Condo Association Management Blog

Your association is in trouble to say the least; apparently your Board hasn't abided by FL law to maintain a fully funded budget nor have they funded their reserves properly. I would suggest a "tough love" approach to your owners, it's not going to be pretty or comfortable. 
First, get your lawyer to send demand letters to your owners that are in arrears. Everyone will tell you they have no money but THEY need to own up to there responsibilities, let them get loans if needed, NOT THE BOARD, stay away from any loan if you're in financial trouble! Secondly, seek a professional management company to set up a budget and fund reserves, this is why you have all those "special assessments", because the budget and reserves are not adequate. The numbers will speak for themselves and you MUST let the chips fall where they may, I can almost guarantee an increase in your monthly payments and/or however you chose to fund you reserves, (perhaps quarterly). 
As far as your county issues are concerned, talk with your lawyer, if your association doesn't have one, GET ONE NOW!

The condo delinquency is a major problem with limited options with the financial impact on the housing market. Florida real estate has been hard hit, especially condos. There is no easy fix and many of the owners probably could not qualify for any bank loan.  
A management company while normally a wise investment may not be the best recourse at this time. In some legal decisions, courts have found that mgmt is a luxury. The leadership should recruit any members willing to assist during this crisis. An attorney and the CPA are necessities in providing guidance at this time. Your condo members efforts need to be in finding solutions, working together, supporting the board's effort to address the crisis, and seek solutions, not finger pointing.  
A budget developed in the fall of 2009 possibly was well-planned if all owners paid their assessments in 2010. One=third of the owners being delinquent has a dramatic impact on the condo income. The other members will have to carry the burden for the time. In some states, condos have had to consider bankruptcy filing. The condo working with an attorney must work with the County on their mandated repairs and determine a schedule that is possible for the most safety related issues.  
This is the same challenge that condos - especially older condos, or condos with many people on fixed income - are facing throughout the country.  
The board must keep all owners informed every step of the way during the process of resolving this issue. Several of my clients here in the Maryland area are facing these problems. There are no easy quick solutions.  

We were in a similar situation. When the current board took over there was $100 in the bank and we owed lawyers over $10,000-their fee from trying to collect past due amounts. Here is what we did- 
 
1. Fire the lawyers, make a payment plan, we got them to reduce the debt too. (by $3,000) 
 
 
 
2. Fire the management co. and hired the cheapest management co. we could find. All we let them do was collect the dues, and pay out bills that we approved. 
 
3. Had a meeting and showed everyone the books. We explained all that was happening, all we would like to do. What they could do to help. 
 
4.We then stopped watering the grass and bushes. Had the lawn mowed only when necessary. Owners went out and trimmed bushes and pulled weeds. Owners cleaned hallways and club house too. ALL WAS DONE BY VOLUNTEERS-NO MONEY OR CREDIT GIVEN. Some people were too elderly to work, so they turned down their air/heat and tried to use less electiricty. (Of course some people did nothing) That didn't stop the rest of us. 
 
5. We still have 5 people in arrears, most have filled bankrupcty so we will never collect anything from them. 
 
6. THE GOOD NEWS-We now have $32,000 in the bank. we had money for some major and minor repairs that had to be done. All others will wait! We are going after peoople for past due amounts once again. Using diff. methods-collection agency.  
 
 
 
Try some of these things. They will work for you too. 
 
s

All of the advice here is appropriate. There are no quick fixes or easy solutions. You are in a real mess right now and it will take a while to clean up. However, just like Donna said, with good consistent effort, it will get better. 
 
The place to start is with the delinquencies. Hire a collection agent who speciailzes in this area of Condominium Collection and have them go after those who are not paying. The cost of this should be minimal for the association because the debtor should be able to bear all of the expenses. Once you start receiving money from those who have not paid previously, you will notice that the attitude of the community will start to shift for the better. Suddenly, everyone's not as pesimistic on the future as they used to be because they see their neighbor's holding up their end of the bargain. 
 
Darron Hay 
 
Assessment Recovery