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Mass. AG’s Corona Regulations vs. Collections Questions Raised About Unpaid Common Expenses

Editor’s Note: During this crisis, The Cooperator family of publications will be passing along information, tips, and FAQs submitted by our network of industry professionals, including attorneys, managers, and other subject matter experts. The views and opinions expressed are those of the contributors, and as the situation evolves in the coming days and weeks, those views and opinions may evolve as well. We encourage readers to be mindful of this; check posting dates, make note of contributors’ locations and industries, and above all, consult with your own community professionals as you and your neighbors navigate this challenging landscape.

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.

 

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