The Vale in Tempe is in TROUBLE

With so many condo owners going into default on their mortgages, Home Owner Associations (HOA’s) are having a real problem with fee delinquencies. 

The Vale in Tempe

The Vale in Tempe

In other words if folks aren’t paying their mortgage payments you can bet they aren’t paying their HOA fees.  In the past this simply meant that we agents had to review the HOA financials to make sure that it was making enough each month to pay its bills.  Well, things are getting so bad that some mortgage lenders are now reviewing the HOA financials and if they don’t meet the grade then the lender won’t loan money for a buyer to buy in that community!

We recently helped a very qualified man in the purchase of a bank owned condo at The Vale.  It’s a great place (needs a little TLC) and we got it at a smokin’ price.  We were ready to close this week when in the 11th hour our lender, GMAC Mortgage (a big company), said that it wouldn’t do the loan.  Turns out that 24% of the condo owners at The Vale are late in paying their HOA dues (meaning they ain’t gonna pay their dues at all) to the tune of almost $39,000 or 33% of the entire 2009 approved operating budget.

OK, big deal, so the HOA is behind $39,000 units; in a community of 50 condos that’s less than $1,000 per condo, it sucks but it’s shouldn’t be a deal breaker, right?  Here’s the bigger problem.  If 24% of the condo owners haven’t paid their HOA fees it stands to reason that most of them probably aren’t paying their mortgages.  So, maybe as many as one out of every four condos is about to go into foreclosure.  Sounds like a buying opportunity right?  The more bank owned properties the more downward pressure on prices.  BUT NO BUYER WILL BE ABLE TO GET A LOAN BECAUSE OF THE SORRY STATE OF THE HOA.  If no one can buy, prices will probably continue down until a solution is found.

As much as we love the floor plans and location of The Vale we’re placing this condo community on our “watch” list.

About the author

Will Daly Will Daly has specialized in selling and leasing high rise condos and other urban property since 1997... before urban was "in" in Phoenix. His company, We Know Urban Realty has helped more urban buyers, sellers, renters and landlords than any other real estate office in Phoenix. Connect with . If you are ready to talk to an agent about the Urban Lifestyle Click Here

6 thoughts on “The Vale in Tempe is in TROUBLE
Tempe Resident

The Vale is actually a great place to live as far as location and the inside has modern appliances and such.
Tempe Res
1104 w. 12th place tempe az

Will Daly

Brandon – I am beginning to question the quality of construction as well. Have you seen the condition of the concrete steps. Many are cracked. I have seen thirty year old apartment buildings with the same type of steps and zero cracks. And after reading your comment I noticed the wavy stucco on the west side of the building. I’m not an engineer, architect or contractor but to my untrained eye things don’t look right. Hopefully we are both wrong as The Vale is a very cool building, with great floor plans and a fantastic location. BTW one might think its lame of me to point out cracked steps but I always wonder if the little things aren’t done right what else might be wrong!

brandon adamson

One thing I noticed about the Vale while driving by one day, is some warping on the outside of the building. I’m a big fan of modern architecture, but it’s worth noting that perhaps the unconventional(for Phoenix) materials these structures were built with may not hold up well in the heat over the long term. These were only built a few years ago, and already show some signs of wear. They’re beautiful for sure, but not quite sure of how robust they are.

John

good info!

tim

Generally speaking, do HOA’s go after owners personally (IE suit or credit reporting) for unpaid dues?

    Will Daly
    Will Daly

    Great question. The answer is that it depends on the HOA. I don’t know what the policy is at The Vale. Regardless of the policy however, it is my guess that the HOA will have a very hard time recovering that money. After all, the most they can really do is get a judgement which will be reflected on the defaulting parties credit. But since the credit is trashed anyway due to foreclosure does the threat of a judgement really get any attention or motivate the defaulting party to pay?

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