Florida's HOAs and condo associations are making the housing crisis worse

Florida's homeowner and condominium associations play a significant role in the housing crisis. The HOA Spy database indexes 104,659 associations across the state, with many holding thousands of homes. These associations bring 10,296 foreclosure suits against their own members, record 460,412 claims of lien, and 277,047 lis pendens against homes. Each suit and lien impacts the housing market, as they prevent sales, lead to auctions for debt and fees, and put pressure on homeowners.

The associations have the power to collect dues, maintain the community, and secure insurance for properties. However, the records show that these associations often prioritize their own interests over the homeowners. Associations can levy liens and foreclose on homes for unpaid assessments, and the resulting debt is secured by the lien. The foreclosure process, initiated by an association, can be faster and more aggressive than a lender's foreclosure.

Since 1978, there have been 460,412 claims of lien recorded by associations in Florida, with 277,047 lis pendens. Most liens are eventually followed by a foreclosure filing. For example, the Beachplace Towers Condominium Association had 8,798 liens recorded. Older condominium buildings are now required to pass a structural inspection and fund structural reserves, paid for by owners through higher dues and special assessments. If an owner cannot pay, they are back at square one.

Mortgage Professional America reported that condo values in Florida fell 9.9% over the past year. High association fees and falling values create a housing crisis, as homes cost more to maintain and sell. Associations are also at risk when they are dissolved, delinquent, or not in good standing with the state. Such corporations cannot reliably insure properties, keep reserves, sign contracts, or answer lenders' questions, which can stall sales in the community.