|
IT’S BUDGET TIME. YOU BETTER BE INCLUDING BAD DEBT
By
Eric Glazer, Esq.
Published November 6, 2023
It’s
November ---and November means it’s time to get out the
budget for next year. One of the line items that should
definitely be included in your budget is “bad debt.” Bad
debt is the amount of money you are not going to collect
from your non paying owners. For example: let’s say that
your assessments are $5,000 per year and that there are 6
owners who you know are not going to be paying their
assessments. Maybe two are in foreclosure, 2 are in
bankruptcy and two already stopped paying the association.
6 x $5,000 = $30,000.00 in “bad debt.”
That
$30,000.00 number should be listed as an expense in your
budget; Just the same as the landscaper or manager. If you
don’t put in a line item for “bad debt,” at the end of the
year, your association is going to run $30,000.00 short and
will have to pass a special assessment.
If the
Board is having a problem determining how much the bad debt
number should be, the association manager, attorney or
accountant should certainly be able to help.
Just
remember, as expenses go up and assessments go up, as they
definitely will, you can rest assured your “bad debt” number
will go up as well.
|
|
About
HOA & Condo Blog
 |
Eric Glazer graduated
from the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for three decades and is the owner of
Glazer and Sachs, P.A. a five attorney law firm with
offices in Fort Lauderdale and Orlando.
|
Eric is Board Certified by The Florida Bar in
Condominium and Planned Development Law.
Since 2009, Eric has been the host of Condo Craze
and HOAs, a weekly one hour radio show that airs at 11:00 a.m.
each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
Eric is the first attorney in the State of
Florida that designed a course that certifies condominium and
HOA residents as eligible to serve on a Board of Directors and
has now certified more than 20,000 Floridians all across the
state. He is certified as a Circuit Court Mediator by The
Florida Supreme Court and has mediated dozens of disputes
between associations and unit owners. Eric also devotes
significant time to advancing legislation in the best interest
of Florida community association members.
|
