A CONDO UNIT OWNER HAS NOT PAID CONDO FEES IN MONTHS, WHAT CAN I DO NOW?

Condos Are Subject to M.G.L. ch.183A

Every Condominium is subject to a specific statute in Massachusetts titled Massachusetts General Laws Chapter 183A (“MGL c.183A”). Condos are special entities and have legal independence, but are distinct from a non-profit entity or a corporation. Condominium are established as “Trusts” with Beneficiaries and at least one Trustee. The Beneficiaries are the Unit Owners. Each Unit Owner ‘owns’ a percentage of the Trust and is responsible for the same percentage of Common Expenses, Monthly Condominium Fees and Special Assessments. Condominium Trustees are also Unit Owners, but a management company can be hired by the Trustee(s) to run most of the day-to-day operations. However, hiring a management company can be expensive and is typically used by larger Condominium. As a result, the vast majority of Condominium are run and managed by Unit Owners elected as Trustees.

Unpaid Condo Fees Can Be Collected

When a Unit Owner fails to pay Monthly Condominium Fees, Special Assessments, or other Common Expenses it can become a serious financial burden on the Condominium “Trust”. However, MGL c.183A gives Condominium Trustees significant power and authority to collect unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses from delinquent Unit Owners. The problem for many Condominium Trustees is that they don’t know what their options are or how to properly collect unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses from a Unit Owner. The process becomes a bit more tricky as well when a Condominium unit is in foreclosure or bank-owned.

The Jacobs Law, LLC helps Condominium Trusts and Trustees with collection of unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses.

Unpaid Condo Fees Can Receive Super Lien Priority Status

First, according to MGL c.183A, section 6, every Trustee should know that the Condominium Trust has what is called a “Super Lien” on a Unit Owner’s Condominium unit for Monthly Condominium Fees, Special Assessments, or other Common Expenses. See http://www.malegislature.gov/Laws/GeneralLaws/PartII/TitleI/Chapter183a/Section6 to read through the entire statute. The Condominium must take certain action to obtain the Super Lien, but it is a process The Jacobs Law, LLC can help complete. A Super Lien has priority over even the mortgage company that lent the Unit Owner money to purchase the Condominium unit – which means that the Condominium Trust can force the foreclosure of a Unit Owner’s Condominium unit for unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses. Due to this fact, the mortgage company will regularly pay the outstanding Condominium expenses due to avoid having their mortgage lower on the priority list. Banks that own a foreclosed Condominium unit, or one that has been abandoned, will generally work with the Condominium Trust’s legal counsel to pay past due Monthly Condominium Fees, Special Assessments, or other Common Expenses as well as the legal fees and costs incurred to collect the unpaid amounts.

Second, not ALL fees assessed by the Condominium are eligible for Super Lien priority status. Pursuant to MGL c.183A “late charges, fines, penalties, and interest assessed by the [Condominium Trust]” are not subject to Super Lien priority status. There are also special considerations for “Special Assessments” – those assessments which are not in the regularly charged to Unit Owners, such as an assessment to fix a broken-down central air system.

Unit Owner Pays All Attorney’s Fees & Costs Related to Collection of Unpaid Condo Fees

Third, as mentioned above, the costs of collecting unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses can be charged to the Unit Owner—whether owned by the buyer of the Condominium unit or the bank. Therefore, all the attorney’s fees, costs, court filing fees, and related expenses do not need to be paid by the Condominium Trust – they are paid by the Unit Owner who has failed to pay the Monthly Condominium Fees, Special Assessments, or other Common Expenses, the mortgage company, or by the bank that owns the foreclosed property. Given this fact, it highly advisable that Condominium Trustees hire legal counsel to perform the process of collecting unpaid Monthly Condominium Fees, Special Assessments, or other Common Expenses from a delinquent Unit Owner. There are various pitfalls and requirements that must be adhered to throughout the process, but the Condominium Trust itself will be charged little to no attorney’s fees.

Contact a Condominium Attorney at The Jacobs Law, LLC today

If you are a Condominium Trustee and need a lawyer to help collect unpaid Condo fees from a Unit Owner, call The Jacobs Law LLC today. One of our Condo lawyers will discuss the issues with you immediately, and can handle the entire collection process on behalf of the Condo Trustees.