TURNING AROUND A TROUBLED BUILDING, P.2

"They were willing to put up the initial court costs, and they didn't quibble about the percentage I was going to receive," Einig says. "It's nice to be able to work with people who make decisions and move forward. They didn't second-guess themselves. They were accessible, and they stuck with the plan. Indecision is the worst thing."

The owners who were in arrears ran the gamut, from a lawyer to a senior citizen on a fixed income. When Einig sat down with owners who were in arrears, the goal, he says, was to make them understand that without payment, the board would foreclose on their apartments. In addition, "The condo's board enforced its right to collect the higher amounts of interest on money that hadn't been paid — what's known as 'default rate.' I held everyone's feet to the fire and convinced them that it was in their interest to settle now. Some paid up front, some went on payment schedules. Every one of those cases resulted in a workout by the end of 2005." (One owner, who spent the bulk of his time living overseas, decided to sell his apartment at market value.)

Meanwhile, Mindt and her two fellow board members, including treasurer John Bishop, worked on a three-pronged plan to pay off the building's debts, create a reserve fund and do long-range financial planning. Aside from raising the artificially low maintenance, they levied a monthly assessment, running from 2003 to 2005. Then came a number of cost-cutting measures. Among them: Doorman shifts were reduced from two to one per day, and the laundry in the basement was renovated and water leaks stopped.

There was surprisingly little squawking. "People knew ahead of time [about the maintenance increase and assessments]," says Mindt. "We approached it from the point of fiscal responsibility. Also, we took a proactive approach to maintaining the building so that we didn't have all these emergency repairs all the time." This included a major elevator upgrade, done under direct supervision of the building's super to ensure that the work was done properly.
Finally, in October 2007, the lawsuit with the woman on the first floor was settled when she agreed to pay $120,000 to cover her arrears. With that settlement, Lido Hall's long recovery was finally complete. Eventually, the board got around to hiring reliable professionals, including accountant Stephen Beer and, in Spring 2007, manager Jim Maistre, who has since formed Veritas Property Management. A new super was hired in January 2008.

Cholst remained as the building's attorney. "The building was in dire straits," he says. "Now the board knows much more about what [it's] doing [and controls] the staff and the expenditures a lot better. The building is operating much more as a community. I attribute a lot of that to Monica Mindt and her conciliatory approach. The moral of this story is that all it takes is one cohesive leader who can marshal all the resources. I think that's what this turnaround was all about."

"I wouldn't do anything differently," Monica says. "We were young and willing to take a risk, but things have finally turned around. Our reserve fund is over $200,000. We're operating in the black. The headaches are behind us. I feel like I've gotten degrees in business, law, and real estate management. I had to roll up my sleeves and just do it. I think part of being a good board president is you have to communicate with the residents — but it's even more important to be able to make hard decisions. There's no way around that."

Adapted from Habitat April 2008. For the complete article and more, join our Archive >>