|
Apartment Complex Foreclosed on. Out $5K |
|
|
|
|
Written by Book
|
|
Friday, 22 September 2006 |
"We have an apartment complex that had wholesale account from us. We placed the equipment and billed them on the 95th percentile and they billed and supported (or tried) their tenants. They were slow paying customers and were normally running a $3 - $4K balance with us with about $1500 a month in usage. Since we were billing by the usage, they were always billed in arrears. Well come September 1st,(the bill now reaching $5K) the bank foreclosed on them and took over operations. When we went to pick up a check that was promised the first week of September, they told us they had been foreclosed on and that the bank was running the show now. The manager said that the bank was retaining the staff and wanted to keep the cable and internet. She told us that we needed to send them a shut off notice and that the bank would pay up. So we sent them a shut off notice and the guy from the bank said they would pay $2500 before the shut off and $2500 by October 1 to bring the account current. Today, the banker drops in and says the banks attorney has advised them not to pay anything past due and that they will pay for any usage September 1 going forward. The Bank supposedly has a letter of intent for purchase of the complex from a management company from out of state. They are in due diligence proceedings now. So what to do when you get a $5K FU thrown at you. We could continue providing service to at least recoup some of our money having the bank as a customer. We would have a good shot at having the new company retain us, even though there is no gaurantee and assuming they are good payers. Or should we play hard ball with them trying to recoup the $5K and most likely lose any chance of having the account going forward. Again, the major assumption here is that the new owners will be good payers. I'm not 100% certain but I think a lack of broadband might be a breach of lease and I beleive they collect it in advance which means they would owe a refund to tenants. Anybody been hit like this before and what would you do?"
superdog:
Yes. I tried to provide "Wholesale Bandwidth" once, and got burned by a building owner. Look, The Bank only plays hardball when they are losing $$$, so why shouldn't You?. If You cut them off, I would make sure You kindly make a few phone calls to let all of Your competitors now that they are $5000 in arrears. Since no one will give them service, the tenants will start to leave in mass fashion, or at least ask for refunds, and in the mean time, I would go to the district Justice and file against both the prior owners and the bank for payment in full. In most states, providing service of some type should allow You to put a mechanics lien on the building, and if I remember correctly?, mechanics liens come before any other?????................
jarosoup:
Would it be possible to raise the rates in order to make back your loss over time? Bump everything up by 25-50% until you hit your mark - unless this is something you need back in full yesterday.
You might want to consider consulting a lawyer before pulling the plug. You could probably spend less than $100 to find out if it would be worth fighting, so that you might be able to get something back, if there are no other options, and without losing your customer.
RockyBB:
the old owners owe you the money, not the new owners, so you would be in legal jeopardy if you shut off service. The new owners will need to apply to be your wholesale customer ... they will need a new credit application, you'll need to do a credit check to evaluate their creditworthiness, and I think you have a $5,000 account startup fee, as do most WISPs, right?
Book:
Trust me, I would love to collect a 5 Grand setup fee. I want to do whatever I can to recoup money but yet get off on a good foot with new owners. I could always raise the rates drastically from September 1st going forward. Afterall, the bank is not willing to "assume" any of the previous balance, why should they "assume" they will get the same rates as the previous owners and walk right into a working system with no account setup charges? Even if they hire a competitor, it's a chance to possibly recoup a good chunk. I do know this, we will collect financials and maybe require a deposit going forward.
Wisp:
As far as I know, once foreclosed, the bank does not need to pay you since you did not have a lien against the building. If you did, you would have been paid. The best thing you could do now is to put a machanics lien like superdog said, and when the bank goes to transfer the ownership to the new people, the title company will have to pay you to close the deal. Only way around that for the title company is to come to you and ask to release the lien.
This way, your debt is secure, also you would not piss off the new owners since the money to pay the lien is not coming out of their pockt. it is coming out of the bank pocket.
Original thread location |
Business Operations