Condo Scam

There are condos owners who can’t sell their condos and can’t even rent them out. This is a nightmare for families who needed to move to a new job out-of-state. They have to continue to pay their condo mortgages and condo fees, but have no rental income to cover these expenses and they have no hope of ever selling their condo.

 

Condos normally have a rule limiting the owner’s right to rent out their condo. This rule is embedded in the HOA bi-laws. The rule limits the percentage of condo owners who can rent their condos. It may say that only 30% of their condos can be rented by owners. To make things worse, HUD enforces these rules.

 

Owners have assumed that they could sell their condos, but mortgage lenders have refused to lend mortgages to potential condo buyers in older condo complexes, because they are becoming a rental complex and values will decline.

 

Developers don’t care. They will wait until these condo complexes are worthless and then they will buy them up and tear them down to build something else. Mortgage lenders should care, but they don’t.

 

Retirees could buy these condos with cash if they are down-sizing, but this isn’t happening. The HOA rules on subletting, HUD enforcement of these rules and bank policies need to change.

 

This is a problem for everybody who may need to change jobs. Young families need to avoid the condo trap and buy a single-family home.   

 

Norb Leahy, Dunwoody GA Tea Party Leader