Mailbox: Condo Coercions, Short Shrift on Short Sales and Testing the Bath

My mailbox has been full of comments on recent columns about life in homeowners associations, uncertainty with short sales and deciding how much money to invest in a bathroom.

Last week's column about a Reston condominium association that turned off air conditioning to owners who were not in good standing drew the most comment. Here's an edited sample:

Larry Kilbourne, of Potomac Falls in Loudoun County, is a former president of a condo association. He wrote: "I have to take issue with your article in which you make clear your abhorrence of 'coercive' tactics to enforce dues payments. Our association of 280 units had a delinquency rate approaching 15 percent. Some members owed the association over $4,000, $5,000 or $6,000. These people had been living there for years without paying for the maintenance that kept up their homes and the grounds.

"I determined that we could legally shut off water to the offending units. And we proceeded to do so. In a matter of a few months, the delinquencies were either paid up, or the owners sold and moved, and, through liens, we recouped the monies owed.

"Is shutting off water harsh? You bet. But it worked, and the deadbeats always had the option of going elsewhere to bathe. If coercion wasn't needed, most associations would not resort to it. Believe me, it's the weapon of last, not first resort."

Others wrote about general frustration with associations. Joan Salemi of West Springfield wrote: "I am certain a bestseller, either humorous or otherwise, could be published documenting the missing-link decisions foisted upon helpless residents. Thus far courts have come down in favor of the rules of condo associations no matter the undemocratic or in some cases criminal-level actions taken by condo boards."

Roland Binker of Falls Church said: "My wife and I are planning to downsize into a condo in a couple of years and have started familiarizing ourselves with condos in the area, as best we can. It is amazingly difficult to get information. Real estate agents, and many times the sellers, are clueless. You said, 'You need to assure yourself that its personality is one you can live with.' How in the world can that be done?"

If only we had Myers-Briggs personality assessments for associations. In lieu of that, buyers should start their research with the meeting minutes and newsletters posted on the association's Web site. Are you finding an onerous list of "shalt nots?" Are services being discontinued or expanded? Are board slots vacant? Let Google tell you if folks are grousing about the association and its current president. Best of all, talk to residents if you can.

Jeanne N. Ketley, president of Maryland Homeowners' Association, ( http://www.marylandhomeownersassociation.info), a Bethesda volunteer group that lobbies for association members, offered advice. "Other boards have tried this (turning off air conditioning, electricity, water) around the country, and the local board of health usually swings in and stops it. Please suggest to that condo owner that he contact his county board of health if such an action is even threatened again."

Short sales remain easier to talk about than to complete, according to most of the mail. Victor Muzzatti, a title lawyer in Gaithersburg, wrote: "I have worked on at least a dozen and am probably going to close on one or two. They have been disastrous!"

But Todd Condron, a Vienna real estate lawyer who negotiates short sales on behalf of sellers, took me to task for saying that buyers should be prepared for these deals to fall apart.

"My jaw hit the ground when I read it," Condron wrote. "Let me say, short sales are not difficult at all. If the seller is organized, the seller will receive short sale approval in no more than four weeks, sometimes even within a couple of weeks, depending on the lender involved." He also took issue with the notion of sellers asking their bank about a short sale before the seller has received a purchase offer. "Loss mitigation departments will not do anything with a distressed owner/seller unless they have a ratified contract. How are you going to start an approval process with the lender when there is nothing to approve?"

Of course, he's representing the interests of sellers. I still say buyers should keep looking at other listings and withdraw their purchase offer if they find a better, easier deal.

And, finally, we have a comment about investing in bathroom upgrades in preparation for a sale.

Rolfe Pitts of Herndon is wrestling with the idea. "Your column was remarkably timely for our situation," he wrote. "Upon sale, you may only get back 81 percent of the investment in a basic bathroom remodeling. Let's say the cost is $15,000, so the seller recoups approximately $12,000 and is out $3,000. However, failure to remodel the bathroom may lead the prospective buyer, especially in the current atmosphere, to bid considerably more than $3,000 lower than the asking price. This would lead the seller to be out much more than the $3,000. Your thoughts?"

Well, that's exactly the dilemma, isn't it? And if we could be sure of getting back exactly 81 cents on the dollar, it would be much easier to decide. But there's no guarantee you will recover even that. Buyers are looking to spend as little as possible. If you're going to err, it might as well be on the side of spending too little rather than too much.

E-mail Elizabeth Razzi atrazzie@washpost.com.