A Secret your Board Needs to Know so they can Collect all Back Common Charges by Renting of Vacant and Foreclosed Condo Apartments!

If a condominium apartment has been abandoned and left vacant and the unit owner is in default on their common charges leaving the Board of Managers is proceeding with a foreclosure action, the condominium may proceed to collect the monies by appointing a receiver.

This is done by motion (Order to Show Cause) which is submitted to the Court explaining that pursuant to Real Property Law Section 339-aa which permits a Receiver to be appointed for the purpose of leasing a vacant apartment and collect rent to apply to ongoing common charges. Notwithstanding, the unit owner/defendant has abandoned and is no longer occupying the subject premises, the condominium plaintiff continues to provide services to the building, heat, water, etc… Once the Order is signed by the Judge naming a Receiver, the Receiver is contacted and provided a copy of the Order.

Along with the receiver the managing agent will make arrangements to rent the apartment to a prospective tenant. At that point the Receiver will collect and record the rent and provide to the managing agent with an accounting and payment. Slowly but surely the arrears will be paid and the condominium will be made whole.

If the apartment is still rented before the foreclosure takes place and the condominium arrears have been satisfied, the rent is put in an escrow account by the receiver to pay for future common charges, legal expenses or tax liens. If none of the expenses occur it then can go back to the unit owner or bank if there is a mortgage deficiency after the foreclosure takes place.