Condo Owners Pinched by Rising Fees, Falling Values

During the real estate boom of the 1980s, the condominium seemed the answer to yuppies longing for property and city chic. But after the bust, some residents now say they are living in condo hell.

Across the country, condominium associations are having trouble raising the monthly fees to pay for trash, sewer and maintenance services. And with declining real estate values, condominium owners cannot move.

Bruce Hopper, a 30-year-old attorney who owns a condominium in Boston, says he now regrets having bought his home in 1987.

“It’s too bad because it was the ideal situation for a lot of people, the first-time homeowners, the American dream,” Hopper said. “It didn’t pan out, because now we’re stuck.”

The 1990 U.S. Census estimated that 5% of the population lives in condominiums, according to Community Assn. Institute, a national group based in Alexandria, Va.

Hopper estimates his condominium is now worth half what he paid for it. And he has seen his monthly fees creep up 30% to $192 a month, on top of $700 a month in mortgage payments. In addition, he estimates he has had to pay about $2,000 in “special assessments” to cover costs.

Even with the higher payments, Hopper said his condominium group’s bills are paid so late that notices are sometimes posted in his building threatening service shut-offs.

Some owner-residents in Massachusetts say their associations are owed as much as $200,000 in back fees, forcing other owners to pick up the cost of repairs and maintenance. Others have allowed the buildings to fall into disrepair.

Hopper is among condominium tenants, owners and property managers pushing legislation in Massachusetts that would give condo associations a stronger hand in collecting unpaid fees. West Virginia, Pennsylvania, Mississippi, Washington, Rhode Island, Alaska, Connecticut, Nevada and Colorado have already passed such laws.

Gurdon Buck, a Connecticut attorney who heads the American Bar Assn.’s housing committee, says unpaid fees are a problem nationwide.

“It’s a problem wherever the economy is in bad shape, and having talked to condominium lawyers all over the country I frankly don’t know where it is not a problem,” Buck said.

Alaska and Texas have been particularly hard hit, as are the New England states.

Buck estimated that condominium fees nationwide average $150 a month.

Supporters of condo fee legislation in Massachusetts want a six month “super priority lien” that would give condo associations priority to collect six months of unpaid fees from the proceeds of a foreclosure sale.

Current law places associations after banks on the priority list.

State Rep. Marc Draisen (D-Boston), who sponsored the legislation, said the condo market was overdeveloped in the real estate boom of the 1980s.

“It was part of the speculative boom,” Draisen said. “We’re all left with the legacy of that right now.”