Any HOA - condo or not, can foreclose on you as well as sick the collectors on you if you don't pay condo fees.

http://www.condoassociation.com/blog/tabid/19257/bid/4803/What-if-condo-owner-stops-paying-condo-fees.aspx

Thanks for the response.

What I meant is: can the whole building foreclose. I intent to pay my condo fees. But from what I know more and more people are not paying their. What can happens if the HOA totally run out of money?

Thanks, Lyly

Be careful.

Here's a key question:

The answer can vary by State...

The HOA has a lien for the delinquent HOA fees.

Upon foreclosure, is the HOA lien "expunged"? 

Or does the foreclosing Bank become responsible for the past due payments now that they are on the title?

Or, the combination, the past due amount of the prior owner is wiped out, and the bank, now on title, pays going forward until re-sale to an occupant?

I think it would be worthwhile to meet with some of the HOA chieftans to review the current budget and an assessment of the viability of the community.  It may be a great opportunity if things get turned around, but do your homework in advance.

Good luck!

While renting you are assuming no risk of declining prices or the condo reserves not being sufficient to cover the needed maintainence.

Buying you're assuming joint liability for all the financial needs of the complex, which apparently has a lot of unhappy underwater owners and foreclosures.

You need to look at the reserve study to see how well it looks as if the condo association can weather this downturn.

In my opinion, current parity between renting and owning is no where near cheap enough to take on the additional financial liability. Given that other potential buyers will also be looking for a discount compared to renting and will have a hard time obtaining financing, it sounds as if you're living in a building that is going to implode.

How do those things end? Deterioration, followed eventually by being bought out by a developer for way below market rate (for similar condos in good financial health).

I am (sort of) in the same boat as you.  I'd like to buy a condo but I fear that others will not keep up their part of it (paying fees, maintaining the building, etc.)  I rent a condo now and enjoy not having to cut grass and getting out of the car with grocery bags in the rain!  My building has had a few foreclosures but the HOA seems to have a good handle on things so far.  (I check the annual budget and such even though I rent).

Ditto what Jimi said.   You really have to do your homework on this one.  You do have something to lose...equity, time, energy, money, and most importantly, your sanity.  The biggest loss will be having to live in a buiding that is falling apart.  It will take time for it to hit bottom so a devleper can sweep in and turn it around.  Are you willing to be "holding the bag" (ie. one of the few actually paying the ever increasing monthly fees) until other decide to join you? 

If you love the place, the location, it may not be a bad idea.  Best of luck!

Hello everyone,

thanks a lot for all the replies. It was very helpful getting the inside from everyone...

And funnyweise I just got an email from my realtor telling that I will have to come up with about 10K in fees, downpayment etc. Since the price is very low, closing help is not that much, so I have to put a lot of money into that..That means I have a lot to lose if it goes bad (Money, energy, time etc). The worst part is that the building could be impoded...I didnt know it was possible but I wont be suppprised if this happens. I am thinking I will pass on it because at the end of the day I dont think it is worth it!!

Thanks for your contribution!!

Liane