The Nuclear Option Economic Woes Increase Foreclosures

 “We have 500 condo accounts and I can count on one or two hands the number of the  ones that are not having issues with arrears,” reports Karen Sackstein, CPA, whose accounting firm, The Condo Queens, is based  in Fair Lawn, New Jersey. “And that includes associations that have never, ever had a problem before, from  two-story brick apartment houses to $2 million townhouses.”  

 Tough Times

 Indeed, there may never be a more challenging time for condominium and  homeowners associations when it comes to collecting delinquent maintenance  charges. “I’ve been in the industry for 20 years,” says Sackstein, “and this is new.”  

 Just to cite one example: One of the larger condo communities in the state, Twin  Rivers in East Windsor, with 10,000+ residents, details in its monthly  newsletters the problems it is facing with arrears. In December 2010, board  president Scott Pohl reported that the community, while fiscally sound, was  $862,000 in arrears, and currently, foreclosures and arrearages are thankfully,  decreasing. The current financial report finds that Twin Rivers holds title to  two properties, 7 have paid their assessments in full, 44 stipulations of  settlement are current while 7 are delinquent; 32 properties have judgments in  progress; 49 properties are in various stages of foreclosure by banks or  mortgage lenders; 7 foreclosure actions have been commenced; 16 properties are  in bankruptcy; and another 5 are in pending court proceedings.  

 The reasons for the “why” are easy to explain. According to attorney Steven Chase, a partner with Kramer & Shapiro in Kew Gardens, Queens, “There are owners who have had a perfect record for 20 years and suddenly have  lost a job or had a medical issue and because of the economic climate have  fallen behind.”  

 It’s the “how” that is the problem—how to collect arrears from delinquent owners, especially those who, having  bought their property during the real estate boom, are underwater and ready to  give up on payments altogether.  

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3 Comments

  • I live in New York in a 9 unit condo. One of the units is going into foreclosure and is 6 months in arrears for common charges;. We have filed a lien. My question is two fold- How do we know when the bank takes ownership and at that time, would the bank then become responsible for the common charges? Thanks for your help./
  • Are banks or the attorney's that represent them required to notify condo associations in NJ that the bank is foreclosing on a unit in their building? We were in the process of working with a collection agency (prior to the bank began proceedings) and were about to serve the unit owner with papers that we were going to court. A lien had not been placed on the unit before the foreclosure process began.
  • what about HOA's hat are riping off owners of condo's or townhomes with ridiculous raises in the Maintian Fee's? what recosure do we have?? our mangagement and Board are greedy over the top rules and Regs jerks, what can we do about that?? We pay all our bills but get hit up with FINES regualrly for petty things and we have NO recourse but to pay...UNFAIR!