A funny thing happened during the real estate boom: Condo owners became vital businesspeople and condo boards (pictured) became crucial to their building's future. Whether they wanted to or not, the individuals behind the Homeowners'/Condo Associations often times determined the fate of their entire building, and, to some degree, the Chicago condo market.
Can the Homeowner Associations Resurrect Condo Sales?
One developing -- and concerning -- trend is the increase of associations that are struggling financially. As a result, assessments are rising, at a time when homeowners can't afford it, and the entire building struggles with foreclosures, short sales or low sale prices.
I've seen many legal issues arise from this segment of the industry, more so over the last year. In particular, more homeowners are seeking legal advice to find out their recourse against associations that mismanaged reserves and submarined the unit owners.
There are some options, depending on whether duties and/or contracts were breached. But the rise of association issues has made it clear that these associations play a key role in the condo real estate market. When condo boards and overall associations are healthy, the real estate itself has a greater value. I've personally seen several real estate transactions fail to close because of legitimate concerns about low (or no) reserves in the association.
If you're a condo unit owner and have never been involved in the decisions of your condo board, now is the time to take an active role. And even if you're not a board member, sit in on a meeting or two just to see the types of decisions being made about your building. It can give you tremendous insight into the future of your building, and how your assessments will change in the coming years. If associations are run better and overall financial security increases in condos across Chicago, the condo market will greatly benefit -- and so will condo property values.