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Boards have options when it comes to bringing residents back from being in arrears.
AUTHOREleni Magoulas, All Area Realty Services
Down in the hole. We recently took over an 82-unit HDFC co-op in Harlem where some 75% of shareholders hadn’t been paying maintenance because of COVID. The building was more than $100,000 in arrears and scrambling to cover operating costs. They were basically robbing Peter to pay Paul — paying one bill one month and not the next month so they could pay some other vendor or utility. The building also has one commercial tenant who hadn’t paid maintenance for several months, which was very problematic since the rent accounted for a significant portion of the co-op’s income.
Case by case. We sent out a notice to everyone in the building asking them to call us. Unfortunately, only a few reached out. So the property manager had a buildingwide meeting in the lobby to get to know the shareholders and make them feel comfortable going to her, which really helped. Starting with shareholders who owed the most money and working our way down, we gave people who called back information on rental assistance programs and helped them apply. We also created individual monthly payment schedules to help people catch up. It’s been a few months now, and we’ve been able to collect about 20% of the total arrears. We still have a long way to go, but at least we have a plan in place.
Exit strategy. If it comes to the point where people still can’t pay, we will work with the Urban Homesteading Assistance Board to help them sell their unit and find another residence they can afford. It takes time, and it can be tedious, but we don’t want to just go into litigation and have people lose their homes. Unfortunately, sometimes none of that works, and we do have to engage an attorney. But before it comes to that, there is never a reason to be aggressive or threatening. You want to treat everyone like human beings.