In some buildings, the problems have nothing to do with the building or machinery itself. We took over a building that had a shared agreement with a commercial condominium attached to the property. The agreement was incredibly unfair to the commercial property, forcing them to pay large amounts for items that they had no use of and no access to. The commercial property had decided to stop paying, and the condominium had spent years in mediation, arbitration and court. When we started at the property, over $100,000 had been sunk in legal fees, and over $65,000 had yet to be collected. This had already led to special assessments for both properties, and a lot of bad blood between the two parties.
The lawyers that were being used for the condominium were suggesting more of the same. More enforcement letters, more time in court, and more money, with little prospect of getting it back. Given the cash flow of the building, this would have led to more fee increases and more special assessments – Something that they could no longer afford to do.
Our approach was unorthodox, but it worked. We sat down with the other party directly, without lawyers, in an effort to resolve the issue outside of court. When we did so, we learned a lot about their side of the issue, and we found that both sides were much more willing to negotiate without their lawyers in the room taking such a hard line. All of this was done off the record, and nothing was put in writing until a deal was reached on both sides. Making sure to receive outstanding payments in exchange for continued negotiation and some concessions on our end, we were not only able to collect the outstanding fees, but also to stop the massive expenditures to the legal firms. After only a few months of negotiating we had a tentative agreement, and then brought in the lawyers to help draft and finalize it.
While lawyers often fill a very needed gap in our industry, there are also times when their approach doesn’t work. By recognize these moments, looking at the bigger picture, and engaging in a meaningful ‘off-the-record’ discussion, we were able to save tens of thousands per year, and collect thousands more in revenue.