Condos Are Subject to M.G.L. ch.183A
Every Condo 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. Condo 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 Condo Fees and Special Assessments. Condo 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 Condo. As a result, the vast majority of Condo are run and managed by Unit Owners elected as Trustees.
Unpaid Condo Fees Can Be Collected
When a Unit Owner fails to pay Monthly Condo Fees, Special Assessments, or other Common Expenses it can become a serious financial burden on the Condo “Trust”. However, MGL c.183A gives Condo Trustees significant power and authority to collect unpaid Monthly Condo Fees, Special Assessments, or other Common Expenses from delinquent Unit Owners. The problem for many Condo Trustees is that they don’t know what their options are or how to properly collect unpaid Monthly Condo Fees, Special Assessments, or other Common Expenses from a Unit Owner. The process becomes a bit more tricky as well when a Condo unit is in foreclosure or bank-owned.
The Jacobs Law, LLC assists Condo Trusts and Trustees with collection of delinquent Monthly Condo 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 Condo Trust has what is called a “Super Lien” on a Unit Owner’s Condo unit for Monthly Condo 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 Trustee 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 Condo unit – which means that the Condo Trust can force the foreclosure of a Unit Owner’s Condo unit for unpaid Monthly Condo Fees, Special Assessments, or other Common Expenses. Due to this fact, the mortgage company will regularly pay the outstanding Condo expenses due to avoid having their mortgage lower on the priority list. Banks that own a foreclosed Condo unit, or one that has been abandoned, will generally work with the Condo Trust’s attorney to pay past due Monthly Condo Fees, Special Assessments, or other Common Expenses as well as the legal fees and costs charged to collect the unpaid amounts.
Second, not ALL fees assessed by the Condo are eligible for Super Lien priority status. Pursuant to MGL c.183A “late charges, fines, penalties, and interest assessed by the [ Condo 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 Condo Fees, Special Assessments, or other Common Expenses can be charged to the Unit Owner—whether owned by the buyer of the Condo 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 Condo Trust – they are paid by the Unit Owner who has failed to pay the Monthly Condo 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 Condo Trustees hire legal counsel to perform the process of collecting unpaid Monthly Condo 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 Condo Trust itself will be charged little to no attorney’s fees.
Contact a Condo Attorney at The Jacobs Law, LLC today
If you are a Condo Trustee and need a legal counsel to help collect unpaid Condo fees from a Unit Owner, contact The Jacobs Law LLC now. 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.