PR Log - Oct 27, 2011 - For a nation riddled with debt and foreclosures, there is a lesson of hope in how a small Michigan condominium association reduced its receivables ledger from $7,000 to $200 in three months.
The Villas at Stratford Place in East Lansing, MI, was foreclosed in 2008 by the financing bank when the developer failed. Those who had bought units saw the values of their homes drop by 50 percent overnight. With several owners reluctant to continue to pay their association dues, the bank’s attorneys sent demanding letters and filed liens. It was to no avail and member arrears continued to mount.
With the election of two individual unit owners to a board of three in June, 2011, effective control passed to the association members. The change was immediate. Future board meetings were opened to all and those in default were invited to discuss grievances personally. The association stopped usinge attorneys for debt collection and all communications with members were direct. Before the end of October, 2011, the outstanding balances had been cleared.
“It’s all a matter of communication,” says the new association president Richard Graham-Yooll. “When we showed members how we were improving services, cutting expenses and building reserves, the results were striking. Members paid their dues in arrears and now most are on autopay systems. It’s a win-win situation. With better cash flow, we are able to do more.”
In addition to general maintenance, the association, provides landscaping, lawn care, and snow plowing services, pays for insurance and city water and sewage, and has expanded the facilities of the spacious clubhouse with a fully equipped exercise room.
The new board established a neighborhood website, http://www.hamletcircle.com, to improve communications among members which also incidentally helped to advance sales.
With the last of the 16 units built before foreclosure soon to be sold, a successor developer will begin building more – at prices yet to be disclosed.
While not claiming that communication is the panacea for the nation’s real estate problems, Graham-Yooll believes the association’s story illustrates how ill-suited large financial institutions are to handling customer crises when they arise.
“If people received the same degree of personal advice and assistance when they fall behind on payments as they received when they purchased their home, we would see fewer failures." His association's story is a case in point, he says. - - -
This owners' association took over the management of the condominiums and common elements from a successor developer appointed by a bank after the original developer went into foreclosure. It has helped established an independent community that is now almost sold out.