LM Funding FAQ’s (click on question for answers):
1. Where is LM Funding based, what is its background and story?
LM Funding is based in
LM Funding is extremely well capitalized, with a business plan committed to reaching out to all
2. LM Funding sounds kind of like a collection company, or a law firm that does collection work...is that right?
No. A collection company is typically hired to pursue collection of bad debt, and if it successfully collects that debt it is entitled to keep a large portion of it. LM Funding is totally different and much better for the Association…because LM pays Association 80% of bad debt in advance, and the 20% balance after its collected.
LM Funding also differs from typical law firm hired to do collection work in that we pay Association 80% of bad debt in advance, the 20% balance after it collected, AND WE DO NOT CHARGE ASSOCIATION LEGAL FEES. LM Funding pays for our own legal expenses associated with collections.
Also, neither a collection company or law firm ensures for future assessments (i.e. bad debt) being paid like LM Funding.
3. Sure our Association has some delinquency issues, but its really not affecting our ability to pay bills…why do we need LM Funding?
An Association that currently has some delinquent assessments will likely have more and more delinquent assessments. The sooner LM Funding gets involved, the sooner delinquency issues can be controlled.
LM Funding is a free insurance policy, it costs an Association nothing to sign up and it’s an immediate benefit in managing collections going forward. For example, if next month 3 unit owners don’t pay their assessments the Association simply calls LM Funding for a check to offset the non-payments, instead of having to go after the late paying owners themselves…why wouldn’t you use LM Funding?
4. Our condo property was recently constructed (or converted), a portion of its units are still owned by Developer who is guaranteeing their portion of Association expenses…what can LM Funding do for us?
LM Funding will fund against the units Developer has sold. LM Funding will not fund against Developer owned units while Developer is guaranteeing Association’s expenses, or fund against Developer owned units while Developer has any position on Associations board. LM Funding will consider funding against Developer owned units only after Developer has relinquished total control of Association and Developer is no longer guaranteeing anything to the Association.
5. How much money can LM Funding provide to a Condo Association?
LM Funding has no maximum funding amount. Our minimum funding is $25,000, although smaller initial fundings will be considered on case by case basis. Our business model is predicated on the more money we can fund the better.
6. How quickly can LM Funding provide money to an Association?
It generally depends on the Association, but as LM Funding completes due diligence and the assignment agreement is executed, we anticipate an Association will receive funds within 10 days.
7. Exactly how much does LM funding provide an Association in relation to Association’s delinquent assessments, and how long will it take LM Funding to collect and recover such fees?
LM Funding advances up to 80% of the face value or delinquent Association assessments directly to Association upon mutual execution of our Assignment agreement. The balance of the face value of delinquent Association assessments will be paid to Association when the delinquent assessments are actually recovered.
8. When will a unit’s Association assessments qualify for LM funding?
LM Funding will fund against unpaid assessments as soon as the grace period for payment(s) has expired, and they are considered delinquent pursuant to Association’s declaration and by-laws.
9. What is the basis of LM’s Funding & Assignment Agreement from the Association’s perspective?
LM will provide a Funding proposal & Assignment Agreement based on each Association’s specific situation. The general premise of our agreement is that a) LM Funding purchases assignments of delinquent Association assessment balances, and b) Association authorizes LM Funding to lien, foreclose and collect upon Associations behalf and Association assigns its rights to collection proceeds to LM Funding.
10. What does LM Funding get out of this deal?
Florida Statutes allow interest to accrue on unpaid Association assessments as well as the recovery of late fees and legal fees. The exact amount of interest and late fees is determined by the Association’s declaration and if the declaration contains no stated interest or late fees,
11. Does the Condo Association have any liability to repay LM Funding for money funded, even in event LM Funding is unsuccessful recollecting the debt from unit owners?
No. LM Funding assumes all risks associated with collecting delinquent assessments and in the event we are unsuccessful in collecting the assessments funded to Association, the Association has no financial obligation to LM Funding. LM Funding is actually purchasing an assignment of Association’s collection rights rather than lending it money. Association is only obligated to assign LM Funding Association’s statutory collection rights and support LM Funding’s efforts to collect assessments as outlined in our Assignment agreement.
12. The legal costs of filing claim of liens, and going after the delinquent assessments can add up quickly and be quite expensive, is the Association liable for any of LM Funding’s costs and expenses to re-collect assessments?
No. LM Funding will not only pay for all of the legal costs of pursuing delinquent assessments, but will also do all the work. An Association no longer has to retain attorneys directly or deal with this process…LM Funding takes over. LM Funding has in-house attorneys, but will consider using an Association’s attorney for local filing work.
13. How does an Association enter into an LM Funding agreement, does it require an owners meeting and vote?
An LM Funding attorney will review Association’s declaration and documents to determine this. However, we anticipate that the large majority of Associations will require only the current board’s consent without the need for an owner’s meeting or owner’s vote.
14. Should a Condo Association have an attorney review the LM Funding agreement before signing?
It is always wise to have an attorney review legal documents, and we recommend Association's have our documents reviewed by their business attorney, or the attorney that drafted their condo documents. We do not recommend Associations have our documents reviewed by an Association attorney if that attorney is currently engaged in claim of lien and collection work for Association, as a business conflict probably exists.
LM Funding has in-house attorneys available to discuss legal issues directly with the Association’s attorney.
15. What if our Association already is being managed by 3rd party professional management company or
LM Funding is not an Association manager and has no interest in the management business. Our business is designed solely to support the existing Association management by providing them capital, and assuming the re-collection efforts of “delinquent assessments” only. LM Funding is fully capable of taking over re-collection efforts on the delinquent assessments and will coordinate our efforts and accounting to the current system Association, or Association’s management has in place.
16. How should we expect LM Funding to treat condo owners in regards to making late payments, assessing interest, and fees, filing claim of liens, and taking foreclosure actions against condo owners?
LM Funding will enforce all rights provided to the Association by its declaration, by-laws, and
LM Funding will file claim of liens, and take foreclosure actions in order to collect past due assessments. It is very unlikely that LM Funding will not be paid current on assessments, either by unit owners or their mortgage holders before it is necessary to force a foreclosure sale.
17. Unit owners tell us they simply cannot afford and/or refuse to pay assessments for whatever reason, how is LM Funding going to collect assessments better then us or our management company?
Florida Law grants Associations priority lien powers to ensure an Association can collect its dues. However, collecting delinquent assessments through claim of lien actions or foreclosing on liens can be a tedious and time consuming process that requires up front capital to pay legal fees and costs. It also often requires taking a less lenient position with unit owners then comfortable by a condo board. The up-front capital and collection work also goes beyond a management company’s scope of typical services.
LM has the resources, personnel, legal knowledge and collection experience to fully utilize a condo associations statutory rights, and a business strategy designed specifically to recover delinquent assessments. In addition to collection efforts to unit owners, we use assigned lien rights to negotiate collection payments from mortgagees, loan guarantors, etc. In extreme cases, LM may also enter into foreclosure forbearance agreements, buy out mortgagees/owners, or even foreclose on a condo.
Also remember that LM is the one at risk for collecting assessments since we fund Association 80% of the bad debt in advance and we paying for legal expenses...if LM is unsuccessful on collections the Association keeps our money and still ahead of game.
