Reply to I need to raise Common Charges Again

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[quote=Anonymous][quote=Anonymous]This is going to be a disaster, OP. People are going to stop paying. When enough stop paying, it will become impossible for buyers to get financing, sending the property into a death spiral. You need to sell immediately.[/quote]

Back in late 2007 before I owned the building was in terrible shape with zero reserves and need five new roofs and had some people in arrears (two on board). The shady condo board at time decided to take take a ten year loan from NCB bank instead of raising common charges or do an assessment.

They got that loan in before all loans died in 2008 in financial crisis. However, they did a $150 a month surchage for a decade per unit to pay off loan which made them unpopular.

Well here comes Sandy. Building got hit hard, all ten lower levels flood with several feet of water, all 30 units electrical boxes flooded, all 30 units HVAC and Water heaters distroyed. Rather than deal with it the whole board quit. Leaving building heavily damaged with zero board members.

Two women not on board did their best to get building open again. Lots of fights. I then bought after building opened. Appointed treasurer and find out a 1/3 of building stopped paying common charges and we were way underpaid in flood insurance. I hired a tough lawyer and we filed liens and lawsuits and foreclosures against all ten units not paying. One by one they settled up, did short sale or bank expidited foreclosure process. Banks dont like a condo beating them to the courthouse steps. So they sped up process.

Flash forward 100 percent of people are current in common charges. While our financials was a mess from 2013 to around 2017 we had nearly all cash buyers. Since then most loans are via local banks requiring 25 percent down. The people pre-Sandy 2012 not mostly have no mortgage or small mortgages.

So everyone has a ton of equity. This is not like Sandy where we had bubble buyers of Spring 2003 to Spring 2008 who did 5-10 percent down who after Sandy were underwater.

But I had the whole 2/3rds of building cheering for me when I went after the 1/3 dead beats. This time I would be going after good hard working folks though no fault of my own.

We found  two more insurance agencies to bid this years insurance renwal. We also decided to pay $500 to an independent company to negotite on our behalf to get best rates. All the policies renew by Nov 1st. I am trying to get it as low as possible.

People are irrational. They want to live near the beach. But since Surfside and FEMA raising flood insruance on grandfathered policies the low common charges in a flood zone has become a thing of a past.

My prediction to future buyers. I the next Sandy building departments and FEMA will not allow basement units like we have to be rebuilt. I heard the building dept was 50/50 granting the CO to rebuild in Sandy. That would leave lower level. owners with expensive storage units. Meaning there would not have a CO to live in. They would just be unfinshed space. Good luck selling that. Sure might be nice to park cars, store your surfboards, store your beach chairs, have a BQ, maybe outdoor shower. But with no CO it means no kitchen or bathroom. Just a unfinished basement. And people paid $400k to $450K those units the last 1-4 years. I dont have an answer for that. In sandy I did approach NY Rising and FEMA about buy outs but they dont buy out part of a building and the program was geared towards buying out SFHs and raising buildings. Not buying specific condo units. So no dice.     [/quote]

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