Company hopes to profit by buying rights to unpaid condo fees

Steve Lippman's property management company runs 62 communities, and every one of those neighborhoods has homeowners who are behind on their association dues.

The cash crunch has associations cutting back on everything from landscaping to property management, but Lippman spotted opportunity amid the gloom. Earlier this year, he and two partners launched First Choice Financial Solutions, a company that pays condominium associations for their uncollected dues.

"My clients stopped paying me," Lippman said. "We had to think of something."
First Choice pays associations 75 percent of unpaid dues, then takes over collections of unpaid fees. The arrangement entitles First Choice to late fees, administrative fees and interest of up to 18 percent.

When a bank takes back a condo through foreclosure, it's required to pay up to six months of fees. Therefore, Lippman is confident that First Choice will get back the money it pays to associations.

"Eventually, we're going to get our money," Lippman said.

How quickly is another matter.

"We could literally be sitting there for years," he said.

Some associations have never attempted to collect unpaid fees, so Lippman finds that a simple collection letter can pry loose unpaid dues. Also urging homeowners to pay: As a licensed collection agency, First Choice can ding homeowners' credit.

"We're aggressively going after people, whereas the associations are doing nothing," Lippman said.

First Choice has bought hundreds of thousands of dollars in unpaid bills, Lippman said. The cash gives associations much-needed money, and Lippman is hoping for a healthy profit.

Source: The Palm Beach Post, Fla., Jeff Ostrowski. Distributed by McClatchy-Tribune Information Services.