Tuesday, February 7, 2012

Dealing With Delinqent Owners

Hard Times

It is something that we see all to often in this economy, owners who fall behind on their condominium dues. In any association, if even ONE owner becomes delinquent, the condo can face an operational shortfall that forces trustees and managers to face tough situations. This is an unfortunate reality for many condo owners in Boston and around the country. You may not realize it, but when your neighbors stop paying, it is you who picks up the slack financially!

Early Warning

The best way to deal with a delinquent owner is with constant communication and a plan. Your accounting department and managers need to be reviewing payments monthly and ensuring everyone has paid. Make sure you have a policy in place that late fees are charged to anyone more than 15 days late on a payment. After that point, send reminder/warning letters and document all communication. Owners need to understand that dues are not optional and not paying can greatly decrease the value of the whole association.


If warnings and late fines do not bring in payments, you need to retain legal council. At our firm, if payment has not been submitted with 60 days, and every effort has been made, we turn the unit over to collections. This 60 day mark is extremely important in ensuring the association can recoup on these funds, thanks to the "Condo Super Lien Bill". Under this law, condominium associations can enforce a lien against condo owners who fail to pay their condo fees. The lien for these unpaid condo fees, as well as attorney’s fees and the cost of collection, have priority over the first mortgage. In order to achieve priority; however, the statute requires that the owner and first mortgagee (i.e. the bank/lender) be provided with a notice once the fees are 60 days delinquent. If you fail to provide this notice, you run the risk of losing the ability to recoup those

No Exceptions!

While it is unfortunate that this topic is so relevant today, it still needs to be discussed. Without the proper plan set up, managers and trustees are in danger of harming the association. Remember, there are no exceptions! If someone falls behind you have to stick to the plan. At the end of the day, a condominium is a business and it needs proper cash-flow to run. Your neighbors may be your friends and you may sympathize with their situation, but the proper steps need to be taken to protect the condominium.
If you have any questions about this, please do not hesitate to contact us. We would be happy to answer any additional questions you may have. Premier Property Solutions, LLC is Boston's premier property management firm.

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