“It’s a nationwide issue,” Sykes said. “The condo association fees across the country continue to elevate, because they have to take care of their costs when it comes to maintenance and inspections that are required. What I’m really noticing is they’re going with higher insurance deductibles. Higher insurance deductibles mean they get cheaper insurance, which is not always good for their tenants.
“That’s the way they’re trying to offset some of those condo association fees and also put more money in reserves for something happens, like they have a hurricane. They’re actually hurting the owners of the property. Because when the owners of these condos are trying to sell, fewer people are buying because most people need financing.”
Guideline changes needed
It’s not just condos that are in crisis. Sykes said in many cases, townhomes also fall under condo associations. He wishes there could be changes to financing and insurance guidelines that could help more people get the loans they need.
“Townhomes are typically under a condo association as well,” he said. “Even if they say they’re a townhome complex, a lot of times they’re a condo association that’s tied to that. If there could be a fix on this, and if there were (new) guidelines for financing. Obviously, it’s at 5% but what we really need is, for instance, if you get a flood policy on a home or a condo that’s part of the association, you’re getting that condo’s flood policy.
“If you need a little bit more, the individual owner can get a supplemental flood to offset that. It would be neat, and it would help a lot with the affordability issues across the country if you could get a rider. I don’t know if it’s ever doable, but you know, everything starts with conversation.”