The foundation of any properly run condo association or co-op building rests on residents paying their monthly maintenance fees on time and in full, with no delays or delinquencies. However, in the wake of the recession, with many shareholders and owners still on shaky financial ground, some co-ops and condos are feeling the pinch of late and/or missing maintenance payments. Many owners are also unable to cover the cost of special assessments to fund much-needed capital repair and improvement projects.
Hard Times vs. Hardball
Hilary Becker, CPM, owner/broker with Long Island-based Becker Real Estate Services, has seen the effect that non-payments of arrears has had on his buildings, and says that it’s a problem that has increased in recent years. “In general, most associations will provide residents with a 5-10 day grace period. After that, a late notice is sent with the appropriate penalty,” Becker says. “When someone falls on hard times, and falls behind, we normally try to work out a payment plan that the resident can live with, but it’s extremely management-intensive.”
Bruce A. Cholst, a partner with the Manhattan-based law firm of Rosen Livingston & Cholst LLP, says that most people aren’t looking to get away with anything, but just don’t have the cash flow to pay. Still, he has dealt with many reasons why people haven’t paid.
For instance, when money isn’t coming in, this sometimes leads to work not getting done, which has a trickle-down effect of others not wanting to pay in response to things in the building deteriorating.
“They may protest over apartment conditions or board policies and they think the way to influence the board or get the board’s attention is by withholding common charges,” Cholst says. “That’s not only inappropriate, but illegal.”