At the recent Law Seminar of Community Associations Institute, over 500 attorneys from across the country met for two days to discuss a wide variety of issues, especially the economic conditions facing associations. Here is a list of techniques that are being used by associations to address increasing delinquencies and foreclosures:
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- Budget for bad debt.
- Sell bad debt to a third party. If you would like more information on this, contact Loura Sanchez at 303.432.9999 or send an email to [email protected].
- Increase fines for not maintaining property, especially for covenant violations by lender owners.
- Speed up the collection process, especially for delinquent lender owners.
- Take advantage of blight laws that some cities have adopted.
- Seek alternative funding grants for community projects. A few are:
- Institute cost saving options and charge for certain uses. For example, decreasing the hours that pools are open or instituting rental fees for utilization of clubhouses. However, before taking such action, be sure the governing documents of your association don’t prohibit the action you are contemplating.
- File bankruptcy to facilitate approval of contract renegotiations, special assessments, and governing document amendments if crucial for financial viability of your association.
- Facilitate the creation of a fund for owner/investors to purchase foreclosed units.