On the other hand, if a development only has 25 residences and five owners stop paying, "the impact on the bills is swift," O'Neill says.
In such situations, complexes can save money by making tough decisions -- such as going from weekly landscape maintenance to biweekly, or to community work days, where owners get together to do the work themselves.
"Every dollar you don't have to spend is a dollar you can keep to operate," she says.
Deferring certain projects, such as installing new lighting, also can save money. But some projects -- such as repairing a roof leak -- must be completed to avoid legal action, O'Neill says.
Throw in the towelIn recent months, a handful of associations have admitted defeat and filed for bankruptcy. Associations typically take this step because of debts to large creditors or unpaid legal judgments.
Most associations want to reorganize under Chapter 11 and continue on as a viable organization without hefty debts hanging over their heads. By filing Chapter 11 bankruptcy, they live to fight another day.
The association at Boca Village in Boca Raton, Fla., is among those that have thrown in the towel.
Robert Kaye, managing member with Kaye & Bender in Pompano Beach, Fla., who represents the Boca Village association, says the development has been plagued by a large number of delinquencies, coupled with a lawsuit by a roofing contractor over unpaid work.
Boca Village decided to file for Chapter 7 bankruptcy protection. In this type of bankruptcy, a new association is created and the old one is liquidated.
In a bankruptcy, a trustee oversees the debt, while the board generally continues to operate the association. In such instances, Kaye says utilities are unlikely to be shut off.
"You have to go through bankruptcy court before taking any drastic measures like that," he says. "I don't think the court would allow them to just shut down the electricity or water."
So far, South Florida is ground zero for association bankruptcy filings. The legal outcomes of pending cases will determine whether the trend of associations filing bankruptcy spreads, Zifrony says.
The courts may decide to hear the pending cases, or decide it's not their role, says Zifrony, who represents two associations considering filing for bankruptcy.
"This is an unknown area," he says.
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