Yep, it’s a question a lot of us have been asking: With The Donald being such a high-powered real estate developer, what does he think about owner associations? After all, he creates the covenants for all the condos he sells.
His take, linked below, is extremely interesting.
(link to Virginia blog on Trump and condo associations)
Ward, it’s not at all surprising that Trump doesn’t trust Owners’ Associations. Lots of developers agree with Trump, and hold onto control of a housing project as long as possible — as long as they are making a profit. As soon as the profit potential is used up, or a problem surfaces, the Developer drops the Association like a hot potato and “allows” the owners to have control. Often that means dumping big financial burdens onto homeowners — it could be construction defects that don’t become apparent until the warranty period is up, it could be a failing golf course or restaurant, it could be woefully underfunded reserves, it could be unfinished amenities that were promised to early buyers.
On too many occasions, developers have declared bankruptcy and left the housing project to become an unfinished Zombie. Condominiums became easy prey for investor groups looking to buy cheap and make a killing by converting to rentals in a hot market. Subdivisions have become ghost towns or worse, just hoping that another group of investors will come in and pick up where the original developer left off. Some of these subdivisions will probably never be completed as originally planned. Many will eventually be rezoned and re-platted.
Among the key flaws of the HOA industry is handing over complete control to Developers and subsequent Investor Groups. It is because of these profit-motivated individuals that the corporate HOA model has been created. These should not be called “homeowners’ associations” but “Developer Compounds” or “Real estate investment camps!” That’s how 99% of HOAs begin their life cycle.
HOAs are not created for People. They are created for the Profit of what has become a behemoth HOA Real Estate Machine.
Developers know very well that homeowners are generally incapable of successfully managing a condo or a subdivision over the long term. There’s too much conflict and division, and too little knowledge. Management companies know it, too, and have stepped in to fill a void. The problem is, a lot of management companies either aren’t doing a good job either, or exploit HOAs for their own gains. And of course, there are too many Attorneys, Collection companies, insurance companies, etc. that have jumped on this gravy train — and too many that care very little about serving the needs of residents. Too many just want their piece of the action.
Very few are representing interests of homeowners, like Atty. Cowherd.
I wish I’d know all this stuff before I bought my condo. At the time, I was looking for a low maintenance small place for a single person who commutes, and my condo seemed to fit the bill.
But now it’s horrible, and I can’t even sell to break even.