# A scary condo dilema



## Hoopjohn (Mar 8, 2013)

I live in a touristy area of Northern Wisconsin. Crystal clear lakes are plentiful in the area. Condos first made there appearance around here just in the last 10 years.
I'll relate what happened at one of them.

It took a long time to get the approval to build it, mainly because of the septic system. The state of Wisconsin doesn't like letting businesses run there own septic systems, as they believe when times get tough, shortcuts will be taken.
Anyhow, the condo project finally got the green light from the local powers that be. Construction was to take place using local contractors. The local contractors were dismissed after a month and replaced by undocumented (low paid) workers. 
No expense was spared in making the curb appeal look grand. But, the building materials used were the cheapest of the cheap. 

The 1st segment of the condos was built. 50 units. Phase 1. Ultimately, there are 3 phases & 150 units.

Then....the economy tanked. Only a handful of condos were sold. The developers went bankrupt. 
The condos went into foreclosure. A couple of years later, the bank (close to being bankrupt as well) wrote off the loss & sold the property for 2 or 3 million, losing an estimated 20 - 30 million in the process.

The new owners dropped the price of the unsold units by 50%. All of the initial 50 units sold.

Then, the new owners did a roundabout that would make the Nigerian con artists envy. They somehow got the capacity to vote the yet unbuilt units (100 of them) as they wished. They voted to increase the maintenance fees to $625/month!!!!!!!! They administer the maintenance fees and pay themselves.
Most of these units sold for $150K-300K. Now, the owners are stuck paying a whopping $625/month in maintenance fees. They still are responsible for property taxes, electric bills, homeowners insurance, etc.


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## ozarkchaz (Feb 4, 2005)

Granted, every business plan has a goal of a return on investment. But that's not the issue here. If there was a written agreement regarding fees with the with the prior owners, it may be upheld by the courts.

IMO, a class action lawsuit may be in order. Consult a *Real Estate Attorney* in your area.


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## Jayfl77 (Jan 12, 2008)

The developer having voting rights for all unsold lots/units is common. It's that way with pretty much every new neighborhood here in Florida. My association fees are $300 a year but I know some people in the neighborhood beside mine and they pay $500 or so a month. Association fees are all different depending on amenities offered. It sucks, but I bet there is limited legal recourse for them.


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## oregon woodsmok (Dec 19, 2010)

That's the trouble with buying a condo. There are association fees every month and those fees can, and do, go up, sometimes very sharply.

Owners have to pay for maintenance on the entire property, not just their unit. It sounds like there is a lot of underdeveloped property. That still has to be maintained. Probably the owners are baying for all roads in the immediate area.

By the way, $600 a month for association fees is not all that unusual. I've seen condos where the association fees are in the thousands every month. I've also seen bare land where the association fees are over $800 a month.


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## edcopp (Oct 9, 2004)

When there is a contract, in writing; it is very often a good idea to read it befor signing it.


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## GoldenCityMuse (Apr 15, 2009)

Reason 47 to NEVER buy a condo.


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## Conhntr (Aug 7, 2010)

They do the same thing with HOA's. the "lien holders" are required to vote on certain things (disbanding the hoa, downsizing it) and of course you will never get the mortage holders to vote to disband the hoa! 

It made shopping more difficult but NO HOA was on my list!!!


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