Condo Association Management Blog

This matter should be assigned to legal counsel.
Regardless of the size of the complex you should not jeopardize other owners rights

Missing dues payments can be an indication of serious financial stress. Often the owner is not making other payments either. For example the owner may be behind in his mortgage. Depending on the state that you live in, the association may not be able to lien the property after it goes into foreclosure. So you will want to act promptly if someone is two months behind.

some condo owners are not making their maintenance fee payments and i just received a notice stating that if the association does get their payment the rest of the non delinquent owners will be assessed. is this legal? please help me i pay everything timely and i have get penalized? thanks!!

I am the treasurer of a small condo complex(12 Units) in Warren, Massachusetts. Besides myself, we have only 5 units that pay fees monthly. Or association is so broke, we can't afford to pay an attornet to handle our collections. Would it be possible for us to represent ourselves in the collections process?

What happens to the condo owners if our association goes broke?

does the declarent have to pay condo dues on unsold units in massachusetts?

I am a trustee on a condominium board. One of the trustees is consistently delinquent in paying his/her condo fee. At the same time this person is allowed to vote on decisions that would require an association expense. Is there any law that would prevent this trustee to represent the neighborhood while they're delinquent? What action could the trustees make against this trustee?

I am the Treasurer of a 7 unit complex. We have had 4 out of seven units go into foreclosure. Prior to going into foreclosure, each owner had stopped paying dues. The HOA placed a lien on each unit. Two of the banks we contacted have agreed to pay any past due HOA fees.  
 
Our CC&R is set up such that any owner that is not current on their dues will lose all voting rights until dues have been made current. The board members decided sometime ago to put money aside for the most needed repairs or improvements rather than trying to cover everything at once. If needed, special assessments may be made should the reserves not cover an expense. We have cut down maintenance costs by performing small tasks ourselves rather than hire someone else.

Hi, Lynne. I am the Treasurer of a 5 condo units. We have had 2 out of 5 units go into foreclosure. We don't have enough money to hire a lawyer to file lien against those 2 unit owners. 1 unit owner left this country already. Did your HOA hire a lawyer to place the lien? If so, what steps did the lawyer for filing a lien? Can we file a lien ourselves without a lawyer? Thanks.

If I was you, do what I am doing, if you put a lein on the property, the mortgage company is only required to pay you the last 6 months and no assesments, well at least in Massachusetts, I am bringing all the non payers through small claims and hitting them with judgements they are required to pay until I get the balance below the last 6 months and then placing a lien on the property, I just won a 1500 dollar judgment the other day, that was 10 months worth of fees and assesments.

Hi, Gareth. Did you file a small claim against the mortgage company to pay you back for the unpaid assessment fees? How long did it take to win your case? How did you get the mortgage bank’s contact information? We have 1 unit owner didn't pay any assessment fee since 08/2008. Will I need to file a small claim against the mortgage bank for 11 months unpaid assessment fee? Thanks.

I filed against the owner of the condo. What state are you in, In Massachusetts you can go to masslandrecords.com and get any info there. But I am filing against the owner of the unit, because if you go after the mortgage company, you are only allowed to get 6 months past due and no assessments. you can email me personally at garethadr@gmail.com

I am the treasurer of a 4 unit condo. I had trouble collecting fees. We started using a free tool online to manage our information, documents, and finances. It is really easy to use and all the unit owners can view past, present, and overdue payments. It is mycondobooks.com. Hopefully this could prevent having future lawsuits.

Gareth, how do you put a lien on a delinquent condo owner? Do you need a lawyer?

Josh 
you dont need a lawyer, our legal system is a self help system where if you do the neccessary research you can find the right way to place a lien on a condo. 
 
Here in Massachusetts, you have to inform the owner of your intention to do so with a certified letter and also send a copy of that letter to their mortgage company which you can find at the Registry of Deeds or on the Tax information at the town hall. After you send that letter and if they still wont pay, I would send another letter to the mortgage holder, indicating your intention of filing for the lien down at the Registry of Deeds. 
 
Now I am not a lawyer, I cant afford one we are so broke so I am only telling you from my experiences. But try Small Claims court first 
http://law.onecle.com/massachusetts/183a/6.html

Hello all: 
 
 
 
I just found this post so my response will be a little lengthy as I try to address most of what's here. Full disclosure, I'm a licensed collection agent in WA. 
 
 
 
The problem of unpaid assessments is huge for condominiums and HOA's. Management companies generally only have a process in place to handle everything up to 60-90 days delinquent. After that, the standard response is to send them to an attoreny to pay $300/hr chasing a $150 bill. As a board member, I was maddened by this so I started my company. 
 
 
 
The strength of what we are doing is that we have a process to collect after the management company stops theirs. For small and self managed associations, we cover the entire delinquency process. We have different plans so the association can afford us. Everything from a monthly fee to a straight contingent collection whereby the association pays nothing to us. 
 
 
 
So this doesn't turn into a shameless plug, the most effective means of collection you have as a condo association is to sue them in small claims court like Gareth said. You do not need an attorney for small claims court in most states. Small claims can handle (in WA) amounts up to $5,000 so that covers the majority of your condo delinquencies. The reason it's effective is because small claims court can then issue a wage garnishment and you can attach the debtor's wages or even their bank accounts or any other property they may have (think free and clear vehicles...yes even that old junker sitting out front). You may have to do some skip tracing or asset location to find these, but these are services you can find online pretty cheaply. One I've used regularly is Intellius. They're decent (as in the information is reasonably accurate) and fairly cheap ($2-$10). You, as their neighbor, have an advantage over me. Your relationship is warmer than mine is with them so you are more likely to get information from them or their neighbors. 
 
 
 
Liens aren't too effective unless you know the property is about to transfer to a new owner or the bank. For example, if you see the property posted for a foreclosure, get your lien on title. For the liens, I would probably tell you to talk with your self help section at your local law library. Those folks at the law library are amazing with their knowledge of the legal system. They can't give you advice, but they can give you many, many books that attorneys use (and in most cases the forms they use) so if you can read the English language, you're in good shape. 
 
 
 
A trick I've learned for recording liens is to make the lien as big as you can. Add every single charge you can think of. Late fees every month, fines, costs of recording, costs of preparation, legal expenses, AND interest at your state limit (12% in WA). The reason for this is that it's been my experience that when the property forecloses, I will recover about 75% of the charges that I recorded. So, the higher I push the lien, the more that's recovered. Yes, the bank only has to pay 6 months and some only pay that. Most banks pay everything that was charged or assessed in the previous six months. So, Wells Fargo is famous for this, if I get my lien on title, they will pay all charges that are associated with the preceeding six months get paid...including my lien and the interest. 
 
 
 
Finally, consistent pressure works. Yes, it's uncomfortable as a board member banging on someone regularly, but it does work. Why do you think bill collectors call so much? Yes it's annoying, even to the guy making the call, but people eventually pick up the phone and talk because they are tired of the constant phone calls. Like I said, it's not pleasant but it sure is effective. 
 
 
 
Bob is correct, the earlier in the process you catch someone, the quicker the resolution because the amounts are still managable. Start early on collecting. 
 
 
 
Vivian, Yes, if the other owners don't pay, everyone else does. No, it's not fair, but generally those who are responsible end up paying the freight. 
 
 
 
Sandra, most associations have it in their bylaws that board members have to be in good standing. If you do, you could simply bring a motion at the board meeting to remove that person for not being in good standing (check the bylaws and CC&R's for the exact process). 
 
 
 
Feel free to email me with questions. I'll help as much as I can. 
 
 
 
Darron 
 
HOA Receivables Management 
 
 
 

How do you handle an owner who is not/has not paid in almost 2 years & now says that he lost his job & will not be able to pay anything until he gets a steady income back.

Good Morning Jennifer: 
 
First, I do not mean to offend anyone. What I say may sound harsh, but I offer you my opinion of what I'd do as a board member. 
 
You all should decide how much grief you're going to put up with from this guy. If he didn't pay the previous two years when he had a job, it's highly unlikely that he'll pay when he finds a new job. 
 
Not to be mean, but it's time to have a serious come to Jesus chat with him about the cost of ownership. Since it looks like he can't afford the unit, he should sell it. There are some people who are not cut out for ownership. 
 
Your option at this point looks like you would have to foreclose to force him out if he won't go voluntarily. Consult a lawyer here because you are entering a legal maze. If he's their involuntarily and your association takes title, he becomes a squatter. Then, you have to evict him under the landlord tenant laws. Most evictions end poorly with damage to the unit. So, to sell it, you all are going to have to fix the place so that it's marketable. If he's skilled at skipping (and some are very skilled) he can get a tenancy advocate and drag the process out through the courts. I saw one tenancy case take 13 months to resolve. 
 
Some boards may not have the stomach for it because they'll look at it as kicking the guy when he's down. It would be a different story if he was trying and was paying when he had a job. Heck, even if he paid $5 a week out of his unemployment I would have a different opinion. 
 
If you decide those remedies are too hard core, simply get your lien on title so that if the bank forecloses, you can recover as much of your money as possible. 
 
Your last option is to wait and pray. I see some boards do that as well. 
 
Darron 
 
HOA Receivables Management

We are a 4 unit with the builder being the owner of 2 units and is the President(Sponser) and wife Treasurer and the other owner doesn't pay anything the President pays for her he is now in foreclosure and owes this years ins and says he has no liability to pay for the insurance and for us to take her to court to get her money looks like mortgage is going to force ins..any suggestions?

Maggie, What state are you in?

Darron, 
 
In the state of New Jersey

New Jersey.......does this make a difference?

Maggie: 
 
 
 
Sorry, I lost track of this post. I was out of the country for three weeks doing National Guard training. 
 
It doesn't look like you have a lot of options with the developer. I would make sure that the association recorded liens against their property so you can recover the greatest amount possible in the event of a foreclosure. Given the defaulted people are on the board, you may have to get them off. Most bylaws have a provision that states board members have to be in good standing (current on assessments). Then, you would comprise the new board. 
 
With respect to the force placed insurance, I would call the mortgage company to see if they will let you select the insurance policy and pay for your quarter share of it. They may be open to that and it would certainly be cheaper than the force placed policy. Call me if you have any questions. The number is on my website. 
 
Darron 
 
HOA Receivables

Thanks Darron, Were able to purchase flood ins just covering us and too late for liens both units are in foreclosure one up for sheriff sale. One bank has been very cooperative and forthcoming with info right now no one is paying condo fees. I guess until new owners take over we will have to wait and see. One area that worries us is that there is no liability ins on the whole building, we do have individual homeowners.

Darron - We are a large condo complex of 218 units. Boards over the past years have done a poor job of collecting dues. People have been allowed to go for years without paying. The present board is still doing a poor job. My question is, can i as a member of the association(not board member) take them to small claims court? We have a huge amount of deferred maintenance, landscaping and other problems. Someone has got to step up and do what is right. I'm tired of paying when other people don't

Elizabeth: 
 
 
 
the short answer from my non-legal layman's standpoint is no. If you are not authorized by the board to pursue the collections or court case, then you wouldn't have standing in court to be the plantiff. The defendant would be able to attack your standing and likely have the suit dismissed. To bring a lawsuit on behalf of a corporation, you have to be a principal of the corporation, president, secretary, treasurer, or some sort of officer or their attorney or agent. So, if the board authorized you to file the suit and you had a copy of the corporate resolution, you would likely be able to do it. The easiest route I would encourage you to take is to simply get on the board or volunteer for their "collections committee." 
 
I would also encourage you to try a few other options mentioned on this board. 
 
Darron 
 
HOA Receivables Management

I live in a 4 unit condo in DC and one of the owners hasn't paid condo fees to the tune of $6,000. I know you are wondering how it got this bad. He would fall behind and then make thousand dollar payments only to fall behind again. We sent a demand email and then the very next day he filed Chapter 7 bankruptcy. We had no idea he was going to do this and hence there was no lien placed on his unit. According to DC law I believe we are entitled to 6mo back in condo fees as his bank is pushing to foreclose. Meanwhile another owner issued a stop payment on his condo fees. So its just two of us that are paying and we won't be able to pay our bills through the management company. What are your opinions for us to do? We are awaiting more details next week at the bankruptcy hearing. We are filing a lien on the other owner who issued the stop payment and another on the co-owner of the six thousand dollar guy's unit. This is an absolute mess and I wouldn't wish this on my worst enemy.

Hello, 
I was hoping that someone could provide me with some information, as I am in desperate need. I fell 5 months behind with condo fees and was contacted via an attorney who informed me that he could lein my property and force me to sell it? All of this over $1100. I asked to be put on a fair payment plan of $500 for 3 months, as I am not working and have MS, however he told me in MA that a 2 week payment plan is what is allowed and if I do not comply, we will be taken to court and forced to sell. Can anyone let me know if this is accurate and if not, what recourse I have? 
 
Thanks, 
Sharon