When Monica and Alex Mindt decided to leave sunny southern California and move to New York City six years ago, they were bursting with optimism.
Monica, a clinical neuropsychologist, was drawn to the Big Apple by the chance to teach at Fordham University and conduct research at Mount Sinai Medical School. Alex, a writer, planned to work toward a Master of Fine Arts degree at Columbia while polishing his first collection of short stories.
Looking back, the Mindts now admit they were a couple of babes in the woods. Make that a couple of babes in the asphalt jungle – in this case, their new home in New York: a Harlem building that gave fresh meaning to the words “condominium nightmare.”
Heaven Can Wait
The building, known as Lido Hall Condominium, looks innocent enough. It rises nine majestic stories above the intersection of Adam Clayton Powell Boulevard and West 110th Street, with sweeping southerly views of Central Park. The Mindts loved the neighborhood and the condo, and they found a one-bedroom apartment on the top floor for $260,000, a price they could afford. Everything looked good. But appearances, as these California transplants were about to learn, can be cruelly deceiving in the world of New York real estate.
The first red flag was raised at the closing in October 2002 when the new arrivals were surprised to learn that they would have to pay a $5,000 building-wide assessment up front before they could move in. They swallowed hard and paid the $5,000.
“Our lawyer warned us about buying into the building,” says Monica, 37, a petite, dark-haired woman with infectious energy. “She said it looked like the building was in distress – in bad financial condition. Our broker also said there might be problems, but if we got on the board we could fix them. So we, being naive, decided to go for it.”
There were, indeed, difficulties. “There were deep, systematic problems,” says Monica. “It was a logistical, legal, financial nightmare.” Because of ongoing complaints about shoddy maintenance, nearly half of the 35 units were in arrears. Seven of those were deemed “significant” by the condo’s attorney – ranging from $10,000 to $40,000 per unit.
“People were upset that these people weren’t paying their maintenance,” Mindt says. “There was bad morale in the building, we were hundreds of thousands of dollars in debt for water bills, legal costs, capital improvements. Plus, there was a lawsuit filed by a unit-owner on the first floor for repairs to her kitchen ceiling.”
As if all this weren’t bad enough, Mindt soon discovered that there were also serious defects in the building’s heating, plumbing, and elevator systems; the super lived off-site and was frequently hard to reach; and the manager was simply deemed incompetent.
And so, remembering her broker’s advice, Monica Mindt decided that the best way to fix the mess would be to get on the building’s board of directors. A month after moving in, she attended her first annual meeting of the building’s board – and, to her surprise, found herself elected president. No longer a babe in the woods, she rolled up her sleeves and got busy.
“One of my highest priorities was to get the cash flow straightened out,” she says. “Raising maintenance was one of the first things the board did when I became president. The maintenance when we moved in did not cover operating costs. It was too low.”
Even before they could pursue the money owed by the units in arrears, though, the three-member board needed to deal with the disgruntled woman on the first floor. Mindt hired a contractor and the work on the kitchen ceiling was completed in May 2003 – at which point the unit-owner showed her gratitude by suing for damages. The board counter-sued for unpaid maintenance.
Now the focus shifted. The board simply didn’t have the money to pay an attorney to go after all the residents who were in arrears. Bruce Cholst, the condo’s lawyer since 2001, recommended that the board contact Steven Einig, an attorney with more than 20 years of experience in foreclosures, to go after the seven units in significant arrears. But since there was no money to pay Einig on a conventional hourly basis, Cholst came up with a novel approach.
“We asked [Einig] if he’d consider handling the work on a contingency basis, on a leap-frog basis,” Cholst says, “using the proceeds from each foreclosure to pursue the next one.”
“Here,” recalls Einig, “they were asking me to do something unusual, something I’d never done before. They asked me to take the work on a contingency basis, the way a lot of personal-injury lawyers do. The board was very reasonable and they were willing to pay court costs.”
They were also willing to pay Einig one-third of any money he recovered, which is about what personal injury lawyers get. Einig, a 50-year-old native New Yorker, was intrigued. He frequently jogged through Central Park, and for years he had watched the revitalization of Harlem’s housing stock with great interest. Now he had a chance to play a small role in that rebirth.
After doing his due diligence and deciding he had a high likelihood of success, Einig took the unusual step of agreeing to work for Lido Hall on contingency. But he was not operating under any illusions that it was going to be a stroll in the park. Because of spotty record-keeping by past managers, there was a “less than clear history” of the units that were in arrears, he says. He was fully aware that he was getting himself into “a real mess.”
But he had a plan, and just as important, he had a resolute board backing him up. “They were willing to put up the initial court costs, and they didn’t quibble about the percentage I was going to receive,” Einig says. “It’s nice to be able to work with people who make decisions and move forward. They didn’t second-guess themselves. They were accessible, and they stuck with the plan. Indecision is the worst thing.”
The owners who were in arrears ran the gamut, from a lawyer to a senior citizen on a fixed income. When Einig sat down with them, he knew what he wanted. “The goal was to get people to pay not to foreclose on units,” Einig says. “The condo’s board enforced its right to collect the higher amounts of interest on money that hadn’t been paid – what’s known as ‘default rate.’ I held everyone’s feet to the fire and convinced them that it was in their interest to settle now. Some paid up front, some went on payment schedules. Every one of those cases resulted in a workout by the end of 2005.” (One owner, who spent the bulk of his time living overseas, decided to sell his apartment at market value.)
Though delighted with the way things played out, Einig has not taken on any more foreclosure work on a contingency basis. “It was a unique opportunity,” he says of what happened at Lido Hall. “All the stars were in alignment. I have very fond memories of the whole experience.”
Sue You, Sue Me
While Einig was fighting his rear-guard action, Mindt and her two fellow board members had their hands full with the building’s many other problems. The biggest, of course, was the litigious tenant on the first floor. But there were others.
Shortly after her election as president, Mindt, who was then pregnant with her first child, got the board working on a three-pronged plan to pay off the building’s debts, create a reserve fund, and do some long-range financial planning.
The first step, as mentioned, was to raise the artificially low maintenance. A monthly assessment was also levied, running from 2003 to 2005. Then, a number of cost-cutting measures were instituted: doorman shifts were reduced from two to one per day; the laundry in the basement was renovated; water leaks were stopped. A long-term elevator upgrade was begun, under direct supervision of the building’s super to ensure that the work was done properly.
There was surprisingly little squawking about the new charges. “People knew ahead of time [about the maintenance increase and assessments],” says Mindt. “We approached it from the point of fiscal responsibility. Also, we took a proactive approach to maintaining the building so that we didn’t have all these emergency repairs all the time.”
Finally, in October 2007, the lawsuit with the woman on the first floor was settled when she agreed to pay $120,000 to cover her arrears. With that settlement, Lido Hall’s long recovery was finally complete.
“I think the building turned around as we resolved the bloc of foreclosures prior to that settlement,” says Mindt. “It was a series of watershed moments, slowly building financial solvency for the building. However, resolving the legal issue was emblematic of finally being done with the old problems this building had faced.”
Eventually, the board got around to hiring reliable professionals, including the accountant Stephen Beer and, in the spring of 2007, the manager Jim Maistre, who has since formed Veritas Property Management. A new super was hired in January of this year. Cholst remained as the building’s attorney.
“It was a bad situation – the arrears, the foreclosures, the legal battle,” recalls Maistre. “You have to give a lot of credit to Monica Mindt and [former board treasurer] John Bishop. He was a finance man so he knew his numbers. There’s a lot more control in the building now.”
Cholst agrees. “The building was in dire straits,” he says. “Now the board knows much more about what they’re doing. They control the staff and the expenditures a lot better. The building is operating much more as a community. I attribute a lot of that to Monica Mindt and her conciliatory approach. The moral of this story is that all it takes is one cohesive leader who can marshal all the resources. I think that’s what this turnaround was all about.”
Je Ne Regrette Rien
Monica and Alex Mindt, much like the French chanteuse Edith Piaf, don’t regret a thing. “I wouldn’t do anything differently,” Monica says. “We were young and willing to take a risk, but things have finally turned around. Our reserve fund is over $200,000. We’re operating in the black. The headaches are behind us. I feel like I’ve gotten degrees in business, law, and real estate management. I had to roll up my sleeves and just do it. I think part of being a good board president is you have to communicate with the residents – but it’s even more important to be able to make hard decisions. There’s no way around that.”
There have been sizable rewards to offset the many headaches. Since moving into Lido Hall, the Mindts have had two children. They’ve moved down the hall from their original one-bedroom apartment into a much roomier three-bedroom – with stunning views of Central Park. Along the way, Alex earned his M.F.A. degree from Columbia and saw every writer’s dream come true: his first collection of short stories, Male of the Species, was published last year to glowing reviews. Publishers Weekly said it was “deft and beautifully composed.” The Atlantic Monthly called it “remarkable, memorable and artful.” Alex is now writer-in-residence at Purchase College, and he’s working on his first novel.
“Being in this building has really changed our lives for the better,” Monica says. “The place just has a very different vibe now. We love where we live. New York’s been good to us.”