Q&A: Unpaid Assessments

Q I am the property manager for a medium-sized condo association. There is an  owner who is several months behind on their assessment. We have followed the  standard protocol of the association of sending out notices and it has reached  the point where we have to put them in collection. The owner lost her job a  couple months ago, so we have tried to remain sensitive to the situation, but  the delinquent payments keep accumulating. What should we do next? Do we place  a lien on the property? Is there anything in Massachusetts law that dictates  the time frame for such situations?  

 —Behind in Belmont  

A “Unpaid condo fees and special assessments can be a real thorn in any condominium’s side, especially smaller condos,” says attorney Richard Vetstein of The Vetstein Law Group in Framingham, MA. “Not only do unpaid condo fees threaten the financial health of a condominium,  but a high delinquency rate can run afoul of newer Fannie Mae/Freddie Mac and  FHA condominium lending guidelines, thereby hindering the sale of all units.  

 “Fortunately, the Massachusetts Condominium Act provides condominium trustees and  managers with a fair amount of ammunition to recover those unpaid condo fees  and special assessments. The law provides that condominium common expense  assessments (monthly condo fees) are a lien against condominium units from the  date each assessment becomes due, and that unit owners are personally liable  for their share of condominium common expenses, including late charges, fines,  penalties, interest, and all costs of collection. Ultimately, the condominium  trust can foreclose its lien and sell the unit at foreclosure auction.  

 “The real teeth of the Condominium Act is the “super-lien” provision. A properly filed condo lien has “super-priority” over the first mortgage on a unit for up to six months’ worth of unpaid condo fees, plus all attorneys’ fees and collection costs. Required 60- and 30-day statutory notices must be  sent to the mortgage lender and unit owner prior to filing the lien. The lien  is effective once the lawsuit is recorded with the registry of deeds after the  60- and 30-day notices are sent. Typically, the mortgage lender will not want to allow a condo lien to negatively  affect the priority of its mortgage, so it will pay the unpaid condo fees and  other charges, then charge them back to the borrower/unit owner. Even in the  case of foreclosure of a unit, the super-lien will continue to roll-over (up to  six months’ worth).  

 “Another favorable aspect of the lien law is that a unit owner is not allowed to  withhold payment even if he or she disputes the charges. There is no right to  set-off. If the unit owner is unhappy or disputes the validity of the  assessment, that’s too bad. He or she must pay the fees under protest, and file a suit  challenging the legality of the assessment. And yet another helpful remedy in  the case of absentee unit owners is that the condo trust has a right to collect  rents from tenants of non-paying unit owners. The condominium association must  notify the tenants in writing that they are required to forward all future rent  payments to the condo trust until the unpaid balance is satisfied. This  typically gets the prompt attention of the unit owner.”  

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