Multiple Units, Multiple Delinquents

Unfortunately, it happens to many Associations. One person or entity begins to buy up several properties for investment purposes, then the units begin to fall delinquent, one by one. What is the best course for the Association to take?

First, take note that when one unit falls delinquent, the others will soon follow suit. Make sure that you are strictly adhering to your collection policy, and not making any special accommodations just because this person owns multiple units. In fact, due to the fact that the person owns multiple units, the threat of delinquency poses a much greater threat to the Association than an owner of a single unit who falls delinquent. The impact on the Association’s bottom line is simply much greater because the Association depends on that person paying so much more. It is important to get liens in place quickly in case that unit owner files for bankruptcy, so that fees are not lost on multiple units.

Also, keep in mind the implications a delinquency might have on the rights to use the common areas and facilities. Most governing documents provide that an owner who is delinquent may have their rights to use such areas suspended. Does this extend to all units if one is delinquent? It depends on the wording of your governing documents. Most suspensions usually are linked directly to the delinquency of the particular unit, and not imputed upon all units.

More on Community Associations