Coping With Arrears When Residents Fall Behind

 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.”  


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  • Can a condo withhold services from a homeowner that has refused to pay maintenance and common charges.
  • What are the steps to go through receivership with a tenant to pay of delinquent owner dues? My building has several owners in severe arrears but they all have tenants.