Continuing Nightmare For Residents In Condos Flooded With Foreclosures; Some HOAs Drain Cash Reserves To Avoiding Boosting Maintenance Fees

In Palm Beach County, Florida, The Palm Beach Post reports:

• Nearly 70 percent of the owners at the Kensington of Royal Palm Beach condominiums are delinquent on their association fees. At the Paradise Cove at Palm Beach Lakes, 48 percent of owners owe back dues. And at Cypress Estates of Palm Springs, 56 percent of units are in arrears. The three communities share the same story. Investors bought heavily during the boom, but now sit on units worth half what they paid.

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• "There's anger. The owners who live here are disheartened because they work hard and care about the community," said Karen Cicciari, Kensington of Royal Palm Beach association president. "It's a nightmare." [...] Cicciari said her condo fees are about $320 a month. The association chose to drain its reserve this year to pay for services instead of raising monthly dues. Cicciari said the association feared losing more paying owners if fees went up. "We're providing cable to the whole community, but there are only a handful of us paying," Cicciari said. "It's becoming out of control."

• The real problem, [Banyan Property Management's Mark] Quinn said, is when major repairs are needed, but there's no rainy day fund. "If we had a hurricane, communities like this, with no cash cushion, I don't know how they would ever pay their insurance policy deductible, or clean up," he said.

For more, see Condo associations are turning to receiverships to collect rent on foreclosed units.