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One of the most contentious aspects of the relationship between condo associations and residents is the payment of fees. Delinquent fees, non-payment, and other issues related to condo dues have been the source of many disputes and even court cases. However, fees do not have to cause such drastic problems between residents and their condo boards. When both parties understand the basics of condo dues, and specifically their collection and payment, they can cooperate for the betterment of the community. Let LaFountain & Wollman P.C. provide the legal guidance you need.
What Residents Need to Know
Condo association fees are set by the condo association documents you agreed to and signed when you purchased your unit. Typically a condominium trust or similar legal entity is responsible for collecting regular fees. The trust may be self-managed or it may hire (especially in the case of larger condominium neighborhoods) a management company responsible for collecting dues. These entities operate in a similar fashion to HOAs (homeowners associations).
Before agreeing to purchase your condo, you need to understand how much the fees are, when they must be paid, and what they will be spent on. Generally, regular fees pay for community expenses for shared spaces like parking lots, streets, sidewalks, clubs, pools, exercise facilities, common area landscaping, and similar needs. Special assessments (see below) may also be levied according to condo association documents. Condo fees usually do not pay for expenses that are incurred for the interior of your condo, such as an appliance breaking. If you do not understand what your fees pay for, you should consult an attorney before purchasing the unit.
You are legally obligated to pay condo fees according to the association documents you sign. Having a grievance with the board, the management company, or another unit owner does not give you the right to refuse to pay your fees. You will need to take other avenues to address these problems. If you fail to pay your fees, the condo association can initiate collection actions against you. These may include filing a lien that takes priority over your mortgage and even foreclosing on your property.
What Associations Need to Know
Condo association fees are required to be spent on legitimate community needs such as:
- Maintenance of common areas: As mentioned above, these may include sidewalks and amenities like pools. Fees pay for regular upkeep, repairs, and landscaping services.
- Special assessments: These are collected to cover major and often unexpected expenses like significant repairs, improvements, installations, and large community projects.
- Utilities: Condo fees may cover utilities for common areas and shared facilities like water, lighting, and electricity.
- Insurance: Common areas and shared infrastructure need to be insured to prevent major out-of-pocket damages and liabilities. Insurance premiums are often built into ongoing fees.
- Reserves: It’s a good idea for a condo to create and maintain a reserve fund to cover unexpected or future major costs. A portion of condo fees is deposited into a reserve account.
- Administrative costs: Condo fees may be spent on the administration of the community, including by paying a management company.
Associations should be transparent about how much they collect in fees and what they spend the money on. Holding annual meetings, issuing reports, creating budgets, filing financial records, and responding to community inquiries are part of this transparency.
Associations have the right to place liens on condo unit owners if they are 60 or more days delinquent in paying fees. A written notice must be sent to the unit owner that states the balance and allows the owner to pay it within 30 days. If this does not result in the collection of fees owed, a lien will need to be placed on the unit. We can assist with imposing the lien, perfecting it, and (if necessary) foreclosing on the property to help you with fee collection.
Assisting You With All Aspects of Condo Fee Collections and Payments
Whether you are a prospective condo purchaser who wants to know more about paying condo fees or you represent an association that is trying to collect them, we can advise you of your legal rights and duties. It starts with a call to LaFountain & Wollman P.C. Schedule your initial consultation with us today.