The downward spiral begins.There is a fundamental truth about "Quality".

It's a downward spiral.

They've recently adopted a new set of storm water requirements and between the "green streets" and mandatory frontage improvements they are requiring the design and construction costs have really spiraled. 

In the end they let the people out of the lease because it is better to have a smooth transition out than end up with late rents and things spiraling down. 

it's a self inflicted downward spiral that we see way too often. sadly they drag their children into the abyss.

It spirals out of control where John says operating without a license is not honest. 

Around 2005 there was a perfect storm that seriously hurt many associations, even those with a low percentage of landlords.If you have a good, well-managed association that has strong rules and regulations that are enforced and supported by a good law firm and a restricted number of landlords as well, the easier it is to prevent/avoid a downward spiral.  

I believe that people trapped in the debt spiral need extra help to get back on their feet.  

Why didn’t you just sell the house before the market started spiraling down?

He probably knew for some time that he was spiraling the drain, so was likely milking the cash flow while not paying the lender, not turning units as they became vacant, not servicing or replacing old mechanicals, etc., just as you suggested.