Coping with Arrears Finding Ways to Cure Delinquencies

 The foundation of any properly run co-op or condo building rests on residents  paying their monthly maintenance fees on time and in full, with no delays or  delinquencies. Unfortunately, because of the lingering effects of the Recession  causing job losses and financial uncertainty - especially here in South Florida  - many buildings and associations are feeling the pinch of late and/or missing  maintenance payments. Many owners are also unable to pay special assessments to  fund much-needed capital repair and improvement projects.  

 Still Struggling

 “For anybody new to delinquencies, these are probably people who are struggling  with a very tight economy,” says Melissa Nash, president of ARI, a full service receivables management  company and a licensed collection agency based in West Palm Beach. “They are finding that the cost of living is greatly increasing, whether it’s your gas going up or your groceries going up, your light bill, and I’m not talking discretionary income, I’m talking hardcore cost of living. In a lot of these cases, people are seeing  their income come down. A lot of people are struggling with the day-to-day cost  of living.”  

 Rachel E, Frydman, a managing member of The Frydman Law Group in Plantation,  says that most people aren’t looking to get away with anything, but just don’t have adequate cash flow to pay their bills. “The most common reasons I have heard for non-payment of monthly dues are loss of  job or illness,” she says. “My office does listen to all reasons, whether common or not, and try to work  with the owners within the parameters given to us by the client to try and get  them on a plan that will work for them.”  

 Time to Take Action

 While no one is looking to throw people out of their homes, boards and managers  can only let people slide by for just so long without taking action. According  to Frydman, too many boards react too slowly to arrears, and that causes even  more problems.  

 “I recommend that a board or association typically wait two months before  initiating collection procedures. This gives someone that chance to make up the  one missed payment with the next payment just in case they forgot or some other  reason,” says Frydman. “But after the 60-day mark, if not current the association should proceed with  collections. There should be a standard collection policy in place so that  everyone is treated equally, and at the same time allow the law firm to work  with the owners to get them on a reasonable payment plan.”  

Read More...

Related Articles

Pay Up!

All About Collections

Q&A: Maintenance Fee Fiasco

Maintenance Fee Fiasco

Q&A: When an Owner Falls Behind

Q&A: When an Owner Falls Behind