The COVID-19 pandemic will lead to a rise in delinquencies. The question remains - how bad will it get and how can boards soften the blow?

While restrictions have begun to lift, financial troubles haven’t for the millions who have found themselves unemployed.

While it is unclear how bad it will be, there have been comparisons made to the Great Recession, which stymied community associations nearly a decade ago and dried up associations. 

Professionals say the issue of collections is on the front burner, but a variety of strategies could help associations weather the storm.

  1. Every association should have a collections policy to serve as a roadmap for dealing with delinquencies. The board should apply the policy evenly to all residents, however, they should leave wiggle room for flexibility depending on an owner’s circumstances. 
  2. Communities must continually educate owners about the importance of assessments because community associations with high delinquency rates may have trouble getting bank loans of qualifying for Federal Housing Administration insurance. 
  3. When delinquencies do happen, reach out and invite owners to discuss possible solutions with board representatives. 
  4. Keep in mind that, to protect homeowners and renters during the economic upheaval, some governors have used their emergency powers to issue temporary moratoriums on evictions and foreclosures. Representatives of the community association industry worried that this type of measure could end up including assessments. 
  5. Running collections through a dedicated department rather than individual managers can help stabilize finances. 

Learn more, here

 

KSN attorney, Omar Malik, recently released a podcast episode in which he discusses the challenges he and his team faced while closing a $6.15M deconversion sale amidst coronavirus. He also discusses the deconversion process, applicable legislation, and changes in the closing process.

Listen to the podcast here.

Are you an investor owner who rents out your condo unit?

If so, there is important information you need to know about the recently passed Fair Notice Ordinance for Chicago residential properties. 

All leases or tenancies that expire on or after 9/20/20 must give the following notices to the tenant for termination, non-renewal, or rent increase:

1. If a tenant has resided in the property for, or has a lease term of fewer than 6 months, you must provide 30 days' notice of your intent to terminate, a notice of non-renewal, or intent to increase the rental rate.

2. If a tenant has resided in the property for, or has a lease term between 6 months and 3 years, you must provide 60 days' notice of your intent to terminate, a notice of non-renewal, or intent to increase the rental rate.

3.  If a tenant has resided in the property for, or has a lease term of more than 3 years, you must provide 120 days' notice of your intent to terminate, a notice of non-renewal, or intent to increase the rental rate.

Additionally, the Governor will be extending the order banning the filing of new eviction cases and the enforcement of the order of possession until 8/22/2020. 

There is pending litigation to overturn this Order.  

For pending eviction cases, there is a chance that the court may continue all the cases until after 8/22. 

Until the order expires, you can 

  1. File and proceed on commercial evictions
  2. File evictions for tenants that pose a direct threat to the health and safety of other tenants or the property.
  3. Serve 5 day, 10 day, 30 day, or non-renewal notices on tenants. In Chicago, you will need to follow the requirements for the non-payment of rent. 

Jason Knowles of ABC 7 Chicago's I-Team interviewed Lauren Peddinghaus of Haus Financial Services, LLC for a story on condo assessments and COVID-19. The segment aired on the 10 p.m. newscast on Wednesday, July 28th.

Watch the story to learn more about how the pandemic is affecting condo unit owners who may be struggling to pay their monthly assessments.

As a response to the recent rise in COVID-19 cases, Mayor Lightfoot is reinstating certain restrictions that will take effect Friday, July 24 at 12:01 am. 

Among these restrictions is that guest entry will be limited to five per unit to avoid indoor gatherings and parties.

While not mandatory, the City is asking buildings to enforce this through their front desk attendant and/or displayed signage. 

The new guidelines also adjust in part the Restore Illinois: Phase 4 guidelines relative to fitness centers. 

Read the full press release, here

 

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