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COVID-19 has impacted every aspect of our lives, and has certainly already had a significant financial impact on nearly everyone. Unfortunately, this past week the Massachusetts Attorney General issued Regulations [click here] that directly impact the collection of past due common expenses. The purpose for the regulations was to protect consumers from certain debt collection activity. However, in doing so the regulations effectively prohibit associations, property managers and their attorneys from initiating, filing or threatening to file a new collection lawsuit. While the regulations do not apply to mortgage holders or landlords, it appears that the Attorney General did not consider the impact on condominiums or homeowner associations. Rather, the unintended consequences of these regulations are that neighbors are carrying the expenses of the condominium for the other owners who cannot pay. Clearly, this is unfair and cannot be what the Attorney General was hoping to accomplish with these regulations.
MEEB is actively seeking to convince the Attorney General that the collection of unpaid common expenses for condominium and homeowner associations should be exempt from these regulations. MEEB attorneys are working together, with a coalition of other law firms representing associations, and with the New England Chapter of Community Associations Institute (CAI) and the members of the Real Estate Bar Association to obtain an exemption for Massachusetts associations. Nevertheless, until we are successful in getting the Attorney General to exempt condominium and homeowner associations from these regulations or the expiration of the regulations in 90 days (or sooner, upon the expiration of the Massachusetts state of emergency), boards are strongly encouraged to be in compliance. There is no prohibition in place at this time for Rhode Island and New Hampshire association clients.
To that end, Massachusetts associations and property managers should no longer send any communications to an owner that threaten an action for the failure to pay past due common expenses. You may still send statements or invoices reflecting the balance due, as long as it does not include any other language threatening collection or legal action.
We believe there may still be certain steps that we may take to preserve associations’ superlien rights that would be consistent with the Attorney General regulations. Therefore, we are strongly encouraging our clients to continue the practice of turning over accounts that are 90 days past due so we may review and determine the appropriate steps, if any, that are consistent with the Attorney General regulations.
We know that these regulations are problematic and may create a lot of questions regarding the collection of unpaid common expenses. Please consult with your legal counsel with any questions that you may have as we continue navigating through all of the impacts of COVID-19, and stay well!
Marcus, Errico, Emmer & Brooks (MEEB) is a law firm representing over 4,000 condo associations, with offices in Braintree, MA and Merrimack, NH. This advisory is offered as a service to clients and friends of MEEB and New England Condominium, and is intended as an informal summary of certain recent legislation, cases, rulings and other developments. This advisory does not constitute legal advice or a legal opinion and is not an adequate substitute for the advice of counsel.