Foreclosures hurt condo owners

By Marcie Geffner - Bankrate

When too many condominium owners lose their units to foreclosure, condo associations feel the financial pain. That's bad news for homeowners and real estate investors who depend on these associations to take care of building maintenance, property insurance, utilities, landscaping and other amenities that are shared in common.

While most owners pay their association dues as they are obligated to do, a rising number have fallen behind for various reasons. The problem isn't insignificant: Approximately 24 million housing units are governed by some 300,800 homeowner associations in the United States, according to the Community Associations Institute, or CAI, a nonprofit organization of homeowner association managers in Alexandria, Va.

"If you've been foreclosed on and you have a lien against your home or (if you're in financial trouble due to) general economic conditions and you aren't able to pay your assessments, that creates some major problems for the association," says CAI spokesman Frank Rathbun.

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