Almost any veteran property manager can tell tales of buildings that have fallen on rough times thanks to the economic meltdown of the last few years. Some have been beset by multiple unit foreclosures, others are dealing with defaulting sponsors, and more and more are struggling with budget shortfalls thanks to missing maintenance and common charge payments.
The recession has taken a devastating toll on the long-established and the newly-constructed alike—and the professionals who work with multifamily buildings are having to rise to the administrative challenges posed by these “distressed” communities.
To Ed Kalikow, president and CEO of Kaled Management Corporation in Westbury, the term “distressed” covers a broad range of situations. “For example,” he explains, “it could mean physical issues that the building doesn’t have enough dollars to fix—or it could be that the value of the building has dropped because residents aren’t paying their dues.”
According to Maryann Carro-Caputo of Tribor Management in Flushing, financial hardship hits different types of buildings in different ways, and with different ramifications depending on whether the community in question is a co-op or a condo.
If the problem is residents in arrears, “In co-ops, the impact is usually more manageable,” she says, “because the cooperative corporation has first position over the owner’s mortgage company and can easily take the owner to landlord/tenant court to settle the matter. In most cases, the owner’s mortgage company will step in and settle the outstanding balance. The sad part is that the shareholder may then face losing their apartment.”