Fast action required on delinquent fees
Q: We live in a 32-unit condominium. Eight of the units are vacant and in bank foreclosure. Another eight units are rented, some to prevent foreclosure due to the inability to sell.
Most of our residents are either unemployed or retirees living on fixed incomes. We have not had a sale for more than six years. Our property values have dropped to the point that many owners cannot sell because their mortgage is higher than the sales value.
We have discussed the possibility of selling the building to a developer. Are we better off to face the foreclosures and just wait out for a better future?
A: Why do you think a developer would pay more for your building with this market? We are in a poor real estate economy. We must lower our standard of living, cut expenses, and balance our budgets. We only see just past our front door, but in truth many associations are in the same situation.
Your objective is to get the delinquent units to start paying their fees as soon as possible. Until then, the other members must pay more to support the necessary expenses for the association. This may require legal guidance as well as professional management along with CPA financial guidance to begin this process. Your board must approve a collections policy without delay.
I have advised a fast collections policy that will involve liens filed after the unit is 60 days delinquent. I have even suggested that the association start foreclosure action even if the bank is foreclosing.
If the association has title to the property, they have powers to generate income or to force the banks to foreclose faster.
Not taking fast action will result in delayed collections or no collections of delinquent accounts.
Leader's action bad news for association
Q: An individual owner and the president of our association had the landscaper cut the mangroves to allow the owner a better view of the lake. They were unaware that they needed a specialist and a special permit.
A county inspector issued a stop order, a complaint and fine against the association, because our landscaper was not qualified and did not have insurance or proper licenses.
Is the association liable to pay the fine — especially when the work was not approved by the board of directors at a board meeting?
A: First, all vendor services and contractors must have proper liability, property and workers compensation insurance.
In addition, the vendor and contractor must have proper licenses. Failure to comply may result in serious financial expenses that will not be covered by the association's insurance and can place the association in a losing situation if an accident occurs.
The board of directors is responsible for all actions in the association.
In your situation, apparently the president acted without the approval of the other directors. Unfortunately that does not dismiss the other directors' responsibilities.
All directors must be more aware of the actions by the officers and committees.
Failure on their part is not an excuse and will not limit their responsibility and the association would be responsible for the payment of the fine.
Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.