FORECLOSER AND FEES

Article Courtesy of The St. Petersburg Times
By Mike Brassfield
Published January 11, 2009

CLEARWATER
Sitting in her small condo in one of Tampa Bay's biggest retirement communities as her hands tremble, a 75-year-old woman reads a letter threatening to put her out of her home. Like so many other Floridians, Ann Studen is facing foreclosure. But in her case, it has nothing to do with her mortgage. She's four months behind on her $280 monthly maintenance fees, and her condo board has put a lien on her $70,000 unit.

It happens more often than you might think. While no one tracks foreclosures prompted by homeowner boards and associations, there are a rising number of people in Studen's situation, according to civil court judges and condominium officials.

In a shaky economy, this is one more way that people are falling through the cracks.
"I have no place to go. Where could I go?" says Studen, her face contorting in anguish. She's out of savings, low on cash and running out of time.

Evicting her may seem cold and harsh. And while condominium experts say they sympathize, many are quick to defend the practice.

Their argument: Condominium associations have to take aggressive steps to collect unpaid fees so they can do things like mow the grass, clean the pool, service the elevators and keep the lights on in common areas. If some owners don't pay, their neighbors have to pay more to make up for it. Increased fees for all can mean more defaulters. It can spin out of control.

"We feel sorry for people like this lady, but you can look at it both ways," says Bill Raphan of the state Condominium Ombudsman's Office.

"The rest of the owners are bearing the burden.

Ann Studen, a 75-year-old resident of On Top of the World, could be evicted because she can’t afford the monthly fees. “I have no place to go,” she says. She has outlived her nest egg and gotten a part-time job. Her only comfort is her dog Mimi.

If you were paying $100 a month and 50 percent of the unit owners don't pay, you're going to pay $200 a month. Every time someone is delinquent, your piece of the pie gets bigger."

These days he's seeing condominiums, particularly in South Florida, where 50, 60, even 70 percent of the owners are defaulting on their maintenance fees or mortgages.

"It's a cascade effect, like an avalanche."