Speaking of stories that tug at the emotions and then make you say, “Wait…”, there’s another one in today’s Statesman.
We previously noted the fire at a downtown condominium. That was January of last year, and the management is still working on restoring the eighth floor (where the fire was). The process is a little complicated, due to building code and insurance issues.
So there’s this older couple who owns a condo on the eighth floor, and who haven’t been able to occupy it yet. The Statesman notes that they’re somewhat upset because they still have to pay the maintenance fee for the condo’s common areas. (That fee, in their case, amounts to $561 a month.)
At first blush, that sounds unfair. After all, they can’t live in their property; why are they being charged a fee? But wait a minute…
- Those fees, as noted, are for maintenance of the common areas in the building; the lobby, the pool, hallways, parking areas, etc. The couple isn’t being denied use of any of those areas. Indeed, the manager notes that they’re still fully entitled to all the benefits of property ownership in the complex.
- The Statesman quotes their son as stating “It’s been a hardship for my elderly parents, who are on a fixed income. My parents have paid $9,000 in fees that we dispute.” But hang on; they would still be paying the fee if they were living in the condo, so how is their fixed income relevant?
- I understand the couple and their son dispute the fees. However, as the Statesman notes, those fees are set in the condo association’s governing documents, and the association has no power to waive them. (That is, unless 2/3rds of the property owners and their mortgage lenders agree to amend the rules.) The lesson here is: make sure you understand the documents you signed. (Second possible lesson: make sure your insurance coverage deals with situations like this.)
- Their fixed income might be relevant if they were coming out of pocket for alternative housing while they were displaced. But as I understand it, the condo association (or, at least, the insurance companies involved) are paying for alternative housing while owners are displaced. (If I’m wrong about that, someone correct me in the comments.) If the condo association isn’t paying, it would seem like homeowner’s insurance would cover that as well (depending on how the policy is written). And, the capper…”He and his wife have been living rent-free in a house owned by [their] daughter”.
So they’re not coming out of pocket for any rent. The only thing in dispute is the fees for the common area, which they would be paying no matter what, and which covers things they can still make use of while they’re temporarily displaced.
This is news?
Edited to add: I didn’t think of this until now. $561 * 14 (January 2011 – March 2012) = $7,854. So where does the “$9,000 in fees that we dispute” figure come from?
I agree that the article could have been written better, but I think you’re going a little extreme in siding totally against the displaced condo owners.
On your wait-a-minute points…
1. They have access to all the benefits of property ownership EXCEPT THE OPPORTUNITY TO LIVE THERE. Access to the parking garage, halls, pool, etc. are not useful to people who don’t live in the building.
2. Presumably the couple can afford the fees normally. A failure of the article is not making it clear whether living elsewhere is causing a lot of additional out-of-pocket expenses. More than one set of displaced condo owners should have been interviewed for the article. Likely different insurance companies and plans offered different benefits.
3. The person who said it was not possible to waive the fees was the one who collects those fees, and whose salary is likely paid in part from those fees. Clearly it is in his interest to bring in as much money as possible. A more impartial source (such as someone from the homeowners’ board and/or a lawyer) should have been consulted.
4. Yes, the couple interviewed have children who are letting them live rent-free. But if the fees are in dispute, the existence of generous children should not invalidate the dispute. And other displaced condo owners, who presumably do not all have such generous relatives, should have been interviewed to provide more data.
A.T.:
Thank you for your comments. I was out until fairly late last night, and have not had a chance to respond until now.
I respectfully disagree with many of your points. First of all, I do not believe I am “siding totally against the displaced condo owners”. I am mildly sympathetic to them; my main problem is with the way the Statesman approached this story, by basically grinding an axe for them rather than looking deeper into the issue.
To respond to some of your specific points:
1. “They have access to all the benefits of property ownership EXCEPT THE OPPORTUNITY TO LIVE THERE.” Quite true, but I’m not sure how that relates to the agreement they signed. If I bought one of those condos as an investment and didn’t live in it, would I be able to get out of paying the common area fee? If I was forced to move out of state and put my condo up for sale, would I be able to get out of the common area fee? I believe the answer to both questions is, “No”, and that I would still be legally obligated to pay the fee until I transferred ownership.
You may argue that this is a different situation since the owners are involuntarily displaced. I agree that is an argument that can be made and is not outlandish, but I feel the Statesman presented only that side, and there is an equally strong argument to be made for the position I have outlined.
“Access to the parking garage, halls, pool, etc. are not useful to people who don’t live in the building.” It may be inconvenient for them to make use of the pool, parking garage, observation deck, etc. but I can’t agree with you that continued access to these amenities is “useless”.
2. “Presumably the couple can afford the fees normally.” I agree, and I believe I made that point; the couple would be paying the fees if they lived in the condo in any case.
“A failure of the article is not making it clear whether living elsewhere is causing a lot of additional out-of-pocket expenses.” Based on the tone of the article, I believe if they were incurring additional out-of-pocket expenses, those expenses would have been prominently mentioned.
“More than one set of displaced condo owners should have been interviewed for the article. Likely different insurance companies and plans offered different benefits.” I agree on both of these points. In particular, on your first point, that is my main issue with the article; it basically amounts to carrying water for one couple.
3. “The person who said it was not possible to waive the fees was the one who collects those fees, and whose salary is likely paid in part from those fees. Clearly it is in his interest to bring in as much money as possible. A more impartial source (such as someone from the homeowners’ board and/or a lawyer) should have been consulted.” Although it is not mentioned in the article, I strongly suspect the Statesman writer was shown the provisions in the contract. Those assertions can easily be checked, and I would find it somewhat surprising if the Statesman writer did not do so. I would agree that an interview with an independent attorney would have made the story stronger.
4. “Yes, the couple interviewed have children who are letting them live rent-free. But if the fees are in dispute, the existence of generous children should not invalidate the dispute.” Agreed, and I never said that this should invalidate the dispute. My point was that the couple was not coming out of pocket for additional rent, and that they would have had to pay the fees if they were living in the condo, so the “fixed income” argument seems to me to be not relevant. You brought up the “additional out-of-pocket costs” argument, and I’ll repeat my response: if they do have substantial out-of-pocket expenses, those are mentioned nowhere in the article, and I believe they would have been.
“And other displaced condo owners, who presumably do not all have such generous relatives, should have been interviewed to provide more data.” On this, we agree.