Raising Common Fees to Pay for Condo Owner’s Delinquency

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T.M. from outside of Connecticut writes:

Dear Mister Condo,

If a unit goes into foreclosure, can the Board raise the common fees of the other unit owners to pay for the another unit owner’s bad debt?

Mister Condo replies:

T.M., it is unfortunate, to say the least, when unit owners default on their obligation to pay their fair share of the association’s expenses in the form of their timely payment of common fees and/or special assessments. Common fees are the lifeblood of the association and is how everything from insurance to landscaping and much, much more is paid for. Each year, a budget is developed by the association that projects all of the expenses for the upcoming year and how much revenue (common fees) will be needed to pay for those expenses. So, if one or more unit owners default on those payments, there is a budget shortfall. It’s not like the association can simply stop paying for insurance, snow removal, trash removal, or any of the other services required to maintain the community so they need to go back to the unit owners and reassess the financial position of the association. That may mean taking measures like increasing common fees and/or adding special assessments. Larger associations tend to fare better in this process as the failure of a single unit owner may represent less than 1% of the budget. That same failure in a 10-unit association means 10% of the revenues are missing. That would be catastrophic to the fiscal health of the community and funds would need to be raised amongst the other unit owners. I hope your community gets through its current financial worries. Perhaps, the Board should consider adding a line item for “delinquency” in next year’s budget? Good luck!

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