If a condo block will need work costing $100,000 per unit after 40 years, what's the proper way of financing that?
Does the HOA start saving up for it from year 1 by charging a hefty management fee? Do they rely on every homeowner being able to come up with $100,000 on demand? Do they just assume they won't be around in 40 years so it's someone else's problem?
I've never really heard a satisfactory answer to that, which is one of the reasons I don't own a condo.
It doesn’t have to be a heft fee if planned for. Docks are a known quantity where I live so planning is normal. 40 years ago did the HOA know they need to save for maintenance and repairs? What about 20 years? There is another building nearby that is exactly the same as the building that collapsed, but their HOA kept up with proper maintenance. That other building seems like it’s in great shape for a 40 year old building.
It will be interesting to see what happened here. Was the HOA so negligent over such a long period of time that it was just too hard to catch up (100k assessment is hard for most people)?
But at the same time for a single family home, it is not unusual to invest 100k in a remodel if the location supports it on a 40 year old house. A condo should operate similarly although the scope of changes you can make is different obviously.
HOA politics may have been part of it, but it was probably simpler. It was going to cost a lot of money, and people tend to fight large assessments.
The bigger HOA failure sounds like 40 years of poor maintenance. There are reports of a similar building nearby that was maintained, and it shows none of the same problems.