Early this year, the Lynnhill in Prince George's County was the epitome of a failed condominium: the two high-rise buildings were physically deteriorated, Pepco was threatening t cut off the electricity in one building, delinquencies and foreclosures were at stunningly high levels, crime was rampant and owners were in no financial position to change much.
Lynnhill now is a different community. Not all of its problems have been solved, but the 219-unit complex has turned around remarkably in a short time.
The leaking roofs have been fixed, the burnt-out electrical system replaced, a new security system added, the grounds landscaped and the hallways painted and recarpeted. The pool opened this summer for the first time in years.
Owners are hoping their units will become marketable again soon, after being virtually unsalable for years.
The delinquency rate is still high at 14 percent, but is far better than the 80 percent peak last year and is expected to improve further. (A healthy condominium might have a delinquency rate of 1 to 3 percent, according to one condo management specialist.)
"If you look at where we were and where we are now, it's a complete turnaround," said Mitchell Campbell, president of the Lynnhill board of directors. "It's like the guy on the operating table that everyone says is dead, and now you find out he's still alive. In that sense, it's a complete turnaround."
Part of the community remains unhappy about the way the changes were made, however, and charges that much of the improvements is cosmetic, designed to help people sell and get out quickly.But these people also generally agree that conditions at the moderate-income complex are substantially better than they were.
Lynnhill's story is significant because area condominium experts expect to see a number of similar projects follow the path it had taken downhill. Those projects are ones that, like the Lynnhill, were among the earliest conversions of rental buildings that were sold to moderate-income people, most of whom had not previously owned a home. As these projects have grown older, many condo boards have forestalled fee increases and delayed necessary repairs and maintenance -- and are about to pay the price in overwhelming problems, such as the Lynnhill had at the beginning of this year, experts have predicted.
It's the same principle as if the owner of a single-family house continually put off fixing a leaky roof until damage was done to the basic structure. The costs prove much greater in the end, and if the homeowner hasn't saved up for major repairs, this can mean financial disaster.
The Lynnhill, converted in 1974, reached this crisis stage last year. And the community was convulsed as factions debated how to deal with what seemed like an imposible situation.
The condominium's board approved a large emergency assessment and started to crack down on owners who were delinquent in their condo fee payments. The huge increased and a series of foreclosures sent tremors through the community. Some homeowners were concerned that many would be unable to meet the new obligations. But, despite some vocal dissent and challenges, the board's plan prevailed, and a crash rehabilitation program was started in May.
Six months later, the difficult process of turning the Lynnhill back into a livable, salable complex is near completion, but it has not transpired without pain.
The emergency assessment increased maintainance fees by more than 50 percent, putting condo fee payments higher than most Lynnhill mortgage payments. About 40 units are owned by lenders now -- taken over from persons who had been long delinquent on their condominium fees. And a few more units are in the process of being foreclosed.
The foreclosures wiped past debts off the condominium's books without being paid, but put its association on better financial footing for the future. While the lenders hold the units, they pay the condo fees, so hard-core delinquent accounts were turned into reliable ones. The lenders will try to sell the units as soon as possible to qualified buyers.
While the crackdown on delinquencies and the physical improvements were welcomed by most in the community, some say the fee increase was brutal on a number of owners and that changes could have been made more slowly.
"We're happy to see that a lot of things have been done,... but I think [the improved condition] could have been arrived at without such hardship for the community," said JoElaine Anderson, a newly elected member of the condo board.
"You can do a lot of cosmetic repairs. But if you don't educate people, you are going to be right back where you started from," Anderson added. She and others in the community had proposed a budget that would have spread the work out over a longer period of time to avoid the large condo fee hikes this year.
Anderson and others also charge that some of the work was poor quality. They point to a problem with the carpeting, which was put down without padding. Another $8,000 worth of carpeting will have to be put over it. Also, the old security system was torn out and no one knows who took it, so an entirely new system had to be installed, they said.
Condo president Campbell denies that the rehabilitation is cosmetic, saying that engineering studies are being done on the roofs and that all the plumbing and wiring has been fixed.
"Thank God all they can say now is they don't like the carpet," Campbell commented about the discontented owners. "That's progress."
Other tangible forms of progress have been made in the condo association's financial situation and its marketability.
While the association's reserve fund is not fully funded yet, it should be near the 100 percent level by the end of the year, said Douglas McAlpine, a representative of Community Management Corp., Lynnhill's management company. The emergency assessment is due to terminate at the end of the year, as well.
Fire insurance at full replacement costs, a primary element in protecting the association financially in the future, came through two weeks, ago, McAlpine said. In the spring, the association had been unable to get the insurance because of a series of fires at the complex, he said.
Perhaps most important, the condominium is hoping to get back its secondary mortgage market approval from the Federal National Mortgage Association (Fannie Mae) before the end of the year. Fannie Mae will not buy mortgages on properties with major structural defects or that pose a high financial risk. Lenders generally will not make mortgages unless they can sell them in the secondary markets, so Fannie Mae approval of the complex is considered the key to making the Lynnhill salable again.
Looking to the future, the association still needs to work on communication and recreation, as well as on changing attitudes and behavior, Campbell said. This includes getting people to stop hanging clothes and newspapers on balconies and finding activities for children and teen-agers so they don't play in the hallways in the winter. Parking regulations need to be enforced so people visiting the local hangout don't go in and out of the Lynnhill, he said.
"It's the comfort quotient," Campbell said. "It's knowing that you don't have to worry about having to step over a drunk when you come in the door."
New condo board member Anderson said a full-time, on-site manager should be a priority at the Lynnhill, so that regulations can be enforced and vandalism prevented. The large number of renters in the complex makes keeping the place up more difficult, and no method of dealing with this problem has been found, she said.
While Campbell and Anderson disagree on other aspects of the Lynnhill's management, they both agree that the complex's future success depends largely on the extent to which homeowners become actively involved in the community.A number of committees are being formed to divide planning and decision-making functions among residents. Both Anderson and Campbell say that participation on these committees is a must if the Lynnhill is to get back on its feet completely.
Apathy, one of the most serious condominium problems nationwide, was one of the major culprits in getting the Lynnhill into a mess in the first place, most of those involved at the condo contend.
"Before [the crisis], there was a general condition of apathy. The community didn't look good or feel good," said Judith Wolfe, vice president of Community Management Corp. "People had to be shocked -- and they were when the budget tripled."
But that shock and the past year of turmoil may have strengthened the community as a whole, some residents say.
"I don't think we will see that [apathy] again. We have that concern, we have that interest," Campbell said. "This year was an education for many of us."