Good news/bad news...

Norway_T

So we bought a condo 1.5 years ago. Right after we moved in we were told by the board that we would have to save 20  000 USD for a balcony rehabilitation project. We live on the 1st floor, and do not have a balcony buy law everyone in the building has to pay. 

I was very annoyed because we were not told this when we bought the condo.  I mean we did get a good price but I don't think we would have bought it if we would have known.

Fast forward a year and half yesterday we had our meeting to discuss the project.  I did not go, but sent the bf because it was just easier for him to deal with it (for language reasons, plus I know this was going to be a bitter meeting, because  a lot of people are in disagreement about the project). 

The one hour meeting lasted nearly four hours.    There were threats to kick people off the board, to move, ectera..

It resulted in that yes we have to pay for the balconies BUT we will get our own terrace. Currently we have a door from our bedroom to a huge common backyard.  If the proposed plan gets approved next spring we will have a little terrace out there connected to our door. 

This is good news, as I mean at least know the 20 000 we have to pay, will go towards something nice for our property and increases its value.

Will it increase our property by 20 000? I doubt it but it is better than nothing.


The devestating news is, I've only been out of grad school for a year and a half now, my boyfriend 6 months.   We have only about 12 000 in savings.  We are both planning on starting school in August 2010.  Our savings which we imagined to be around 20/25000, by the time we start were supposed to support us when we go back to school and pay for a wedding. After we pay for the balcony project we will have nothing.

Further, we do not want to sell our condo until after the project is done, which could take as much as a year and half from now!  We were hoping to sell this spring. It should be no problem to rent it out, and house prices in Norway are on the way up, so it's not so bad to hold on to it, it's more the fact that we won't have the money for a downpayment on a small house in the US when we move back.


I guess what annoys me most is that I've worked so hard to save since I started working full time a year and a half ago, and I am proud of my savings and planning.  I am really sad that all my savings are going to just disappear.

Button5807

I really wish I had something constructive to say but I'm literally stunned by how much that sucks.

PaigeMcC

I'm also trying to think of something to say but that really really really sucks! I can't believe that the people you bought from didn't tell you that - that does not qualify as full disclosure at all!

I'm sorry about your situation, hopefully you'll get a great price when the construction is done and this headache will be worth it

Norway_T

Yah, I considered getting a lawyer. They did disclose that there" might" be plans to build balconies in the future but the way we understood is that those that had balconies would have to pay not us.  What they failed to say is the balconies were in such bad condition that they had to be done and that plans were already in place to get them done and that it would cost us personally 20 000 USD.

But the God(s) must be telling me that it will work out because today I was told starting January 1st I will getting a raise. It's not huge, but it helps.

And to be fair, properties in Norway are expensive. We should be able to get some of the cost of the terrace back when we sell. Luckily we bought when the market was fairly low, and the market right now is higher, and continuing to go up.My bf and I got in a fight today that I need to see the more postive side of  things. That I should be at least happy we are getting a terrace.  Here's me being more positive.

Let that be a lesson to those who are buying through, there are often unexpected consequences of owning a home, whether it is repairs, or changes in the market or job losses. Make sure you are prepared for the worst.

notquiteblushing

Damn.  Okay I don't know the law over there but as a condo owner myself I have seen how boards try to pull the wool over unsuspecting new buyers and it sucks.  However definitely do not deplete your savings to pay for this project!!!  I would speak to a lawyer in your country and try to assess your rights in this situation.

If you do have to buy into this project, you should be definitely be able to find financing and the board should probably help you.  When a property my parents owned had a special assessment, the property manager just split the amount due by 36 and added that amount to their regular monthly dues and it was paid off in three years.

Also go back to your REA and ask him/her what the current comps are if you were to sell and also how much value a couryard could add just so you know.

Norway_T

Thanks for the advise. We have consulted  lawyers, and they say we have to pay.    I've even read news paper articles on how 'unfair' it is that 1st floor condos have to pay for balcony rehabilitation projects, but it is just the way the law is written, it's been chanllenged by people, but they have los and the law remains unchanged.

WE could very easily get a loan to pay for the costs.  But I am thinking that it is best to use our savings rather than a loan or a higher morgage. If we sold the property now, we would have to sell it for 20 000US less than its worth because of the project. (Other condo owners and our apartment, lowered their price by 20 000 exactly because of it)

Some of the money will come from our previously paid condos fee, but for some reason, the kind of ownership we have in Norway (there are several different kinds) means we cannot accumulate debt.  So we have to pay it all off now...gr..

notquiteblushing

So you can get a loan or you can't?  I'm confused.  I think if you can get a loan for at least half of the coat that will be a better option than depleting all of your savings.  What if one of you were to lose your job?  You said you are only in a contract position now, right?  I can't understand why the building needs all this money up front when the project won't be done for over a year.

Norway_T

We won't need to put down to the money until April when the building starts. Once it starts it can take up to six months. Things move slow in Europe.

We can get a bank loan but loan the money from our condo and pay it back through a condo fee. We might have to take a bank loan but I really don't want to have any more loans on top of our morgage and bf student loans. *(Plus any future study loans).

But you are right that it is important to have some savings in cash..thanks for the advice.  We will have to think about how we want to handle paying the fee.

babybchbum

This is outrageous for them to charge you individually 20,000 dollars when the terrace they build for you probably won't cost even half of that.

The fact that they did not disclose thsi information to you is crazy. I think I would be searching for some legal advice at this point

Ana_2985

It's actually not that crazy or uncommon.  I'm not a lawyer or a homeowner, but I've heard of this before. We stay at a condo owned by a family friend every summer and they just went through the same thing.  They had to pay $20,000 to replace all of the balconies even though they only had one.  Some condos had up to four, some didn't have any.  It's just part of living in that type of community, rather than a single home.

I agree with those who said not to deplete your savings.  You never know what else you may need money for.

Norway_T

Again, I already went to the lawyers. The fact that they disclosed that there might be a balcony project was enough.

IT was our ignorance in the law that we would be expected to pay for it. And there slyness in not sharing that there was definetly going to be a balcony project and it was already agree that we would have to pay 20 000. 

Was it a dirty trick? YES.  But ultimately you as a buyer our responsible for certain things. 

I was buying in a foreign country and in a language I was almost fluent in. I did my best to education myself in laws and questions to ask.  (We knew enough to ask if there were any projects planned in the future) but not enough to realise the implications of what they said.

A costly mistake yes.  BUT we did get our condo for a decent price, and the market is GOING up. The terrace will increase the value.  Well we loose in the end, probably.

BUT that is the risk you take as a homeowner.

I appreciate all the tips on not depleting my savings.  I think since we are going back to school, that you are right that I should not use savings to pay for it.

We are going to talk to the house lawyer again on all the alternatives for paying for the project.  Just to be clear.