Foreclosures cost homeowners groups

If you live in a neighborhood that has a homeowners association, brace yourself.

Neighbors losing their homes to foreclosure and short sales not only are dragging down your property values, but also are setting you up for higher fees.

There's even a threat that your entire neighborhood could grow shabby over time, if cash runs short for upkeep.

Associations often lose six months of dues, sometimes more, from each homeowner who slides into foreclosure or short sale. Budget trouble can hit any community where homes are being lost, whether they're neighborhoods of detached houses or town houses, or condominium apartment buildings.

When some people don't pay, of course, the remaining neighbors must spend more to keep things running.

Trash still needs to be hauled; insurance bills need to be paid; grass needs to be mowed. For the time being, associations can try to trim expenses. Your board may look for cheaper insurance policies or management companies.

But it's almost irresistible for board members to cover some of today's budget shortfall by postponing expensive repairs and maintenance.

They're also more likely to starve the reserve account that all associations are supposed to maintain to cover inevitable, big-ticket repairs.