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 Another Piece of the Housing ScrewJob
Tsherry 11k posts, incept 2008-12-09
2023-01-23 22:24:20

Common in China however.

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No statement should be believed because it is made by an authority. R.A.H.
Guerin 144 posts, incept 2021-09-26
2023-01-24 08:14:29

Allowing the homeowners' insurance to go after the principals of these construction companies via subrogation might be an idea. Florida could require the principals of any building contractor issued a permit to maintain sufficient commercial insurance coverage against defective workmanship for 10-20 years after the work is completed or be personally liable if the insurance is insufficient or lapses.

Florida could also stop the serial closings and reformations by requiring that if someone who has previously owned a construction business files to start or be a principal in a new construction business, they have to provide proof of fully paid tail insurance for a period of 10-20 years from the cessation of business of the old entity.

While I'd rather see prosecutions, having the insurance companies do the dirty work of financially stripping the frauds down to their underwear might help incentivize proper work.
Margbp 138 posts, incept 2021-12-02
2023-01-24 08:14:40

My mom was president of her condo association for 18 years. I think there's around a dozen buildings with 18 units in each building set on several acres next to a huge city park. Took the reserves from $70,000 to $700,000. Mom's a real Karen and tight with a dime. She made it her job to stay on top of the owners and board members. As aggravating as she can be she kept getting reelected. It's been 7-8 years since she quit. The board's a mess. They don't have $700,000 any more that's for sure.

We had our new roof installed in January a few years ago when the temps were in the 30s. Sounds like we were lucky nothing flew off until it got hot.

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It is difficult to get a man to understand something when his desires depend upon his not understanding it.
~Upton Sinclair slightly paraphrased
Tickerguy 192k posts, incept 2007-06-26
2023-01-24 08:15:19

Yep.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Rangeishot 2k posts, incept 2021-11-18
2023-01-24 09:08:04

Whitehat, I think you described my landlord to a tee (T? hmm, gotta go look up the meaning/origin of that...)

Owns some single-family homes and is starting to freak out. We have the nicest of his properties, I think our place was his attempt to move up-market, but between insane property tax hikes last year and some unexpected repairs, plus a longer period empty due to the higher rents this area commands, he lost money last year. I imagine it'll only get worse.

Excellent characterization of the problem (traditional rentals or AirBnBs, largely the same issue).

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Welcome to TF: The "T" stands for "Thoughtcrime"
Twiggler 166 posts, incept 2021-02-02
2023-01-24 09:54:24

Forward --- I haven't taken the time to read through all the comments.

My story and the reason I say HOA's are of the devil is not the organization and the thought behind why a group of owners has one. It is because of the people who tend to gravitate to want to be on the board and run them.

And Condo HOAs have different concerns and needs than traditional neighborhood HOAs. Mine is a traditional neighborhood HOA. The issue with where I live is that there were 4 different builders building up the area. Each had their own HOA and covenants. When the are was finally built out the 4 groups came together and merged. Not sure that was a good idea but it happened.

For several years there was a group on the board that did right. They took care of business and actually had a rather large reserve fund to handle things like common area fencing and landscaping needs, etc. Over time these people either moved or got tired and new people moved in and were elected to the board. This new group were in it for themselves and didn't have a clue how to handle finances and forward-think. They squandered the reserve on fluff stuff (tore down perfectly fine entrance markers and created new ones, tore out perfectly good landscaping for new stuff, etc.) just to kick back to friends and people in the neighborhood who owned those types of businesses.

There were a few of us that attempted to get people to see and care. The problem is 90% of the owners didn't care. Last year our dues went up 25%+. More started caring. It seems people are people and don't care until affects them.

Lastly, HOA ARCs (architectural review committees) are like the Nazi gestopo. They send me a note about painting my mailbox (my mailbox was not bad, just the numbers needed changing and I had already bought them and just hadn't done the work yet) when my next door neighbor had a car up on jacks for months on end and others down the street hadn't cut their yard in months, etc. Its this type of picking nits that makes me want to end them.

Again, none of us is as dumb as all of us.

Vernonb 2k posts, incept 2009-06-03
2023-01-24 12:24:52

No condo for me. I prefer to be 100% in control. If something gets FUed from lack of maintenance I'm the one to blame. And I am very proactive when it comes to such things.


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"Mass intelligence does not mean intelligent masses."
Ihsmta 862 posts, incept 2008-04-10
2023-01-24 17:18:21

@Twiggler... Absolutely. My mother owns a condo in a four unit building as part of an HOA. All units are single story. However, it seems those with control issues pursue seats on the BOD and those with control issues not on the BOD take it upon themselves to fight with the BOD about things of little consequence. A royal fuster cluck that I have no interest in being a part of in this lifetime or the next.

From my lending experience I can tell you that amortization of debt beyond the accelerated depreciation of assets is at epidemic levels in this country. Under the best of circumstances, it's difficult if not impossible to repair, replace, or finance in the long term.

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"Economists are no different than the prophets of ancient Pompeii who reassured that Mt Vesuvius would never blow. After all, it never had before." Baxter Black, DVM and Cowboy Poet

"You can avoi
Whitehat 11k posts, incept 2017-06-27
2023-01-24 18:43:40

In this video the presenter also brings up the issue of insurance companies replacing roofs at the end of their useful lifetimes due to "storm" damage. I do not agree with his opinion on the matter.


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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Tickerguy 192k posts, incept 2007-06-26
2023-01-24 18:44:25

This is an extremely common scam in Florida.

My neighbor attempted it.

I killed it.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Whitehat 11k posts, incept 2017-06-27
2023-01-24 19:04:14

I guess that i should not mention to you that there will soon be a house for sale next to me.

The fun question is does he know that you did it?

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Tickerguy 192k posts, incept 2007-06-26
2023-01-24 19:05:16

Probably. The roofer that I had replacing MY roof (worn out, not damaged, both places built at the same basic time) was solicited by him while they were working on it. Said roofer asked me, directly, if there was in fact a reasonable probability of damage from said storm and told me why.

I gave him an honest answer.....

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Whitehat 11k posts, incept 2017-06-27
2023-01-24 19:15:03

Surprised that the roofer cared as they usually like to rape the companies for the profitability.

Unless you had a really honest professional there; would be nice to know at least one.

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Tickerguy 192k posts, incept 2007-06-26
2023-01-24 19:15:38

Well, it was after he was up there on it (saw him up there); I suspect he looked, knew it was hinky, and was asking to see if there was something non-obvious.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Whitehat 11k posts, incept 2017-06-27
2023-01-24 19:34:09

Fair. Mentioned something before which has to eventually come to Fl. In the NYC Metro insurance companies are demanding replacement of roofs past a certain age unless the homeowner can get at least two recognized roofers to state that it has at least 10 years of life left in it. Lots of resale purchasers have been banged after a legit home-inspector stated that it was fine. Sucks to be them.

It is also happening on policy renewal to the crowd who figures that they will wait for the next RE boom or storm, sell or replace.

They are sending out field agents to photograph the roof and house for new policies and renewals.

Actually agree with this and think that there should be more formal insurance inspections. Can't begin to tell how many assholes got a 70s shit kitchen replaced because of a minor leak and other insults to common sense. Yea, right.

The next thing which the industry needs as well as auto collision is proof of all of the "work" the adjuster writes actually being done, pics, inspections and invoices throughout the repairs. Cannot begin to tell you the things that i have seen.

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smiley Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris
Packetcap 1k posts, incept 2021-07-23
2023-01-25 19:44:27

I live in a decently managed HOA governed community, 350 units, a mix of townhomes and three story condo units (one unit per story).

Built between 1975 and 1985 the buildings are getting older.

Currently the reserve is approaching 2 million. Heavy maintenance being done on the roofs where needed. plumbing was replaced everywhere ten years ago, the new plumbing was revenue positive due to the costs of repairs.

There is a nightmare building in San Francisco called Millennium Tower. In short, it's leaning over. The rate of lean is growing over time and now is 28 inches. The building is also sinking.

Quote:
An examination in 2016 showed the building had sunk 16 inches (41 cm) with a two-inch (5.1 cm) tilt at the base and an approximate six-inch (15 cm) tilt at the top of the tower. The building is leaning toward the northwest, and has caused cracks in the building's basement and the pavement surrounding the tower. As of 2018, the sinking had increased to 18 inches (46 cm) with a lean of 14 inches (36 cm). Measurements in 2022 show the tilt increased to 28 inches (71 cm), as measured from the roof


Imagine trying to sell your unit with that happening.
Tickerguy 192k posts, incept 2007-06-26
2023-01-25 19:46:26

Imagine the potential joint and several liability if it falls over and a bunch of landsharks manage to attach that to the owners.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Packetcap 1k posts, incept 2021-07-23
2023-01-25 21:45:17

There have already been lawsuits and settlements.

The builder has proposed a $100 million plan to fix/stop the lean and sink:

https://sf.curbed.com/2019/8/29/20838672....

Bobinyelm 2 posts, incept 2011-05-01
2023-01-26 09:49:45

I read the article mentioned by another poster, but the Condo Fees With Reserves in my opinion will make condos unlivable and unsalable.

If a Condo or Town House has a vale of $310k and a new owner puts 3% down, with P&I his payment will be about $2500 per month plus perhaps $200 Property Tax and Homeowner's Insurance if $250/mo (A guess for Florida properties given hurricane potential), then you add $2452/mo Condo Fee (w/ reserves) this will result in a monthly expense of over $5500 per month, or $66,000 per year in payments on a $300k unit.

By any reasonable lending standards, one's home expenditures should not require even 50% of one's income. So in order to buy a VERY low cost Condo or Town Home, the owner would have to earn at LEAST $132,000 er year.

Using Ocala, the Average Household income there is about $63,914 (From: https://www.deptofnumbers.com/income/flo.... I don't know how many "average" earners/families could possibly afford to pay $3000 MORE (before taxes) than the family income to buy and live in an exceedingly cheap Town House. I found $279k as an average Town Home in Ocala, but even if one could find a very modest 2br unit for $175k, payments with Condo Fees would be $1000/mo less than the $300k unit, or $4500/mo or $54,000 in housing costs.

How does anyone hope to live in such a unit? Prices would have to approach ZERO for such condos/town homes to be affordable by an average buyer-this is NOT a "Luxury" dwelling, after all.
Tickerguy 192k posts, incept 2007-06-26
2023-01-26 09:51:08

Waiving reserves is arguably fraud.

They're trying to get consent to it from the owners. The problem with that is that doing so makes the unit unmarketable, and not just yours -- all of them, so damned if you do, damned if you don't.

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The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.

Fasteddie81 44 posts, incept 2017-05-11
2023-01-26 13:35:30

The linked article states that FL has a total of more than 1.5 million condo units. They do somewhat of a breakdown by age, as well as more info in another article they link to.

Doing some math comes up with a rough breakdown of condo units in FL by age (below). I feel like this is an underappreciated aspect of the problem. There appears to be this huge "bow wave" of condo buildings out there that are 30-40 years old. The collapse in Surfside (Champlain Towers South) was built in '81, and seems to be a typical example.

This seems to make sense, given the explosion in South Florida real estate that occurred in the early 80s. An anecdote I've heard is that these high rise buildings have a core water supply system that is usually designed with a 50-year life. If they need to be replaced, it's incredibly invasive (as you're tearing into the core of the building), and incredibly disruptive (as your interrupting water to all of the units).

I don't know where this all leads. If you have a building with a bunch of deferred maintenance and insufficient reserves, it seems plausible that the units end up being worth less than zero. Then what does the state of FL do? It's not a good look for them to start throwing people out of a building, particularly if there isn't an immediate, imminent danger. I suppose you end up with "Zombie Buildings," can't fix them, can't sell them, can't throw the people out.

588,000 0-30 years old
479,000 30-40 years old
328,000 40-50 years old
105,000 older than 50 years

Ee4fire 810 posts, incept 2011-03-24
2023-01-26 23:19:07

I work with a number of civil engineers who do defect and storm damage cases. I have a number of co-workers who have spent months and months in FL examining storm damage and construction defect claims. They have interesting stories to tell on both sides of the equation.

Listening to Whitehat's video reminded me of many issues I see working insurance claims. Insurance companies have a contract with you to insure you against a loss. Most of the adjusters I have dealt with want to properly adjust a claim. I have seen insurance companies bend over backwards to appease an insured or get them out of a bad situation. I have seen them play tough also. Insurance companies will pay for stupidity, they will be difficult or won't pay for intentional acts and embellished claims. The non-existent gun, toy, coin, etc. collections won't reimbursed. Yes, I had insureds ask me if I saw all this stuff that never existed. Fire doesn't destroy everything. I have found some very interesting things also. Not all sex toys, etc. get destroyed.

You as a property owner are required to maintain the property. No matter what the guy in the video says. If the insurance company insures the building in disrepair, then they can be on the hook. Insurance companies have paid claims because of their stupidity. I have called adjusters on more than a few occasions and asked, "Why did they insure this place?"

Roof damage are some of the most fraudulent claims. Hail damage is a big one for fraud. It is easily spotted even after a hailstorm.

I get the "lightning" damage claims to HVAC and other appliances. HVAC contractors are famous for telling their customers they can have their 15+ year old A/C unit replaced if they call the insurance company after a thunderstorm and have them replace it. The HVAC contract will write up the invoice as lightning damage when there was no lighting within 10 miles of the place. There are legitimate lightning damage claims. Parts cannibalized A/C units are not lightning damage. Yes, this has been tried.

Most, but not all, public adjusters I interact with are a cross between a timeshare and used car salesman. Most of them show up when a house is still on fire or just flooded and the homeowner is in a panic or weak moment. Some PA's bring presents to the local fire departments so the firemen will call them while they are heading to a fire.

They promise to stick it to the insurance company and get you more money. If you have a loss which will be the limits of the policy a PA is just taking your money. I think the PA's have a purpose especially if you have a second home/property a distance away from you. All insurance companies work off the same industry estimating software and the restoration contractors.

Sometimes an insurance company will play hardball with their insured and then the PA can be very helpful. Never sign up with a PA until after you have dealt with your insurance company first. Don't sign up on the date of loss, give yourself sometime to collect yourself and calm down. The shyster PA's play on that emotion. Not all PAs are shysters. Next thing you know they control everything, and they require the insurance companies to issue joint checks that are mailed to them. They take their % off the top and then send you the rest, unless they are paying their contractors out of the proceeds first.


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(Politicians), 536 commoditized temple monkeys pawing through the ruins of America in search of bribes. (The District of Corruption) works like a vending machine. You put coins in the slot, select yo
Mannfm11 8k posts, incept 2009-02-28
2023-01-27 07:24:49

Maybe they should have ruled tht after 30 or 40 years they tear them down. I suspect along the ocean front a hell f a lot of stuff can happen. Seems I recall Florida is famous for sink holes. Of course, I'm joking, but salt air and shifting sand can do a lot of things to the stability of a building.

We have an old townhome. Included in the HOA is money to paint the exterior every few years. The value of all property can go to crap, if half isn't painted. That is light, compared to the damn things falling down.

There just happens t be a lt of costs to owning housing over time. I try to maintain several hundred thousand dollars, for a few reasons. One, you can never acquire a bargain, if you are broke. Next, this is a family business and the youngest of us are 63. Any and all of us are going to need cash in the future. Third, some years you fix nothing. Others you might do 2 or 3 houses. Those are now around $30K. Some of these properties are pushing 50 years and haven't had full redo's. I don't know that I have agreement, but there are shit sandwiches to eat from time to time.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Mannfm11 8k posts, incept 2009-02-28
2023-01-27 07:25:43

@Ee4fire: I have had my claims, but I hate filing them. One I had, I replaced a roof and not 6 months later there was a hailstorm from hell. Probably golfballs at a minimum. The ones that break car windshields. I hated taking that brand new roof off, but it was destroyed.

Roofers are like vultures. The only bar to entry here is a card and if you can locate a Mexican with a crew. I have contracted my own work and I never worry about overpaying the help. If there is an injustice in America, it is the difference between what a roofer makes and the contractor. We had a bad storm here in early 2019, after a bad one in 2016. I heard they were having to pay the help $300 a day. The contractor margin is over $200 a square. A day on a roof, in my prime might have killed me.

It never occurs to people they, not the insurer pays for the roofs. The more extreme the claims from year to year, the more Re-insurance costs. Insurance is one of my fastest rising costs. I think I have 3% deductibles now, so only a big storm or fire will pay.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Rangeishot 2k posts, incept 2021-11-18
2023-01-27 07:26:25

I believe there are more condo buildings in bad shape than most people realize.

When we decided to retire (in the Before Times when that seemed like an option) and we started researching the downsizing part of the plan, my wife went waaaaay overboard and decided we should look at condos. For me that was never an option (I need at least a small garage to maintain my sanity) but I figured there were enough drawbacks she'd change her mind on her own (and she did).

We looked at many, many condos of all descriptions, from the simple two-story quad type things up in Savannah to $1200/sqft riverfront towers here in Jax. I'm no inspector but visible damage was evident in just about every single property we visited (I did make sure to also walk the garages, parking lots, everything I could access). About the only places we didn't look were beach areas, we've been through enough hurricanes to have the sense to avoid that noise.

People are insane to live in condos.

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