Redmond, WA Condo Association Votes to Mass Default

80+ proud owners in the Riverwalk at Redmond Washington condo complex have had enough and are ready to bail, en masse.

I received news of this event from Matthew who writes …

Hi Mish

I am good friends with an owner in the Riverwalk at Redmond condo complex and I also used to rent there, which is how I got wind of this story.

It turns out the developer sold out the complex, dissolved his LLC, and is living somewhere in the Caribbean. Meanwhile, unit owners are in the hole by as much as 50% of their purchase price, not counting needed repairs of as much as $50,000 per unit.

There are major defects that require about $4.1 million in renovation work to address underlying ‘envelope’ issues that cause leaks and mold issues in 11 units. The consultants said the exterior on the entire complex had to be replaced.

The home owners association (HOA) discussed five alternatives.

1) Sue the developer. Since the developer left the country so there’s no one to sue.

2) Pay the $4.1 million maintenance with a loan. However, no bank will issue a loan because the HOA fund has a high delinquency rate and not everyone is paying their dues nor are they paying on time.

3) Make each home owner pay approximately $45,000. Who would be willing to do that when everyone’s mortgage is seriously underwater?

4) Liquidate the entire complex, forcing everyone into foreclosure.

5) Opt for Band-Aid fixes. Go into each unit, rip it apart and fix the problem. However, the consultants have said that the damages will eventually spread to all units because the problem is structural. The HOA has gone this route in the past but the problems in 11 units keep coming back.

Unwarranted Hope and Begging the Mayor for Help

In a followup email Matthew writes “As of the last HOA meeting they’ve narrowed it down to option 4 and a new option… beg the local government for help