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.
“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.”