Question: I am a trustee for a small condo association. We have four units in total. A couple of years ago, one-unit owner lost his job and was unable to pay his monthly fees. We all liked him and did not take action to recover. Recently, his bank foreclosed, and an investor bought the unit. The new buyer tells me he won’t pay for the couple of years unpaid fees. Don’t we have “super lien” rights as a condo board?
Answer: Small condos see this problem, often. Close quarters can breed close relationships. When one-unit owner has trouble, his neighbors rarely want to pile on. However, by choosing not to sue the unit owner, you forfeited rights to collect all but six months of unpaid fees.
The Mass. condo law provides an automatic lien against the property; however, there are limits to an association’s recovery. A diligent association will notify unit owners and their lenders at 30 and 60 days of delinquency. Most often, the lender will cover the unpaid fees, and deal with the unit owner directly for reimbursement. If a lender does not cover the fees, an association should file suit in the local district court, after six months of unpaid fees.
Simply filing the lawsuit and recording the complaint with the Registry of Deeds will preserve the association’s rights to recover the six months of unpaid fees. Legal fees and costs will also be added to the amount owed. Essentially, an association should do this repeatedly for every six months of delinquency.
Due to the resulting bank foreclosure, and because you did not file a lawsuit – you limited your association’s fee recovery to six months, plus late fees and legal costs. You cannot demand more than this from the unit’s new buyer.
Attorney James Haroutunian practices estate planning and real estate law in Billerica at 630 Boston Road. Contact him to begin an estate plan or with questions at www.hlawoffice.com, 978-671-0711 or email him at firstname.lastname@example.org.