R
esidents at Orchard Corners Condominiums in Bountiful, Utah, have been shocked by a proposed massive increase in homeowners association (HOA) fees. The monthly payments could more than double to over $800 for some homeowners, who were informed that rising insurance costs are largely responsible for the hike.

    According to an HOA notice, increased labor, supply, and utility costs, as well as a significant jump in insurance premiums from $17,000 to $108,000, have created financial challenges that require immediate attention. Panicked residents are now worried about how they will cover the additional expenses.

    For Emily Horne, who bought her condo almost four years ago with her husband Douglas, the proposed increase is particularly daunting. They currently pay $385 a month in HOA fees and would be facing an 800% increase if the new rate is implemented. The couple feels stuck, as they cannot afford to sell their home due to the high HOA costs.

    The insurance policy for the condo community was recently canceled after one of the units caught fire and needed repairs. Residents are frustrated that they must pay for the damages caused by a single incident. As an alternative to the $800 monthly payment, the HOA board has suggested a smaller 17% increase in fees plus a $3,000 lump sum payment.

    The situation highlights an expanding real estate crisis, with insurance costs skyrocketing across the country due to natural disasters and insurers fleeing high-risk areas. Utah saw homeowners insurance rates rise by 20 percent last year, according to S&P Global. In Florida, rising HOA fees and insurance costs, devastating natural disasters, and new regulations are pushing the real estate market into a downward spiral.

    Home sales in five major cities have plummeted amid the crisis, with Fort Lauderdale experiencing a 15.2% drop in pending home sales over the last year. Some condo owners are listing their properties for 40% cheaper than they're worth just to unload them. In Miami, residents of two condo buildings face a huge $21 million special assessment bill for repairs, leaving some individuals with payments of over $40,000.