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| Marina City Club, deferred maintenance, no reserve funds, Marina del Rey, Los Angeles, California, Mary Cummins, real estate appraiser, real estate appraisal, loan, mortgage, can't get a home loan, this is my photo of the project. |
Ever since the Surfside condo collapse in Miami, Florida everyone is worried about the condition of older condos. Condos near the ocean deteriorate faster than condos away from the ocean because of the salt air, low lying areas, soil and possible water intrusion. One condo project which is mentioned frequently in regard to this issue in Los Angeles, California is the Marina City Club in Marina del Rey, California.
The Marina City Club Towers were first built around 1976 to 1978. They are composed of three main towers and a few other surrounding units which front the boat docks. There are about 600 units. They were converted to condos in 1986 because of rent control and other factors. These were good quality units with tennis courts, a gym, hair salon, restaurant, pools, rec rooms... They're located on Los Angeles County owned leased land fronting the boat docks. The land is filled land.
The project is now about 50 years old. All condominium home owners associations HOAs must maintain proper reserve funds to repair and replace the components of the building over time. For example, if a water boiler lasts 30 years, the HOA must save 1/30th the cost of a new water boiler every year from HOA fees so they have enough money to replace it at the end of 30 years. The same goes with all major components of the building.
After the Surfrider condo collapse the owners and tenants of the Marina City Club condos became worried that their building could collapse and they could die. They started talking about the deferred maintenance they've noticed in the project. This caused people to revisit many recent articles about the project's lack of reserve funds for needed repairs. Los Angeles County became involved because they own the land on which the project was built. Part of the land lease states the project must be maintained properly and in a safe manner. Condo owners pay a HOA fee and a land lease fee for each unit. The fees are about $1,000/month for HOA fees and $700/month for the land lease. There's an extra fee to use the other club facilities which can run $700/month. This is all before you pay the mortgage.
In order to buy a home you generally put 20% down and finance the rest through the bank. A bank will only finance a property with a 30 year mortgage if they think it will last another 30 years. A bank will only finance a condo if there are no major repairs needed and there are sufficient reserve funds, i.e. 70%+ to pay for all repairs projected. If a project only has about 8% or they need $50,000,000 to fund their reserves, this is where you have a problem with the project. This is especially so when remaining life on the major components is zero years. It's now deferred maintenance. Any sane bank after reviewing facts about the project would reject it. You'd have to pay cash for the property. Property value could go lower based on the needed repairs and reserve issues.
I am not sharing any private information about the property which I obtained through any appraisals I've ever done in the project. All of this is public knowledge or came from friends who live in the building. If you are thinking of buying a condo here, PLEASE, get a copy of the HOA budget which lists needed repairs and reserve amounts. They must give it to you. Read the "Reserve Study Executive Summary" made by the HOA Essex Marina City Club LP.
Currently the condo owners can't and won't agree to a large special assessment. Most of these condo owners are older 75+. They're now on fixed incomes. They probably thought they wouldn't be around by the time the building needed the repairs. That time is unfortunately now.
*Just for clarification I'm not saying I think the building will collapse. I am saying that it appears based on public documents to have deferred maintenance with insufficient reserve funds to make the repairs.
I've been a real estate appraiser since 1983 which is 40 years now. I've appraised the Marina City Club Towers many times since it was built 1970-1978 and later converted to condos. I've visited my friends there many times even when it was first apartments before they converted to condos. I've been in the building a few times within the last year. My friends who own units in the building gave me a copy of a more recent budget. Below are a few public articles and documents.
"Los Angeles County ordered the structural engineering study last summer after residents voiced concern about public safety at the 10-acre complex of 600 condominiums in three, 16-story towers and a three-story, 101-unit apartment building.
The Marina City Club includes swimming pools, tennis courts, boat slips, restaurants, a fitness center and offices on land owned by the county. Deferred maintenance at the aging complex was estimated last year to require between $80 million and $140 million in repairs.
The new engineering study found cracks in walls and cement, signs of water intrusion in parking garages, “spalling” and crumbling concrete, as well as water-damaged rooftop decks.
Cement fastenings to handrails along walkways and on private balconies also were deteriorated, creating a safety hazard, the report said.
But the report by Saiful Bouquet Structural Engineers of Pasadena found no danger of imminent collapse.
“No significant structural damage was observed,” the 14-page engineering report concluded. “It is our opinion that the majority of damages observed were a result of normal wear and tear of the structure and/or moisture/water intrusion in the building envelope.”
It recommended Marina City Club operator Essex Property Trust, a publicly traded apartment firm, make the needed repairs to the three 16-story condo towers, parking structures and apartments."
Public References but not complete list
Marina City Club - Tennis, spa, sauna, gym, restaurant, hair salon
https://www.marinacityclub.net/
Marina City Club condo docs- Ground lease, Bylaws, CC&Rs, Condo sublease,
http://www.marinacityclub.com/httpdocs/DLLinks.htm
Full legal description, APNs, plat maps, building plans, unit layouts. Subject has no specific APN.
http://www.marinacityclub.com/Documents/CondoPlan1987.pdf
Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.
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