NJ CONDO facing water, electric and gas shut-off, what to do?

Are you on the board? I have heard of loans made to corporations, but you need to acertain whether or not you will ever be paid back (if that is a real concern) and what the terms of the loan are. The HOA corporation can enter into a loan arrangement, but the board would have to OK that.

Sounds like someone was asleep at the wheel here for a long time. What is being done to rectify this, if your HOA ever gets out of this mess? Specifically, who is watching the books now?

Thank you for your posts.
The building has only one shut-off valve, but I think a plumber can easily put a valve on the hot and cold water pipes going into the units that have unpaid dues.
We have a meeting on Monday, I am on the board, I can pass a resolution to turn off the water service to units that owe more than a specific amount to the association.
Another thing I have taught of is to pass a resolution to discontinue hot water service to the units and that each unit owner should install its own boiler. This way we can also stop the gas bill and concentrate on what we can pay.
Does this sound right to you?
In the mean time the attorney will go after the owners.

Emre:

Would I loan the property money? NO

What would be your chances of getting repaid? NOT GOOD

Now as to your idea about shutting off services to the unit owners. Is that legal?

Can you do so under your by-laws? PROBABLY NOT

And finally your idea to cut of heat and require unit owners to install their own heating equipment. Do you have any idea if this is even possible? Where would this equipment be located in the unit? Exhaust would be located where?
And to replumb the water and gas lines do you have any idea what that would cost if possible?

And the cost of this work would be split between the property and unit owners how?

I would guess if the unit owners are having trouble paying their fees more than likely they won't have the funds to make ANY required addtions to there units if they are in fact possible to do.

And I would be very careful to research some of the questions I have made before you and the other Board members pass resolutions which can't be successfully enforced.

OK lets say we scrap the idea of shutting the water off to unit owners since it could be illegal, sooner or later the water company will shut it off anyway. The water co. also said they would put a lien on the condo association. The gas and electric company will probably do the same thing.
All these liens on the condo association will eventually force foreclosure on unit owners I believe right?
Another thing I can do is pass a resolution for assessments on all units, but when nobody except me and another owner is paying I dont know how much help this would be. Two units are already in foreclosure process so at some point the bank will own them and can pay the assessments or the water lien to be able to sell off these units right?
I am at a loss at this point, I dont know what to do. What saddens me is I was making a positive cash profit on my unit when renting it, even after paying tax and maintenance charges, yet other people's irresponsibility is making me lose my own investment.
I asked the new propoerty management co about what they would do, they said they have never seen anything like this. One guy off the record told me to walk away, but I dont want to damage my credit history.

My lawyer said I should pay all the charges and force foreclosure on other units but I do not want to spend 15K doing this.

Any creative ideas anyone?

Emre,
I just finished reading all the posts on this thread. To describe this as a mishmash is not out of the Ballpark.

There is at least one thing that strikes me strange here. Where do you get off saying "I" all the time? Do you have a board of how many? Do you have documents, have you been elected to what in what capacity?

Do you have any designs on buying this property at fire sale prices? You mentioned you and another owner but no mention of any board members.

If you are just a family caught up it something beyond your capability, are you doing the right thing for your protection. Why didn't the lawyer tell you how to protect your property? I would ask you what the lawyer should have asked you: "What do you want to pay me to do?" Is your situation: "I don't know what to do, so I will go out and flail around and maybe something will work," doesn't seem the best plan.

In view of this last paragraph I would advise that you establish what if any powers you ,("I") have. Then consider what you can do to save your investment first, and since we don't know if you can fix any of the other problems since authority has not been established, I would clear that up. I would turn personally to your town or county council members and go up the ladder to your state senator. Political pressure can stop some of the threats you are receiving from utilities if all is as you say, especially with your efforts over the years to meet your commitments. Keep pushing through the system and maybe you will get some help, if not you tried and this should help when you are forced to go to court because your place will be condemned if you have no water service, I would expect. Go to radio stations and local TV if all this stuff is real and you are left holding the bag, so to speak.

Thank you for your replies.
My personal lawyer has agreed to represent the condo assn for collection, two units dont even have mortgages on them so we will target those first to foreclose. Maybe the owner will turn around and pay if it comes to losing her two apartments.
I have put my condo on the market for a very low price and even got a cash offer this week,maybe
I will be out before having to deal with all this. My tenant is looking for a new place, we terminated the lease.

as for the unpaid water and electric bills I will have to play it by ear after talking with the other paying unit owner. Afterall things would be easier if there are no tenants in the building.

As some of you have foreseen, the cash buyer has found out about the building's problems and got cold feet. The sale of my unit will probably not go ahead.
In the mean time, I am thinking of what to do to protect myself.
The building has $10K in utility bills and is owed $11K in terms of unpaid dues.
It has zero reserves and only 2 unit owners (me and another lady who never comes to meetings)paying out of 7 which is hardly enough to keep insurance and management co fees on the building.

As for me, I do not have much of a mortgage around 50K.
I thought of two scenarios, tell me which one makes more sense:

1. Deed my unit to an LLC and keep paying my mortgage and keep the unit empty.
At some point, when lights and water is shut off, other unit owners either banks or other individual owners have to think of a solution. 1 yr or 2 from today maybe.Or the city condemns the building(!)

2. The alternative is arrange a payment plan with utilities, lend money to the association with a promissory note (I asked banks, they would not do it) keep the water and electric on in the building, and keep my tenant which pays my mortgage, insurance and taxes and I also pay out of pocket for legal fees putting liens on other units and hope at some point things will get better. In the mean time, since our board only consists of me and my wife(lawyer checked bylaws, said it is kosher), it would not be that hard to pass resolutions, or assessments (obviously which no one else is going to pay except me and maybe the other paying unit owner) We can also choose self management since $200/mo we pay every month to the management co. can be used to pay the building's master insurance.

Which one would you guys do?

Mary:

I too would NOT lend the association money.

As to the mortgage, is this property going to be worth anything down the line?
So you made payments on a place without water, sewer, and gas and electric. That makes the property worthless unless you intend on taking over the entire property and its costs.

Lets suppose you rent this unit to cover your costs. One year lease. Then the utilities are shut off. That makes this property you rented unlivable.
But you have lets say 6 months left on the lease. Just might put you in a tough place if the tenant decides to not go quietly into the night. The lease works BOTH ways.

Emre:

While I sincerely appreciate your offer I would respecfully decline at this time.

I would suggest you need to take a close look at what this whole situation might cost you not only in time and money but also aggravation.

You have a outstanding balance of $50,000. Paid off over the term of your mortgage will cost you how much _____________.

You have sunk how much into this property?
Down payment ________
Total of mortgage payments (X amount over how many months) ________
Misc. expenses (insurnace, ultilities, improvements) ________

Against your rental income ________

Now attempt to add up all your costs in dollars over the next say 5 or 10 years and come up with an estimate.

At X amount each month in rent it will take you how long to recoup your money just to break even?

The costs to you are not only in terms of money. Life is very short and if you were to take on this project no doubt it would require enormous amounts of your time for perhaps years to come.

Your thoughts about buying another unit while it might sound rational, for me that would be an absolute last resort for which I would require many answers and assurances that the other issues facing this property are now resolved.

Paying off a mortgage on a property that may soon be worthless makes no business sense to me.
Owning a rental property you are unable to rent makes no sesne to me.
Singlehandedly trying to hold up this property while 5 of the other unit owners seem unwilling to help makes no sesne to me.

The costs to file liens and force foreclosure on these properties will take time and money. If successful, who would be willing to take ownership of these units?

Emre you have to make decisions with your head not your heart. Make a good business decision using your brain and a cheap calculator it will give you the numbers you need. Sometimes what we wish for simply cannot be.

I love a challenge but when that challenge comes with a price that I am unwilling to pay for either in money or time I know what needs to be done.

My friend life is short. Is this worth your time and hard earned money going forward? Will all your efforts be rewarded in the end satisfactorily?

I wish you the very best no matter what your decision.

By the way I'm curious in what part of Jersey is this property located?