HOA Law Blog

The Wall Street Journal recently reported on the effect the sub-prime crisis is having on many community associations. While the crisis is not a problem in some areas of the country, in California it is a affecting many associations budgets, as many boards did not anticipate or address the potential for bad debt when they adopted their budgets. In an article entitled "When Dues Dry Up, the Neighbors Pay", the WSJ reports that the other owners are having to make up the deficit that results from the fact that some owners are losing their units or homes to foreclosure because they cannot afford the increased payments to their lenders. The article points out that at some associations, the boards are cutting back on services. Some associations are delaying projects such as painting or new roofs. We are also seeing some associations that are paying out money to deal with stagnant water in pools and brown lawns and dying landscaping at abandoned homes. How is the sub-prime crisis affecting your association? Let us know. And to learn more about collecting unpaid assessments from defaulting owners, see our recent blog entry: To Foreclose or Not to Foreclose.