Alabama Condo Associations: Standing Strong Against Foreclosures

Six months ago, the number of condominium foreclosures in Alabama went into a plateau. For local experts, this is good news for the market considering that condo foreclosures in other states have grown and impacted the local housing market in a negative manner.

Across the nation, there are approximately 24 million units governed by over 300,800 homeowner associations. Those greatly affected by the foreclosure crisis are associations, which have been formed just recently and have yet to make the necessary preparations in terms of reserves. In the same manner, the older associations will experience problems if their reserves have not been properly maintained.

Aside from this, the local condo associations believed that those condo properties that were foreclosed were already in trouble to begin, even before the local market slowed down. Also, owners who had several condo units in various complexes were the ones who experienced mortgage problems.

Since condo associations operate using the money collected from the association dues, most associations have become strict when it comes to collection. In fact, they make sure that the owners receive notices of liens if they missed payments. If not, the condo associations will be hit terribly. Some of them have reduced collection time from 90 days to 60 days in order to manage the deficiencies better.

The strict collection guidelines have not affected relationship among neighbors as most of them know that these rules are being implemented to look out for the association’s best interest.

Delinquencies are also handled by filing lawsuits. According to local laws, lenders of the foreclosed property are obligated to pay or settle up to 6 months worth of association dues. Unfortunately, the laws do not cover special assessments.

In some parts of the state, monthly association dues have gone down significantly in order to attract potential buyers. But it would also be wise to check the association’s reserves in order to gauge its financial status.

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