Condo associations have options for collecting overdue common charges

On Behalf of | Dec 22, 2022 | Firm News |

Common charges pay for the upkeep, repairs, services, and amenities, so those dues are essential to the building’s overall health. Nevertheless, condo owners sometimes fail to pay their common charges, perhaps due to a lack of funds, different priorities, a misunderstanding, or forgetting. There may be reserves, but it becomes problematic if many residents fall into arrears, making it difficult for the association to operate and do its job.

Taking steps to get the dues

A formal letter reminding those with outstanding dues is an excellent way to begin collecting money, but other steps will likely be necessary. These include:

  1. A common charge lien

    The board may file a lien against the unit’s owner, which can lead to a lien foreclosure. The threat of a lien often motivates residents to pay up. It doesn’t hurt to remind residents that all common charges, legal fees and interest will be paid before removing the lien.

  2. Rent collection

    The condo owner may sublet the unit to a renter. The board can have the tenant pay them directly rather than the owner until the common charges are up to date.

  3. File a lawsuit

    The association’s by-laws are basically a contract requiring the owner to pay common charges. Failure to do so puts the owner in breach of that contract. The laws vary from state to state, and different associations have different by-laws, but the board can initiate a breach of contract lawsuit or other legal action spelled out in the by-laws to secure payment.

Determining the best option

The circumstance of each dispute varies, but an attorney with experience handling real estate litigation involving condo associations can provide tailored guidance to address the matter. Their involvement alone may prompt residents with outstanding dues to pay. If some resist, the attorney can then take the next step to file a claim with the courts.