Tracking Monthly Charges — Automatically

Then the board's attorneys, Stark & Stark, arranged a meeting between the board and software designers from the Texas-based company Collectronics. There, Grant and his colleagues were introduced to a novel collections process: the Online Co-op and Condominium Tracking System (OCATS). Using electronic tracking from a secure website, the board members would have up-to-the-minute information on who was in arrears.

OCATS users go to the Collectronics website, enter a user name and password, and immediately access the whole history of their condo or co-op's collection process. The red-and-white OCATS screen opens up in a grid, where board members and management companies can enter the names and addresses of homeowners in arrears and find out where each debtor is in the collection process. The system saves time and money since board members no longer have to contact the attorneys to learn where a homeowner is in the collections process.

"A lot of legal fees are about communication with the attorneys," points out David J. Byrne, the Stark & Stark partner who spearheaded the meeting. If board members can go online and find information for themselves, they can get answers faster and for free. "It's a more productive and efficient system and it helps my staff manage cases better," he says.

The Seductive Mouse

For condo and co-op boards that use OCATS, the ease of retrieving information at the click of a mouse is seductive. The board has immediate access to a multiplicity of information: how much is owed by whom, how late the common charges are, how many warning letters have been sent, whether a lien has been filed or bankruptcy proceedings have started, thereby taking all the guesswork out of where the condo or co-op is in the collection process (i.e., "Jane Smith, XYZ Co-op. Sent two warning letters about late maintenance. Matter will be referred for further action in 30 days, with a lien to be filed.").

"Historically, you have to wait [until] the end of the month to get a report from attorneys and the management agent, which tells you what your total delinquencies are," explains Grant. "With OCATS, I can look at it and, if there is anything I need to address as board president, make a decision," he says, adding, "It's helped us manage the whole collection process better."

Not only has the board increased its productivity using OCATS, but it has been able to move more swiftly in recouping late common charges. Grant estimates that when he got on the board in early 2005, delinquencies amounted to 20 percent of the condo's overall budget. Today, that figure is down to 10 percent.

"It takes all the guesswork out of where you are with a case," notes the condo's managing agent Eliza Jacobs, regional manager for IMPAC Management. OCATS helps her stay in better control of the paperwork, she adds, and to track all the information going back and forth between the condo's attorneys and any given debtor.

Currently, Society Hill at University Heights has between 20 and 30 active collection accounts, a figure Grant predicts will almost double as the economy worsens. By using OCATS, board members know quickly which homeowners are late on their common charges, allowing the board to respond quickly to recoup that money. And the more quickly the board and its attorneys act, the better. Observes Byrne: "Every day a lawyer doesn't respond is a day that we don't have access to the assets."

Grant agrees. With the productivity gained in tracking arrears online, he and his fellow board members are tightening up the collection process, going after delinquent homeowners more quickly and aggressively. In the past, condominium owners late with their common charges could count on two letters from management before the third warning and a lien proceeding. Spurred on by OCATS, Grant says he is pushing for only one warning letter before the lien process is started.

With the economy doing badly, the situation could quickly get out of hand. Explains Grant: "We have to protect the rest of the homeowners."

Adapted from Habitat April 2009. For the complete article and more, join our Archive >>