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Bill to reduce condo delinquency rates supported at hearing

When Kelly Riesner tried to sell her home in Montgomery Woods, she found out the Elkridge condo community has a 23 percent delinquency rate on its association dues, which meant anyone trying to buy in the community does not qualify for Federal Housing Administration financing.

"She cannot sell her home; it's that simple," her father Paul Riesner, who co-owns the unit with his daughter, told the County Council at a hearing Monday, April 16.

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Council member Calvin Ball, a Columbia Democrat, has sponsored legislation that would require county rental license holders to be up to date on their condo association or homeowners association dues.

The bill, co-sponsored by the council's other three Democrats, aims to help communities like Montgomery Woods reduce delinquency rates. Condo communities with a delinquency rate of more than 15 percent, are ineligible for FHA financing.

"Due to its low down payment, FHA financing is an important tool used by first-time home buyers," Howard County Association of Realtors President David Vane told the council.

High delinquency rates is a problem "numerous" condo association communities in Howard County are facing, he said. Without FHA financing options, sellers are forced to turn to cash buyers who "typically purchase below market rate, thus devaluing the community at large," Vane said.

He added: "The homeowners are probably unaware that not paying their condo dues is really clobbering their values, simply put. So for not paying a $150 or $200 monthly fee, they could see a 50 percent reduction in the value of their home."

Kelly Riesner said she contacted homeowners in Montgomery Woods last week and found "there is not an awareness out there about what this doing to the community."

Though homeowners associations are not affected by the FHA financing issue, at least one is supporting the bill as a way for it to collect dues needed to pay for community improvements.

"Our experience is rental homes are two or three times more likely to be delinquent," Dorsey's Hall Townhouse Association president David Isquith said.

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Columbia resident Jeanne Ketley, who serves as president of the Maryland Homeowners Association, called the bill "bold and forward thinking" but noted some concerns about its enforcement.

"Just from personal knowledge, there are lots of people out there who are renting their unit…and they haven't done the proper paperwork (to obtain a county renter's license)," she said. "You would have to identify those people somehow."

A work session on the bill is scheduled for April 24 at 4:30 p.m. and a vote on May 7 at 7:30 p.m. Both meetings will be held at the George Howard Building in Ellicott City.

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