The Board of Directors met last night. They spent a good amount of time explaining to the owners of building 27 the complicated details of their finances. Apparently a building refurbishment loan with a premature repayment deadline had been renegotiated. The Board explained that the terms of the new loan were more favorable for building 27. They also explained that a loan default would have serious consequences for the entire Association because the once building-specific bank loans were "cross-colateralized" with other loans when the previous BOD purchased two units within the community.
There was much back-and-forth between unit owners and BOD members about the finances (when, how, and why decisions were made). In the end, a BOD member summarized the situation by stating the simple truth that we (the Association) owe the bank money and we simply must pay.
Apparently building 27 is not the only condominium facing financial problems. Keeping the financial records straight has always been a challenge here at TAJ. Every new BOD in recent history has expressed strong intentions to correct any problems in that area, and every BOD discovers, eventually, that our way of doing business is so complex that even well paid professionals have difficulty handling the work. By the way, it seems that the new accouting firm (Moody) is on top of our finances. Unfortunately, there are a lot of mistakes to correct from past years of poor accounting.
There was much back-and-forth between unit owners and BOD members about the finances (when, how, and why decisions were made). In the end, a BOD member summarized the situation by stating the simple truth that we (the Association) owe the bank money and we simply must pay.
Apparently building 27 is not the only condominium facing financial problems. Keeping the financial records straight has always been a challenge here at TAJ. Every new BOD in recent history has expressed strong intentions to correct any problems in that area, and every BOD discovers, eventually, that our way of doing business is so complex that even well paid professionals have difficulty handling the work. By the way, it seems that the new accouting firm (Moody) is on top of our finances. Unfortunately, there are a lot of mistakes to correct from past years of poor accounting.
Why dont we goto one association instead of 47 different ones? Also if our books are so complex why not hire a competent management company to do our books. It was said after you left last night Steve that even Moody is having problems with our books.
ReplyDeleteThose are really good questions and I know where you are coming from. The problems seem so straight forward and easy to address, but until you are the one actually trying to solve the problems and understand all the barriers to the solution, you just cannot appreciate how difficult it is to make it work right.
ReplyDeleteLet me share with you, in brief, what I know from my past experience on the BOD about the two issues that you mentioned:
1st, the requirements for changing the legal structure from 47 separate condos to one large condominium are so onerous that it makes the effort impossible.
2nd, as part of an effort to find an accounting firm to handle our books several years ago I found that firms that understood our complexity either turned us away or asked an unreasonable amount to do the job. Others promised that they could do it for a reasonable cost, but that lead us to MAI who totally screwed us by simply not fulfilling their contractual agreement and eventually quitting. The new BOD found Moody and they seemed confident in their devotion and abilities. We all hoped that it would prove to be the case. If Moody fails us, then maybe we end up back at Lieberman's accounting company.