Forum Replies Created
-
Replies
-
Banckruptcy is not the only option
Being on a committee and dealing with a recalcitrant owner, who simply ignored efforts to discuss a payment/hardship plan (it being Covid 19 as well) forcing us to proceed with civil proceedings. The recalcitrant behaviour continued with him ignoring court hearings and summons, and the court was unable to do anything about it given it was a civil matter.
Going through this process and seeing the inadequacies and short comings of the process and protections offered to the OC regarding recovery of monies etc, being unsecured creditors and the court appointed trustee acting for the court, I was struck by how strong the call/advice was to force the bankrupty on an owner as the only option.
We postponed making a decision,and the risk of being unsecured creditors, allowing the debt to rollover at 10% interest, given the only guarentee of the money to be recovered would be on sale/reposession as long as the lender was formally notified, which made sense with some particular risks needing to be considered
Not forcing bankruptcy also kept open the possibility the owner could refinance and clear this debt given the 10% penalty being imposed with doing nothing.
Fortunately, he managed to refinance and the circa $40K debt (Levies, interest and legals) were recently paid in full, so it was a win-win in the end.
We managed to sack our Strata Manager after 22 years and the benefits have been huge It was a huge effort and many people were convinced that the world would fall apart if we messed with this admin function. Breaking up the cozy little set-up was the goal and amazingly we finally did it.
We had a big barrier to convince the majority of our 137 lots and the worries of the sister SP as there is a lot of shared common property and there was a misconception there were benefits to having the same SM Company and Manager, we are no seeing how wrong they were.
We managed this by using a Strata Manager Broker out of Melbourne. He provided us with the base questionnaire of 130 questions and we added 50+ of our own, this template and knowing we had all the basics covered was really useful. He also provided a spreadsheet to compare the costs/inclusions of the final three we considered, which gave us a one-page overview everybody could understand).
The benefits of using a SM Broker included him providing 5 qualified contenders (we approached 3 others independently), a 3-month waiver of strata fees with the new SM (if provided by the broker), and a lot of support and advice about the process and dealing with the desperate misinformation coming from the soon-to-be-outed SM when they realized they were indeed losing a cash cow into the future.
Once we decided on the new SM we had a committed team member who knew the ropes and got us over the line and the vast majority of the owners voted for the change.