Condominium homeowners face rising condo fees and special assessments

The San Francisco Chronicle reports:

When Barbara Hernandez hit the jackpot three years ago and won a coveted "below market rate" studio apartment in the Landmark, a renovated historic building in downtown San Francisco, she never thought her sweet home would unleash a bitter struggle which would wind its way to the state legislature floor. Last year I wrote about Hernandez facing rising condo fees as well as repeated "special assessments" from her building. Hernandez, who had been recently diagnosed with breast cancer, then seemed like she was on the verge of tossing the American dream and selling her unit. Since then, however, Hernandez has held on -- even as the bills piled up and her own private real estate nightmare took on a political life of its own.

In many ways, Hernandez's experience is anomalous. A lifelong renter, she applied for a unit in one of the the Mayor's Office of Housing lotteries because she knew it was her only avenue for homeownership in San Francisco. But the studio apartment she "won" -- $233,000 for 450 square feet -- happened to be in a remodeled building with hidden construction issues and an upscale homeowner population who was interested in amenities like 24-hour doormen.

But Hernandez also represents a potentially scary future for many condominium homeowners in California. Not only as an official "below market rate" owner, but as a first-time home-buyer with modest means, Hernandez embodies the bleeding edge of a precarious new homeownership.

"I hear from them all the time," says Marjorie Murray, vice president of California Alliance for Retired Americans. "These are people on fixed incomes -- they can't afford these special assessments. You throw a sub-prime loan into the mix and they go into foreclosure. They have no choice but go bankrupt and start over."

Murray recalls one recent call from a San Francisco couple whose special assessments over the past three years have exceeded $100,000. Another came from a woman in Pasadena whose voluntary homeownership association had suddenly been declared mandatory and the monthly dues raised from $50 a month to $350. (This, says Murray, is a surprisingly common phenomenon as a few home owners attempt to resuscitate a dormant association or make membership mandatory so they can get the group to pay for work affecting their own property.)

A story well worth reading.