MAMI FL – 2/14/2023
On Feb 14 we reported on the financial misery that has befallen the stakeholders of the 235-member Palm Bay Yacht Club in Miami, FL. –
https://hoadetective.com/from-tipping-point-to-40-year-certification/
Readers may recall, the PBYC is yet another aging condominium that has reached the transformative tipping point. After 40 years the community is faced with a staggering level of renovation spending that has prompted the current Board to consider a special assessment which has been reported to be $175K per owner – a sorry tale of woe and want we can all agree.
PORTLAND OR – 2/15/2023
Fast-forward a week and across the country, and we find yet another aging condominium making the news in Portland, Oregon. This time the stir was caused by a Board of Directors that levied a $5M special assessment against the 111 units in the “Adult Condominium” known as Copperfield HOA. With a price tag averaging $45K/unit, it is easy to see why the elderly stakeholders are up in arms.
Located at the opposite corner of the lower-48, in the recesses of SE Portland, OR, the Copperfield Adult Condominium Homeowners Association, is a sprawling complex. Occupying the better part of two city blocks, the development consists of more than 20 individual buildings, which house 111 condominium units and an unknown number of garages.
The Multnomah County Tax Assessor’s online database, confirms that construction of the Copperfield development was completed in 1974, almost a decade before the PBYC facility.
The Feb. 15, 2023 article published in the Portland weekly Willamette Week (WW) reports that the Copperfield Board of Directors recently announced that a special assessment of $5M would be required to pay for desperately needed renovations, most notably the replacement of the 49-year-old siding.
As of the date of the WW report the assessment had been ratified by the Board with the first payment on the special assessment due on April 1st.
A PERFECT STORM
Adding to the complications is the fact that the Copperfield HOA is also an “adults only,” or over-55 community. As many in the industry are well aware, the combination of an aging HOA demographic, coupled with an aging facility is often a perfect storm, which is only exacerbated by a lack of replacement reserves.
Unfortunately, for the stakeholders at the Copperfield HOA, the data suggests that there are no easy answers when faced with a special assessment that amounts to one-third of the current market value of the unit. Because the assessment is allocated among the owners according to the size of their unit, the actual amount paid by each owner ranges between $40K and $52K.
Those unable to pay the assessment in a single payment will be required to make monthly installments for 300 months (25 years). Considering the advanced age of the Copperfield facility it is possible that the protracted payback period of a quarter of a century could exceed the effective remaining service life of the building structures, to say nothing of the underlying infrastructure that serves the community.
In reality, both situations are financial calamities that could have easily been avoided if there had been a determined attempt to prevent either over the course of the last four decades.
So remember, you may be able to kick the can down the road for a time, but eventually you run out or OFF the road!
