Miami Judge Gives Struggling Condo Associations New Tool In Battle Against Rent-Skimming Unit Owners Delinquent On Maintenance Fees

In Opa Locka, Florida, the Miami Daily Business Review reports:

• Ebenezer Boakyee’s condo board should be collecting nearly $11,000 in maintenance fees every month. Instead, it barely banks $3,000 because many of the units are owned by investors who have stopped paying their association fees. Because of the short-fall, Opa-locka’s The Oaks at Miami Gardens condo association is struggling to survive even as absentee unit owners collect rent from tenants.

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• Last month, The Oaks board finally got some help when a judge appointed a receiver to collectively go after the rent of tenants whose landlords have stopped paying maintenance fees. The receiver’s job is limited to collecting rent on behalf of the association; he or she can only go after rent on units the condo has begun foreclosure action against over the owner’s failure to pay condo fees. Condo boards have always had the option to ask courts to appoint receivers, but previously, each unit was dealt with as a separate case.

• For already financially distressed boards, that was a costly and time-consuming option. By combining cases, Miami-Dade Circuit Judge Ellen Leesfield has made the process more cost-effective. So far, court-appointed receiver Seth Heller has nine units for rent collection at The Oaks. That number will grow as the association initiates foreclosure actions on other units, he said.

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• When Judge Leesfield appointed the receiver on March 24 to collect rent from nine tenants in units the board is seeking foreclosure against, she gave boards an important new tool to boost the collection process. “That’s the brilliance and the beauty of this [approach;] it is really, really revolutionary,” said Mitchell Drimmer, whose company, Miami’s Association Financial, handles collections for The Oaks. Drimmer helped the board petition for the receiver. Receiver Heller said he charges $25 a month for each unit, but bills the unit owner, not the association. Lawyers who work with condo associations welcome Leesfield’s ruling.

• “That’s new; that’s something I haven’t heard before,” [one attorney] said. “[The ruling] is a great step in the right direction, and it shows you the amount of creative thinking from the condo associations and their attorneys to try to maximize their cash flows.”

For more, see Judge taps receiver to collect rents on units in foreclosure.

Go here for Judge Leesfield's Order Appointing Receiver.