The Meter is Running
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Collecting arrears from difficult residents can call for unusual methods.
AUTHORSimon Sarwa, Trillion Asset Management
PAGE #pp. 88-89
Boards might be tempted to write off debt from recalcitrant shareholders, but there’s usually a way to get what money you’re owed.
At a condominium we manage, we had a unit-owner who’d been in arrears since 2009. Once we brought it to the board’s attention, we realized we needed to move to different collection methods. We got the unit-owner signed with PayPal, but after we received one or two payments, they stopped. We tried to give the unit-owner time to pay, but payments were not being made.
We urged the board to put a lien on the apartment, which it did. When we learned that the unit-owner filed for bankruptcy and had moved to another state, we tried a short sale and we got two offers. They were rejected by the bank because of closing costs, broker fees, and outstanding arrears. We were able to get the brokers to clean up the apartment, so it was in decent enough shape to sell. I’m happy to say the apartment finally sold in May and we recovered all arrears, interest, and legal fees.
Basically, the board tried to write off this debt. I was opposed to that because, based on the market, it was just a matter of time before we collected the money. The lesson here is to cover all steps, be patient and creative. The idea is to find different ways to collect what’s owed you.