Florida Condo And Homeowner Associations Filing Chapter 11 As A Last Resort
Last year, we began to see that condo associations in Florida were facing trouble. With many condo owners not paying their fees or facing foreclosure it was inevitable that the condo and homeowner associations would only be able to go on so long. The Miami Herald is reporting that with those fees remaining unpaid some South Florida condo associations are seeing bankruptcy as a way out. So far at least seven Florida condo associations have filed for bankruptcy and there could be many more to follow.
The lure for the associations is that if they are in bankruptcy the utilities they owe money to can't turn off basic services like water and power. The downside may be that it is both costly and only a stopgap measure. The condo associations still need to figure out how they are going to get their bills paid in the long run. If owners continue not to pay their dues the associations are basically hamstrung because, unlike businesses in bankruptcy, condo associations don't have assets to sell off. Potential buyers may also be concerned about investing under the shadow of a Chapter 11 filing. The bottom line is that associations basically are doing whatever they can to limp along until the real estate market picks up and happy homeowners are paying their bills once more. The only question is how long they can hold on.