The following story is true. The names have been changed to protect the obscenely guilty. If you find a parallel to some political figure or party, that's because a condo association is a government in miniature - with all the baggage that goes with it.
Once upon a time, there was an apartment complex. It was a nice apartment complex, but the owners were getting older and wanted to sell out. So they sold to a developer who decided to sell off bits of the complex as "condos" as part of a condominium project. The idea was, that each apartment dweller would own their own condo, and thus save money by not paying a landlord - and share in the increased equity of the property.
Of course, to pay for maintenance and upkeep, they would have to assign a "condo fee" - a form of taxation, basically - on each condo owner, based on the size of their condo unit. This fee paid for lawn mowing and cleaning and basic repairs, with a surplus accumulating to cover long-term repairs, such as roofing, windows, piping, and other infrastructure.
It went well at first. The units sold quickly at reasonable prices and the condo fee was low - kept low by the developer who wanted to make the units more attractive to buyers. Once the developer sold out, the residents elected their own condo board and then the real fun began.
Some members ran for the board based on "social issues" - whether a resident could put a door mat in front of their outside door, or whether an owner could put Halloween decorations in their window, or what breeds of dogs could be kept in the units, or whether owners could fly an American flag from their balcony or whatever. For many resident owners, these seemed like the burning issues of the day.
Some board members, however, took the job a little more seriously and realized the developer didn't leave them with much money in the reserve fund. There was no money to pay for "rainy day" repairs or even expected repairs - such as new roofs which would be needed within a decade or so. They argued the board should increase the condo fee to cover these expenses, but as you might imagine, the condo owners shouted this down. "Lower my taxes condo fee!" they said. So the board did - creating even more of a deficit for the association to dig itself out of.
One of the board members had a swell idea. They were paying a "management company" to manage the property and that cost a lot of money. They could save money by switching to a new management company, one conveniently owned by and founded by, the said same board member (and condo President), explicitly for this purpose. Some argued this was a conflict of interest - and it was, a blatant one.
A year or two later, the vaunted "savings" failed to materialize and the board had to vote for an increase in the condo fee. The board member who owned the management company offered one excuse after another as to why costs suddenly skyrocketed. But by then, he had stuffed the board with cronies of his, who all voted for the increases, over the objections of the condo owners.
And yes, bizarre as this may seem, this actually happened.
But how? Well, most condo owners were busy with their jobs and careers. Condo meetings were long and boring, except for the regular occurrences of shouting matches over "social issues" such as door mats. One condo owner put six doormats stacked atop one another, in front of his door to protest. That'll show them! Most condo owners wanted nothing to do with the board. "Politics, ugh!" they said, as they sighed and paid their condo fee.
The association still had a reserve fund, of course, but it wasn't enough to cover anticipated expenses in the future. One board member came up with a clever idea. Why not tap into the reserve fund to cover standard operating expenses? That way, they could lower the condo fee while still paying the Board President's "management company." Lower condo fees meant higher resale prices on the units, as they were more attractive and affordable to buyers. The fellow who proposed this idea owned no fewer than 15 units, which he put on the market the day the condo fee was lowered.
Sales boomed and prices skyrocketed. The overall real estate market was in a bubble at the time, but cutting the condo fee meant that buyers could afford to pay more per month in mortgage costs, based on their fixed monthly income. Prices nearly doubled overnight and within two years, doubled again.
A developer approached the board with a generous offer to buy the entire development and tear it down and rebuild as medium-rise condos. The board turned the offer down, summarily. The President of the association - whose company was managing the property - passed a resolution that no offer would be considered by the board unless it was twice the offer made by the developer. This essentially shut down any further offers.
Of course, the reserve fund was depleted within two years and the condo fees had to be raised again - by a new, and rapidly unpopular board. The new board, faced with hard choices, raised the condo fee, put off needed maintenance on basic infrastructure, and fired the "management company" owned by the now-former President of the association. The ex-President of the association went on social media to complain that the new board was corrupt and inept and that things were so much better when he was running things and his management company (not defunct, as it had only one client) was in charge.
The board tried to refill the reserve fund, but without raising fees dramatically, it was like filling a swimming pool with an eyedropper. It took only a few years to deplete the fund, it would take a decade or more to refill it. So the board did what it could do, crossed their fingers, and kicked the can down the road a bit further.
Then tragedy struck. Aging concrete and exposed rebar started to crumble, causing the foundation on one building to settle and a wall to crack and partially collapse. The buildings were beyond their anticipated design life at this point. Emergency meetings were held. Residents of the affected buildings had to be relocated to hotel rooms. Engineering studies were performed and the ugly truth came out - the entire complex was built on reclaimed land and was settling slowly. Expensive "reparging" of the foundations would be necessary to keep the place from collapsing over time. If the reserve fund had been properly maintained and added to, the Board could have paid for this with no increase in the condo fee.
So a special assessment was ordered - varying from $10,000 to $40,000 per unit owner. There was outrage, of course. One owner asked why the government couldn't pay for this. Another suggested the Board borrow the money, but banks were not too willing to lend to a sketchy and indecisive condo board. The special assessment was passed - after much hue and cry and hair-pulling. And a new board was elected, mostly because the old board was tired of the abuse and even death threats they received from other unit owners.
Of course, with the special assessments, prices plummeted, which made it even harder for some unit owners to refinance and take cash-out to pay the assessments. More assessments followed down the road, as more and more "deferred maintenance" reared its ugly head. Many started to wonder why the board turned down the redevelopment offer when they had the chance. Too little, too late, the condo owners started to think about selling out - but there were no buyers!
* * *
Like I said, the story is true, but I changed some minor details to protect the guilty. This shit actually happened more than once. Like any government, the condo association gets distracted with "social issues" which the voters (condo owners) think are paramount, even as long-term liabilities (Social Security, Medicare, Roofing Fund) are gutted or under-funded. Board members - or Congressmen or even Presidents or Supreme Court Justices - engage in self-dealing to enrich themselves by pitiful amounts, at great expense to the taxpayer or condo owner. Same shit, different day.
We've owned three condos and seen some of these sort of things going on. A common thread is that the owners want low fees at the expense of long-term security. Investors who want to "flip" a condo know this is bad for long-term owners. Long-term owners just don't realize how expensive deferred maintenance can be - or how deadly.
In Florida, there are laws in place that mandate how much of a reserve a condominium must have to cover long-term expenses. When we lived there, the law was in place but there was little in the way of an enforcement mechanism. In January 2025, there will be an enforcement mechanism in place, apparently, and condo associations are scrambling to fund reserves as well as pay skyrocketing insurance costs. Many condo owners are discovering that, even with a "paid-for" condo, they can't afford to live there. Many units are on the market and retirees are starting to leave Florida.
My experiences with condos was illuminating. It illustrated to me how human nature is an inexorable force that tends to screw up even a wet dream. This is why we can't have nice things. People, in the aggregate, are assholes - narcissistic, greedy, selfish, and foolish. Not "others" mind you, but you and me. We all want lower taxes and special insider deals - it is a survival instinct. Let the other guy pay - particularly if the "other guy" is either yet unborn or too young to vote.
There is hope, however. People do, on occasion, figure things out and vote for responsible people to do responsible things. Problem is, we have very short memories. Obama spends nearly a decade slowly digging us out of a hole that Bush dug. But after a few years, people say, "Gee, remember the good old days when your house doubled in value in the space of a few years? Let's go back to that!" And they conveniently forget the last days of the Bush administration, when it all went so horribly wrong. Or if they do remember it, the claim it was on Obama's watch and all his fault.
Sadly, our four-year election cycle works this way. You can get elected to office and burn the White House down - handing the keys to the smoldering wrecking to your successor. "Things were so much better when I was President!" you can say - neglecting to mention how you soaked the place in gasoline and lit the match as you left. "Look at the new guy! Presiding over a burned-down house!" And after he spends years painstakingly putting it back together, one board and nail at a time, you can take credit for that as well.
And that's politics in America, 2024, whether at your Condo Association, School Board, Town Hall, County Government, State House, Congress, or the White House.
Me? I'm voting for the guy who is outlawing door mats. That's the burning issue of the day!
