Prioritizing Projects Knowing What to Do & When to Do It

 When money is tight, consumers typically put away their credit cards and take  stock—cutting out non-essentials, such as dining out and luxurious vacations—to make ends meet. Strapped homeowners will limit their funds to emergency  repairs only, such as patching up a leaky pipe, and put off anything else that  needs to be done until later. Those who live in an HOA might even take such  drastic measures as not paying their monthly dues until things improve.  

 Unfortunately, in this economy, many homeowners are making the decision to do  just that and it’s left many associations in a serious financial crunch. They simply don’t have enough money to complete some basic maintenance and improvement projects.  

 Tough Times, Tough Choices

 According to a national survey conducted by Community Associations Institute  (CAI), more than half of the nation’s estimated 310,000 community associations continue to struggle with financial  issues associated with the mortgage foreclosure crisis and related economic  downturn. Almost a half million properties received a foreclosure notice last  year, according to real estate data firm RealtyTrac, Inc. and 45 percent of  community managers say their client associations face "serious” problems as a result of the housing and economic downturn, while 9 percent  describe the impact as "severe." The remainder say these issues are a nuisance  or nonexistent.  

 For example, a recent article in the Daytona Beach News-Journal profiled the  luxury Palmas de Mallorca condominium in Daytona Beach Shores, which was nearly  shut down in 2008 and evacuated when the homeowner's association did not have  $3,000 to fix a water pump that feeds the fire suppression sprinklers. What in  the world would bring a high-end condo community to such a predicament? The  answer was simple, but dire: half of the building's 12 units were empty and the  remaining owners were not paying their assessments. Fortunately the problem was  fixed—but it’s just one example of many more associations facing the same battle today.  

 “In this particular economic time in Florida, community associations are hampered  by foreclosures and the board has to make hard choices about what they are  going to pay for,” says Dennis J. Eisinger, Esq., an attorney and founding partner with the  Hollywood law firm of Eisinger, Brown, Lewis, Frankel & Chaiet, P.A. “The last time this happened it took 14 years to come out of it.”  


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