Co-op/condos tackling delinquencies, budgets.

For suburban real estate management companies, the first half of 1993, while differing slightly from what now appears to be happening, set the agenda for the rest of the year.

Compared with the prior year, 1993 began with a sudden surge in bank foreclosures of individual condominium and cooperative units - up 15 per cent. Consequently, as a management company dedicated to protecting the interest of the boards we serve, we quickly shifted from concentrating on getting our clients the best value for monies spent to actually making sure that the money first comes in.

We did so by emphasizing the collection side of our capabilities. We began by making co-op and condo boards aware of the seriousness of the situation and working with them and their attorneys to get authorization to take over delinquent accounts.

Dealing with share-holders or unit owners who fall behind in maintenance payments calls for sensitivity and tact. It must be borne in mind that delinquents in the majority of cases miss payments because of factors beyond their control-job losses and business reverses -- not because of character faults or mismanagement. When they bought their residences or shares in their co-ops they passed credit and background checks or they wouldn't occupy the units on which they are now delinquent.

Accordingly, we contact delinquents discreetly, create payment schedules which they understand will result in our reluctantly seeking an immediate judgment against them if they miss a payment. We are also now adept in determining when unit holders seek to capitalize on current economic conditions by reigning problems to avoid or delay payment.

Regardless of protocols followed, however, we can't overemphasize the need to keep all residents in today's straitened economic environment up-to-date. Delinquencies have an obvious snowballing domino effect. One owner falling behind in maintenance payments increases the burden on others and the probability others will then lag, reducing reserve funds, forcing boards to slash or defer vital maintenance programs.

The latter crisis is most serious and all too often is likely to be ignored by hard-pressed boards.