Will Buying a Tulsa, OK Area Condo Lead to Higher Bills?

For many home buyers, considering a condominium or townhouse seems like a smart idea. They can avoid doing exterior maintenance on the property such as lawn care and painting, but also have the benefits of home ownership. With the increase in foreclosures in the last couple of years, however, owners can find themselves being required to pay extra dues and expenses caused by owners who have had their properties foreclosed. An article, recently printed in the Tulsa World, Shared housing can lead to shared bills, discusses some keys to avoiding extra expenses when purchasing a condo or other type of shared housing.

Shared housing can lead to shared bills

For those who have a lot of cash or can get credit, this could be an ideal time to buy a house.

But beware if you are looking to buy a condominium, co-op, town house or other property that's part of a homeownership group - you could end up responsible for some of your neighbors' bills.

That's because people in shared ownership communities chip in to pay the cost of maintaining the buildings and amenities such as swimming pools. Also, the funds, usually paid in monthly installments, are often used to pay for landscaping, as well as to insure the structures.

But when individual owners in a group walk away from their homes or lose them to foreclosures, the bills end up getting split by the remaining homeowners.

Sometimes associations let bills pile up, creating potentially devastating surprises for owners.

"There's really a crisis within a crisis in the shared ownership community," said Gary Poliakoff, co-author of "New Neighborhoods: The Consumer's Guide to Condominium, Co-op and HOA Living."

The Community Associations Institute (CAI) trade group recently reported that more than half of the nation's 310,000 community associations are struggling with "serious" or "severe" financial woes.

Some 59 percent of association managers reported that more than 3 percent of homes in their community groups were vacant, the study said. Some 65 percent of associations reported that more than 5 percent of their homeowners were delinquent on their monthly assessments.

If an association determines that it needs to levy a special assessment on homeowners, there's no legal limit on how high that assessment can be.

And homeowners can't just decide not to pay. Associations can get legal judgments to allow them to take a portion of homeowners' wages or put liens on their properties.

To help avoid problems, check out the association thoroughly before you buy.

Dig deep into financial records. You should get the association's financial statement and find out what expenses the complex is paying, and what percentage of its overall obligations is handled by the dues.

Associations should have a balanced budget that covers both current and anticipated costs, he said.

Make sure the association has adequate insurance coverage. Associations generally hold the policy on structures.

Check into an association's reserves. Some states require that the associations maintain reserves for any expense that's likely to exceed threshold amounts, such as $10,000. In those states the association must have a reserve study showing what the anticipated costs are, when they're expected to be needed and how much money is set aside to handle them.

Look over the grounds. Some 35 percent of associations have reduced landscaping services and 12 percent are asking homeowners to do some work themselves, the CAI study said.

Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=364&articleid=20101114_46_E3_Fortho308694

To buy or sell your Tulsa, OK Area Condo, contact Kelly Howard, McGraw Realtors at 918-230-6341 or www.kellyhowardhomes.com.