Condo Association Group

[JohnMtl]

I look at it like this. Would you rather pay for your car repairs in advance or wait till they happen? Reserves are the same thing as paying your repairs in advance. The owners pay the reserves....its not free, there is NO savings at all. I myself much rather keep my own money and have it invested and deal with the the special assessments as they happen. I also equate it to paying taxes in advance...I rather keep my money and owe the government.....just my thoughts on this situation.

My other thought is Robin is spot on. Enjoy owning in Aruba guys!

I don’t pay for my car repairs in advance either. However, the big difference is that when my car breaks down I don’t have to collect money from anyone else in order to get it back on the road.

I’ve seen too many situations where owners can’t afford a special assessment and not only do they stiff the association for the assessment but since they know there will be a lien put on their unit, they stop paying their condo fees as well. So, the rest of the owners get stuck paying someone else’s share of the assessment, several months of condo fees and the association ends up incurring legal costs.

That’s where your savings are.

Also, a condo with reserves makes it more attractive to buyers as well. Especially if it’s an older building.
At our Florida condo we lost out on some great potential owners because their bank refused to give them a mortgage on an older building without adequate reserves.

[robin]

I don’t pay for my car repairs in advance either. However, the big difference is that when my car breaks down I don’t have to collect money from anyone else in order to get it back on the road.

I’ve seen too many situations where owners can’t afford a special assessment and not only do they stiff the association for the assessment but since they know there will be a lien put on their unit, they stop paying their condo fees as well. So, the rest of the owners get stuck paying someone else’s share of the assessment, several months of condo fees and the association ends up incurring legal costs.

That’s where your savings are.

Also, a condo with reserves makes it more attractive to buyers as well. Especially if it’s an older building.
At our Florida condo we lost out on some great potential owners because their bank refused to give them a mortgage on an older building without adequate reserves.

At our place in NJ everyone feels differently about this. We have owners who want low monthly fees and don't mind an assessment(it is usually broken down over time and added to their monthly fee). Others would rather pay more every month than get hit with the special assessment. When we had the erosion issue, we did have enough in our reserve to pay for it, but added in a special assessment, payable with their monthly fees over a 12 month period to build our reserve back to where it was. Right now our reserve is better than it has ever been, but IMO it is not enough. Most of our owners are really good about paying monthly and were good about the special assessment. We have those few, who get behind a few months, a letter goes out threatening legal action and they pay what they owe plus the late fee. But there is that one owner that I have no words for-the short of it is she has had many legal actions(from liens to judgements to bank levies, etc.) taken against her over the 12 years she has owned it since her mother's passing. I'll be done with all of that in 29 hours hopefully.

Oceania in Aruba does it right. You get behind more than a month, they turn off the water to your unit. They don't care if someone is in there or not. I wish we could do that here in NJ.

[JohnMtl]

Oceania in Aruba does it right. You get behind more than a month, they turn off the water to your unit. They don't care if someone is in there or not. I wish we could do that here in NJ.

Thats the way to do it!
The longer you wait the greater the chance of never collecting and having to foreclose.
In Florida I had installed an electronic access system for the main doors as well as for the shopping carts, gym and pool areas.
If fees were over 60 days late they would lose access to the carts, gym and pool area. But what really made people pay up was when we’d cut the cable TV.