting my heirs figure out what to do with the place after I was gone.

Now that I am forced to move, I am aiming for a better place that is more suited to my needs. In short, I'm looking at what didn't work with this one and not repeating it.

Owner's suing the association rarely works out because they are in effect suing themselves.

I would not buy a new condo today because most developments have serious problems that are rarely solved while the developer is in control. Once a certain percentage of units are sold, the developer turns management over to a Board that rarely has much experience. The first thing that happens is monthly owner maintenance fees go up because the developer has been subsidizing the costs in order to sell units. Next, defects in common areas and units start appearing and continue well after the warranty. And if the problems are bad enough the developer may declare bankruptcy and leave the owners holding the bag. Size is also important. A small condo of 10 or 15 units might be appealing but remember there will be only 10 or 15 owners to pay the bills. Personally, I like condos of at least 40 units and no more than 100. However, some people like very large condos because they tend to have more amenities.

IMHO, the best time to buy a condo is when it is about 10 years old. By then construction problems have likely been worked out. You will be able to determent how well the place is being managed by looking at the reserves, assessments, board minutes maintenance fees, rentals, and board member turnover. Talk to board members and owners to determine what the problems are and exactly what kind of place you're moving into. Don't be afraid to knock on some doors. All condos are different. Some boards neglect putting any money into reserves and letting whoever owns the units foot the bills when it's time to replace the roof, fix the foundation, or other major repairs. Condos are all different so take the time to investigate. You won't regret it.

 

[JoeB131]

Owner's suing the association rarely works out because they are in effect suing themselves.

I would not buy a new condo today because most developments have serious problems that are rarely solved while the developer is in control. Once a certain percentage of units are sold, the developer turns management over to a Board that rarely has much experience. The first thing that happens is monthly owner maintenance fees go up because the developer has been subsidizing the costs in order to sell units. Next, defects in common areas and units start appearing and continue well after the warranty. And if the problems are bad enough the developer may declare bankruptcy and leave the owners holding the bag. Size is also important. A small condo of 10 or 15 units might be appealing but remember there will be only 10 or 15 owners to pay the bills. Personally, I like condos of at least 40 units and no more than 100. However, some people like very large condos because they tend to have more amenities.

The place I am looking at was built back in the 70's. So I'm good there.

 

[Flopper]

The place I am looking at was built back in the 70's. So I'm good there.

For older condo, it's amazing how much you can learn by just asking. New condos have no history. Salesmen, the Board which is mostly the developer and new owners will all tell you the same thing, "It's great place to live".

 

[Adrenochrome Junkie]

I don’t know why JoeB131 doesnt just buy a tent and move to a sidewalk downtown in the closest city.

He’d fit in with everybody else and find a lot of like minded people

 

[JoeB131]

For older condo, it's amazing how much you can learn by just asking. New condos have no history. Salesmen, the Board which is mostly the developer and new owners will all tell you the same thing, "It's great place to live".

I actually talked to some current and past residents, read on line reviews...

To update you on where things have progressed.

I am about to get approved for my loan. Hoping to close on the 29th.

The Dead Enders are suing the Condo Board, on the theory that because the Condo Board did not hold largely perfunctory elections (The Condo Board hasn't changed in years) in 2020 due to Covid, they were invalid and couldn't make a deal with the investor.

The problem is, 77% of the ownership voted for this deal (The min in IL is 75%.) I don't think they have a leg to stand on, but they might gum up the works for a few months.

 

[Flopper]

I actually talked to some current and past residents, read on line reviews...

To update you on where things have progressed.

I am about to get approved for my loan. Hoping to close on the 29th.

The Dead Enders are suing the Condo Board, on the theory that because the Condo Board did not hold largely perfunctory elections (The Condo Board hasn't changed in years) in 2020 due to Covid, they were invalid and couldn't make a deal with the investor.

The problem is, 77% of the ownership voted for this deal (The min in IL is 75%.) I don't think they have a leg to stand on, but they might gum up the works for a few months.

Suing the HOA Is usually a bad idea of for several reasons first being you end up suing yourself. The cost and the settlement is shared by all members. Unless the HOA is sitting on a lot of money there will be an assessment to pay for settlement. When owners realize this the suit goes away.

Unless you can prove the board is stealing money from the association or committing some other crime the suit will fail because board members are rarely held responsible for stupid mistakes. Since condo laws requires the HOA to provide liability insurance for board members the Board is protected.

 

[JoeB131]

Suing the HOA Is usually a bad idea of for several reasons first being you end up suing yourself. The cost and the settlement is shared by all members. Unless the HOA is sitting on a lot of money there will be an assessment to pay for settlement. When owners realize this the suit goes away.

Unless you can prove the board is stealing money from the association or committing some other crime the suit will fail because board members are rarely held responsible for stupid mistakes. Since condo laws requires the HOA to provide liability insurance for board members the Board is protected.

Good points all, but these people are really, really stupid.

Most of them are Polish immigrants and don't know any better.

Unfortunately, they found a lawyer who was asleep the day they taught ethics and is happy to separate stupid people from their money.

 

[Adrenochrome Junkie]

Good points all, but these people are really, really stupid.

Most of them are Polish immigrants and don't know any better.

Unfortunately, they found a lawyer who was asleep the day they taught ethics and is happy to separate stupid people from their money.

Racist comment.

Looks like karma is coming around to ‘circle back’ at ya

 

[JoeB131]

Racist comment.

Looks like karma is coming around to ‘circle back’ at ya

Not really. They are going to lose and throw away their money... I've already put down my offer on a new Condo and will probably close next week or the week after.

So at worst, they might delay the sale by a month or two... But I doubt they'll do that...

 

[g5000]

So throwing this out there because some of you I actually respect your opinions.

I've lived in the same Condo Complex since 2004, but a real estate company is looking to buy us all out and convert to Rental units. This is mostly being instigated by the Condo Manager, who wants to retire and is probably sick of dealing with this nonsense.

The good part is that they are going to buy all the units "as is" for about 20% above current market pricing. This probably works out for me because I really do need to do some remodeling, but I'm not going to bother if the place is being sold to a company that's going to tear everything out to standardize them.

So I'll probably walk away with about $60,000.00. More than enough to put down a payment on a new Condo and start over again.

The bad part- I really don't want to move again or to rent again.

The sale will only go through if 75% of the owners vote to go through with it. At current, 48% of the units are owned by people who don't live here, 52% are owned by people who do. So this is a case where my vote will actually make a difference.

The other factor is that the town is about to rezone a commercial property which will probably have a serious impact on the community. Essentially, the county is trying to force this down the town's throat.

So should I take the money and run or vote against the change?

Condos depreciate in value. Go get a house.

 

[JoeB131]

Condos depreciate in value. Go get a house.

Again, not interested in a house because at my age, I don't want to deal with maintenance, shoveling snow, raking leaves, mowing grass, etc.

Nor am I looking at this place as an "investment". I'm looking at something that I can live out the remaining years of my life at. (I will be 60 next year, plan to retire at 65, and C'Thulhu Willing, will reach the average age of 78) . I lived at my current location for 18 years and the one previous to that for 14.

 

[Flopper]

Good points all, but these people are really, really stupid.

Most of them are Polish immigrants and don't know any better.

Unfortunately, they found a lawyer who was asleep the day they taught ethics and is happy to separate stupid people from their money.

I assume, that these owners do not represent the HOA, that is they have not voted the Board out and taken control. If they are just a group suing the HOA or Board, they are stupid. If they win, they will be assessed just as all owners to pay damages, lawyer fees, and court cost. If they lose they will be paying the full cost of the suit plus any damages in a counter suit. This is why suing the HOA rarely is successful. Suing the Board is a slightly better option, although courts expect little from board members accept to obey the law.

Have you sold your unit yet. It's good idea to sell before the suit is started as sellers must disclosure legal action against the HOA.

 

[JoeB131]

I assume, that these owners do not represent the HOA, that is they have not voted the Board out and taken control. If they are just a group suing the HOA or Board, they are stupid. If they win, they will be assessed just as all owners to pay damages, lawyer fees, and court cost. If they lose they will be paying the full cost of the suit plus any damages in a counter suit. This is why suing the HOA rarely is successful. Suing the Board is a slightly better option, although courts expect little from board members accept to obey the law.

Have you sold your unit yet. It's good idea to sell before the suit is started as sellers must disclosure legal action against the HOA.

Unfortunately, they have not set a close date yet, and they have to close all the units at once.

That said, my plan to move was always separate from the final sale of my current unit. I always knew there would be one month where I would be stuck paying two mortgages before getting my payout.

While I haven't seen the lawsuit, I have talked to the Dead-Enders for a while, until they started asking for money to fight the lawsuit. Their suit is against the board, but as I said, it makes no sense, since the majority of the owners voted for this deal, not the board.

THeir theory is the board was invalid because elections weren't held, so they never should have entered into negotiations with the investors to start with. Also, board members themselves are insured against lawsuits.

 

[Flopper]

Unfortunately, they have not set a close date yet, and they have to close all the units at once.

That said, my plan to move was always separate from the final sale of my current unit. I always knew there would be one month where I would be stuck paying two mortgages before getting my payout.

While I haven't seen the lawsuit, I have talked to the Dead-Enders for a while, until they started asking for money to fight the lawsuit. Their suit is against the board, but as I said, it makes no sense, since the majority of the owners voted for this deal, not the board.

THeir theory is the board was invalid because elections weren't held, so they never should have entered into negotiations with the investors to start with. Also, board members themselves are insured against lawsuits.

That law sue against the Board will go nowhere. If the lawyer will not accept a contingency fee which means the client pays all legal costs then the case is either too small or has little merit. The history of owners successfully suing the board is not good. The reason is that courts consider Board members laymen with no experience or training in managing a condo. In short, if the plaintiff can not prove that the board members purposely acted in bad faith or knowing acted in violation of the law, the case will fail. .Violating the covenant of organization such as not notifying owners of meetings, failing to provide information to owners, and even violating agreements will not necessary win the case. If the covenants of the HOA required that board members have training and experience in condo law and condo management, then the courts would look at the suit quite differently.

 

[JoeB131]

Our Condo board is pretty informal, and no on even cared it was out there doing stuff until now. They would hold annual meetings at the local community center and no one would show up. (I showed up the first six years I lived here and then even I stopped bothering.)

But because they didn't hold an election last year due to Covid and let the previous board continue (the same board that has served for years because no one really shows up for these elections when we had them), the legal theory of the Dead-Enders is that the board never should have made a deal with the investors to start with.

I think this theory fails because at the end of the process, 77% of owners voted for this deal. Everyone got their say on it.

The Lawyer insisted on getting $30K up front from the Dead Enders, then he went down a bit and said he'd take $15K now and 15K later because it was the last day they could sue on the 13th.

 

[Flopper]

Our Condo board is pretty informal, and no on even cared it was out there doing stuff until now. They would hold annual meetings at the local community center and no one would show up. (I showed up the first six years I lived here and then even I stopped bothering.)

But because they didn't hold an election last year due to Covid and let the previous board continue (the same board that has served for years because no one really shows up for these elections when we had them), the legal theory of the Dead-Enders is that the board never should have made a deal with the investors to start with.

I think this theory fails because at the end of the process, 77% of owners voted for this deal. Everyone got their say on it.

The Lawyer insisted on getting $30K up front from the Dead Enders, then he went down a bit and said he'd take $15K now and 15K later because it was the last day they could sue on the 13th.

I agree, these people don't seem to have a case. If they really had a good case, a lawyer would have taken the case on a contingency fee taking 40% of any settlement. As far as not having an owner meeting as prescribed in the covenants to elect board members and approve the upcoming budget, the Board would remain until a meeting could be held and the powers of board to sign contracts on behave of the HOA would remain in effect. However, your covenants and HOA law could be different.

 

[JoeB131]

I have to wonder why they're salivating so hard, despite the earlier explanation that they think they can make more renting than owning.

Real Estate folks are numbers people that rarely pay more than something's worth, so I have to wonder what the new zoning is, and if it, or something else will be pushing prices up in this area over the next 5-10 years...

Actually, rental units are at a premium out here... which is why there is such demand for them. They are throwing up a whole new rental complex less than a mile from where I am at.

Anyway, closing on my new place tomorrow...

 

[JoeB131]

I agree, these people don't seem to have a case. If they really had a good case, a lawyer would have taken the case on a contingency fee taking 40% of any settlement. As far as not having an owner meeting as prescribed in the covenants to elect board members and approve the upcoming budget, the Board would remain until a meeting could be held and the powers of board to sign contracts on behave of the HOA would remain in effect. However, your covenants and HOA law could be different.

Well, to update.

I close tomorrow.
Thursday, I have a furniture company delivering new furniture.
I move in the rest of the possessions I am keeping on saturday, the 13th, so I might go dark for a little while.

 

[strollingbones]

i hope it all goes well for you