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I'm curious to know in other buildings how long you allow someone to be in arrears before you move to have them evicted? We have 3 Shareholders who for the past several years are ALWAYS in arrears. They owe as much as $4500 at a time and will make arrangements through our attorney to pay it off and pay for about 2-3 months and then stop paying again until we threaten to go legal on them.
My concern is because lenders are tightening up on finance regulations re: co-ops, how long should we allow this to continue? It has literally been going on since 2005 (and in some cases before then). How do we get these Shareholders to realize that enough is enough?
I will let the bank know. On one, I don't think they have a mortgage though. I think they bought all cash years ago. Thanks
when i bought, and later bought another better apartment and sold the first and i refinanced the second since the rates had dropped,
i have all the papers still and on every mortgage there was a clause concerning the above, subletting had to be also approved by the bank , plus a number of other riders, i also remember that banks would not give mortgages if the owner occupier ratio dropped below a certain rate, and if you had a mortgage the managing company was obligated to inform the bank that it was now under the ratio. in this coop they had a late fee but they raised it, and it was on the first late payment, basically pay the coop first,or pay a big late fee. do not let the phone of electric be higher than the co-op. Also make sure it is allowed in the bylaws and proprietary lease, or they can bring you to court and get the money back , and also probably have the coop pay all the legal fees, even for the lessee/shareholder lawyer.
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Many proprietary leases, bylaws or house rules have provisions for late payments. If not, try to get something added. Most credit cards charge a late payment fee each month, $20-$39 is not uncommon. You could also charge a flat % of the outstanding balance - 1% each month is within reason. Charge it after your grace period is over, if you have one. If you don't add that too.
Lastly, most mortgages require an Aztec Recognition Agreement to be completed by the condo/coop. That requires you to notify the mortgage holder (bank) that the unit is in arrears, usually once they are past 90 days, to allow them to intercede, to avoid loss of lease and their collateral interest in the property. They will then pursue the shareholder as well.
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