What Should You Do When A Condominium Owner Fails To Pay Fees
Wednesday, July 22, 2015 at 11:43AM
Jack DiNicola

As anyone that has lived in a small condominium building knows, your relationship with fellow unit owners can have a significant impact on your daily life.  Accordingly, condo associations or trusts are placed in a difficult situation when one unit owner stops paying his or her regularly assessed association fees.  Particularly for buildings with a limited number of units, unpaid condo fees can quickly affect the condominium association’s finances, and its ability to properly maintain the common areas of the property.  Fortunately, Massachusetts law offers protection to condo associations when a unit owner fails to make regular payments.

Under Massachusetts General Laws, c. 183A §6, condo associations are granted a lien against the unit when a unit owner fails to pay his duly assessed condominium fees.  This lien is a legal right in the property, similar to the lien that accompanies a mortgage transaction when a mortgagor is lending money for the purchase of real estate. Importantly, the lien created under § 6 is a “priority lien,” meaning that the condo association’s interest in the delinquent-paying unit takes priority over some other liens, such as previously recorded mortgages on the unit.  Massachusetts law further provides that the condo association’s lien against the delinquent unit includes any costs incurred in collecting the fees, such as attorneys' fees.

In a practical sense, this means that, if a unit owner has a mortgage on the unit, which is often the case, and the lender is notified that the unit owner is delinquent in paying his or her condo fees, the lender will usually step in and pay the delinquent condo fees, along with any legal fees or other costs incurred by the condo association in pursuing collection of the delinquent fees in order to remove the condo lien and regain it's priority.  Unfortunately, the condo association’s lien is only given priority with respect to the first 6 months of delinquent fees, so it is beneficial for the condo association to take swift action when a neighbor falls behind on payments. 

Even if the unit owner does not have a mortgage on his unit, the condo association is not without remedies.  The owner of a unit without a mortgage presumably has a substantial amount of equity in the property.  The condo association’s lien on the property can be used to seize and auction the property to pay off the delinquent fees and costs of collection, if the unit owner fails to pay the delinquency.  More often than not, a unit owner will pay what is owed rather than see his unit seized and sold at a sheriff’s auction.   

In summary, there are several steps that a condo association can take when faced with a non-paying unit owner.  Because of the protections afforded by Massachusetts law, the condo association can often compel payment of the delinquent fees, along with any costs incurred by the association in pursuing the delinquency.  For more information, or to speak with an attorney regarding assistance in pursuing a delinquent unit owner, please contact Attorney Michael Brangwynne at mike.brangwynne@dsu-law.com or on the phone at (857) 250-0446.

Article originally appeared on DiNicola Seligson & Upton (http://dsu-law.com/).
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