Rising liens, foreclosures, delinquencies, bad debt and budget shortfalls create concerns regarding cash flow for condominium owners, Board Members and Managers.
Furthermore, when owners default on their maintenance assessments, a domino effect takes place. The financial burden falls upon all of the owners to handle the building’s deficiencies. In some cases, the loss of income may create a situation where the condominium association cannot meet routine operating expenses. The impact of delinquencies of a smaller community is far more severe. An association with less than 100 units and even 5% of its members not paying their assessments can have a significant impact on the finances of the association. If planned capital improvement projects are subsequently placed on the back burner, the entire building’s financial and physical condition may suffer.
Associations may wish to expedite potential sale applications quickly and approve buyers in order to start obtaining funds. However, applications must be carefully reviewed for financial stability so that the desired level of amenities, services, professionally trained staff, and lifestyle are maintained. If services weaken, reputation suffers, and potential buyers may be reluctant to purchase into a condominium that has cut back on essential services.
It is essential that the Board of Directors work with their Manager to monitor the operating budget and carefully review monthly financials and to work together with the association attorney to manage the collection process. Fundamentally, Managers, at Atlantic | Pacific Management have the experience and proven track record to help ensure that associations maintain their financial integrity.
Marcy Kravit is a Licensed Community Association Manager at Atlantic | Pacific Management and has earned the PCAM designation from the Community Associations Institute. The company has offices located in Boca Raton and Bay Harbor Isles. Ms. Kravit can be reached at firstname.lastname@example.org. For more information about Atlantic | Pacific Management, call 305-867-2245 or visit apmanagement.net.