A typical condo Association situation:

• Association has 24 total units

• Association has 5 unit owners that are not keeping up with their $500 monthly assessments.  The delinquent assessment situation is as follows:

Condo #          months late      total $  late assessments

  F                      3                    $1,500 (3 months @ $500)

  H                     4                    $2,000 (4 months @ $500)

  J                       5                    $2,500 (5 months @ $500)

  M                     6                    $3,000 (6 months @ $500)

  P                      2                    $1,000 (2 months @ $500)

                          20                  $10,000

• Association has been shorted receipt of 20 assessments for a total of $10,000, their budget and bill payments are now stressed and “bad blood” is developing among paying/non-paying unit owners. 

• Association finds itself in the uncomfortable position of being a bill collector among its common owners and neighbors. 

• With recessionary fears, a credit crunch, real estate foreclosures on rise, etc., condo associations need to prepare for increased owner delinquencies and budgeting issues.  How will Associations prepare for ongoing issues with delinquent assessments, and the collection of delinquent assessments?    

The LM Funding solution:

• Association has been shorted receipt of 20 assessments for a total of $10,000; LM Funding pays the association $8,000 upon entering into the Funding Agreement.  The Association receives this money before delinquent unit owners are even contacted or make any payments to LM Funding.  LM Funding assumes collection efforts and pursues unit owners directly for assessments owed, and when such money is received by LM Funding, it funds the $2,000 assessment balance to association…associations receive entire amount of delinquent assessments!

• Association is in the uncomfortable position of being a bill collector, bad blood among unit owners is developing, for example “why is unit M getting away without paying their assessments, if they don’t have to pay why should we?”  Solution is to let LM Funding be the association’s “bad guy”, and act as agent of association to deal with collections and deadbeat owners.  Association and unit owners don’t need to be so upset with their deadbeat neighbors if LM Funding pays 80% of their assessments when due and handles the collection of 20% assessment balance directly with unit owners. 

• How is condo association going to deal with on-going assessment collection issues?  Solution – LM Funding agreement with a association typically covers all units within the condo association, meaning LM Funding does two very important things:  a) LM Funding addresses the current delinquencies by funding 80% of “past due” assessments, and b) LM Funding addresses all “future” delinquent assessment issues, almost immediately as they arise.   For example, let’s say a unit owner s assessment is due on the 1^st of the month and your condo declaration allows for a 15 day grace period.   If that assessment is not received by the 15^th day of month, the association will simply call LM Funding and receive check for 80% of that assessment instead of having to call or write letter to the unit owner.  LM Funding assumes the collection of assessment(s) as agent for association, and provides association 20% balance of assessment after LM Funding collects.   After associations enter into agreement with LM Funding, the amount of uncollected assessments should never accrue to more then 20% of any one month.