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Condo associations and trustees rely on unit owners to pay their fees so they can continue managing their communities and providing services. While some residents are occasionally late or miss their payments, there are often handfuls of owners who are consistently delinquent with their fees. What legal options do associations have for resolving these cases of chronic non-payment? The real estate attorneys of LaFountain & Wollman P.C. explain what you need to know.
Imposing a Superlien
Massachusetts law allows condo associations or trustees to impose priority liens against owners who refuse to pay their fees. These are also known as superliens because they take priority over most other liens and debts, even mortgages. That means the condo association can be paid before the mortgage company.
To properly impose a superlien, the association must follow a few essential steps. The first is to send the owner a notice by first-class mail after fees are more than 60 days late. The notice must state the delinquent amount and give the owner a chance to correct the problem by paying the fees. If the owner still does not pay and another 30 days pass, then the association can take action to perfect the lien as discussed below. The owner must be notified of this action as well.
Collecting on the Superlien
The mortgage company may choose to pay the late fees so it can satisfy the lien and preserve its priority status. The company can then determine how to collect the money from the condo owner, usually by adding the money that was paid on the owner’s behalf to the outstanding mortgage balance. Meanwhile, if a tenant is currently renting the property, the association might place a lien against the rent payments until the outstanding dues are paid.
But there are situations in which neither the condo owner nor the mortgage company pay the condo association fees. In this case, the condo association will need to file the superlien and ultimately foreclose on the property to collect what is owed. Importantly, the law only allows the condo association to collect up to six months of dues preceding a foreclosure filing. For this reason, the association should not wait to take action once the 60 days of non-payment have passed.
If court action is necessary to perfect the lien and foreclose on the property, the association can also request that the proceeds from the sale be used to pay attorney’s fees, court costs, and interest. Although the condo owner may not be satisfied with how the association is being run, this will not act as a defense to non-payment.
Why You Should Hire an Attorney
If you are a trustee or represent a condo association, we urge you to consult legal counsel to handle chronic non-payment of dues. Remember, the law only protects the dues that were owed in the six months before the foreclosure filing. Since you may have several residents who are late, your association could be entitled to collect a substantial amount of money.
We help condo associations by:
- Negotiating with condo owners to try to collect fees without the need for litigation
- Explaining to condo associations their legal rights and obligations in the event of non-payment
- Taking the condo unit owner to court and representing the association’s interests
- Enforcing court judgments against unit owners
- Providing ongoing legal counsel for this and related matters
Let Our Legal Team Help Your Association
Retaining a condo association law firm can ensure both the continued financial health of your organization and compliance with all applicable laws. Our firm also assists with other legal matters that affect condo associations and their relationships with unit owners. Learn more today by calling LaFountain & Wollman P.C. to schedule your initial consultation.