Reduce HOA Fees?
How can condo associations reduce the effect of non-payment by unit owners? The housing crisis has created a problem for many condo associations in the country because of owners who are delinquent on condo fee payments. An owner who faces foreclosure and is in default of their mortgage is not inclined to pay their HOA fees which places a burden on other owners in a condo association. Is there a way to generate additional revenue for condo associations in financial trouble? Yes, typically they attach liens to the property and or raise fees for everyone else which just exacerbates issues and reduces property value. Perhaps the HOA could borrow from a bank, but this would still result in an increase in owner fees. Perhaps the condo association could lease frontage to a developer to build-out retail space. An existing building or development would be converted to mixed-use, and unit owners could specify the type of retail they want which creates a customer base for future tenants. This model would not work for all condo associations; however our society has increased a desire for urban walkable communities, and this concept has the potential to create a walkable neighborhood. Additionally condo associations do not have to be in financial trouble to utilize the service, but it could be a way to reduce HOA fees or fund capital expenditures and common area improvements.
See link for Wall Street Journal article discussing condo association hardships.