Source Newsroom: University of Illinois at Chicago
Newswise — Many of the nation's homeowner and condominium associations will be the next casualties of the recession due to ongoing mortgage foreclosures and falling real estate values, according to a University of Illinois at Chicago scholar of private government and law.
Evan McKenzie, associate professor of political science, indicates there could be a broad impact as approximately 300,000 homeowner and condo associations in America house about one-sixth of the nation's population.
"These associations place too much reliance on the resources of homeowners -- their money, time, energy, wisdom, and loyalty. Homeowners stop paying their association assessments before they stop paying their mortgage, and banks routinely refuse to pay assessments after they foreclose," he states.
"The result is that thousands of associations are being financially supported by fewer and fewer residents, setting in motion a chain of events that leads to insolvency."
McKenzie says homeowners are being left with major expenses and problems as many developers go bankrupt and leave subdivisions partly finished.
"They turn to their local government to take over their private streets that they can't afford to repair, or the playground they can't afford to insure, or the lake they can't afford to clean, and the municipality says, 'no,'" he explains.
"The owners get stuck with ultimate liability, because they have to disclose all these problems at the time they try to sell."
UIC ranks among the nation's top 50 universities in federal research funding and is Chicago's largest university with 25,000 students, 12,000 faculty and staff, 15 colleges and the state's major public medical center. A hallmark of the campus is the Great Cities Commitment, through which UIC faculty, students and staff engage with community, corporate, foundation and government partners in hundreds of programs to improve the quality of life in metropolitan areas around the world.
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