You come down to sunny Florida thinking you’re going to steal a condo – with our rock bottom pricing right now, and be able to enjoy a life in paradise, but be careful. There’s one thing that if you overlook can cause you a life of ruin. That is Condo / HOA (Home Owners Association) monthly, quarterly, or yearly fees.
The first question is what are these fees and why do you have to pay them? In most cases these fees are mandatory and all homeowners must pay them. As a matter of fact, if you don’t pay them on time, the HOA can put a lien on your property and eventually take possession of your home. Each community has different fees that are paid at different times – ask your Realtor for a breakdown of the required fees.
In most gated communities in the Naples and Bonita areas all the homes are clean, well maintained, the landscaping is cared for, lawns are watered, there may be community swimming pools, community tennis courts, exercise facilities, a clubhouse, a guard at the gated entrance, etc… The list can go on and on. Purchasing a condo, your insurance on the building is also included in these fees. That in essence is what you are paying for in these communities. They (as in you and all the owners) want everything to remain well kept (this helps with a nice quality of life and in theory, is supposed to keep your property values up).
These fees can increase or decrease for a lot of reasons. Damage from storms, increases in insurance costs on the buildings, and other homeowners not paying their fees can all cause the HOA fees to jump up! I don’t have time to talk about all these things, but the one I’d like to address is homeowners not paying their fees.
A lot of people cannot afford these payments anymore. When people stop paying fees, it creates a downward cycle – all of the other homeowners must then pay extra to cover for the other people’s loss. This will cause an increase in everyone’s costs, which in turn can put more people out of budget and then they won’t be able to pay. If they stop paying, fees will go up more and it causes a big mess and is hard to stop. That in turn causes more foreclosures and then causes property values to go down. And on and on…
There is good news amongst that crazy downward slide. That is when a property gets foreclosed on, if the bank takes possession of it, they have to pay up to 6 months of the delinquent fees that have accumulated. If an individual buys it at the foreclosure sale, they have to pay ALL the back fees which could be year’s worth. So, it’s taking some time, but at least these communities are seeing some money coming back to them.
We’ll get there eventually, all things take time. Please be careful if you are buying, ask your Realtor how many people are delinquent on their fees in the community, what the current fees are, what the budget is, be educated before you buy! Good luck!