Tag Archives: Common Fees

Purchase of Lien and Foreclosure Rights on Delinquent Condo Owner

S.A. from South Florida writes:

Dear Mister Condo,

Can an individual purchase the lien and foreclosure rights on a delinquent condo unit? Second, is there a situation where a condo association can foreclose and take possession without going through the auction process? The unit in question has no mortgage and the owners have abandoned the unit. Sorry, one more question, is it the responsibility of the Association to keep the electric on if the unit is abandoned, to protect the neighbors from mold. This is a South Florida condo association.

Mister Condo replies:

S.A., those are all great questions. As you know I am not an attorney and offer no legal advice in this column. You should likely check with one of the many fine community association law forms in your state before taking any actions listed in your question. Let me offer the following friendly advice. Delinquent condo owners, even those who abandon their units have rights, both from the association’s governing documents and state law. If the unit owner is amenable to any of the methods of disposal for their unit as you have outlined, I can’t imagine there being a problem. However, it doesn’t sound like the unit owners are even around to agree with any proposed disposal of their unit. This is where the lawsuits typically begin and the process of foreclosure gets under way. Typically, a unit owner would offer a defense to the action of foreclosure. However, if the legal papers are served and they choose to simply ignore them, the process continues. If the association follows the law, there should be no problem. As far as an individual purchasing the lien and foreclosure rights in order to take possession of the unit, I would personally have a problem with that. The association is the aggrieved party. They should be the recipients of the proceeds from proper resolution of this matter. However, I am not aware of any law that forbids this. Once again, I would suggest speaking with the association attorney about the legality and proper filings. If the attorney says “yes” and you have a willing and able buyer, I would think it would expedite the process and save the association a good bit of time and money. They key to either of these transactions is making sure the association doesn’t violate any of the unit owner’s rights. Otherwise, multiple lawsuits could ensue. Please check with the association attorney before taking any action.

As for the electric that the association needs to decide whether or not to keep on, my guess is that they should be able to charge back the cost of any electric to the unit and make it part of the lien. Again, the expense of the electric service likely outweighs the potential damage that could be caused by mild so the best business judgment rule should allow the association to make that decision. Even if they can’t collect on the electric cost, that amount should be paltry in the overall scheme of things. All the best!

Condo Unit Owner Seeks Approval for New Air Conditioning Unit

C.L. from Massachusetts writes:

Dear Mister Condo,

I live in on the top floor of a 30-unit Condo just outside of Boston. The building is actually two, 3-story 15-unit buildings facing each other across a nicely landscaped courtyard. There is a paved back alley behind each building separating the building from other single and multi-family homes. The alleys are used for trash and recycling, as well as a couple bike racks.

I’m looking to install a mini-split a/c unit and am having difficulty getting my condo board to approve the installation of the outdoor compressor unit. I’ve suggested placing the unit on our flat roof, working with our roofing contractor to ensure that the installation would not harm the roof, nor void the roof’s warranty. Our Condo board rejected that because they claim that historically the board has not allowed for the use of the roof and did not want to set a precedent for other requests to the use of the roof.

I also suggested installing in the back alley (used for trash, recycling, bike racks and a couple outdoor grills). They rejected that idea because of a noise concerns and the setting a precedent for future requests for a/c compressors (and tripping over it, but that seems so laughable it’s hard to even retype it).

Any ideas how other condo associations deal with mini-split a/c compressors either on the roof or in non-landscaped, back alley space? Suggestions on how to present the value of mini-split a/c (more efficient, cheaper, better functioning and quieter than window units) to our board? Thanks for your advice!

Mister Condo replies:

C.L., “we’ve always done it that way” is a very common response to proposals from unit owners as to why their request is denied. Additionally, the Board has to deal with future requests that will cite your variance as an example of why they need to approve further modifications. It is a sticky wicket at best and the Board is well within its rights to refuse any building modification that wasn’t part of the original specification of the property, meaning technologically advanced and advantageous upgrades such as your mini-split A/C compressor will very likely be rejected by the Board. Not because it isn’t useful or chock full of benefits but because it causes a change to the architectural look and feel of the association. That is a Pandora’s Box the Board is wise to avoid unless they want to deal with other such requests in the future. I have no data to share regarding how other Boards handle similar requests but I will say that it does depend on the mood and composition of the Board. In other words, if you have tried and true Board members who are used to saying “No” to requests that modify the look of the association, I wouldn’t expect them to suddenly start singing a different tune. If there are enough owners who agree with your proposal, it may mean getting them on to the Board where they can do something about it. Understand this, though, while your proposal seems harmless enough and will yield cost saving and other benefits, that is not the duty of the Board. There charge is to protect and maintain the association. Enhancements are often the hardest thing to sell to the Board. Enhancements that change the look or use of common elements are often defeated. Good luck!

Unapproved Remodel to Upstairs Condo Damages Downstairs Unit

L.S. from outside of Connecticut writes:

Dear Mister Condo,

The question I have is this, I live in a condo that has 4 units per bldg. I own mine. These condos were built in the late 50’s maybe early 60’s. Unfortunately, there is an HOA fee of 150 dollars a month and the outside of the buildings look horrible. They really need to be painted and new front and rear doors placed. The front porch is falling apart. The condos were not built like the newer ones are. Someone purchased the upstairs condo and decided that they would remodel the whole condo. There was a wall removed and other major repairs without a permit that has caused damage to my condo. I spoke to a contractor who looked at the damage and informed me that if we were to try to fix it, it would cause more damage. The upstairs condo would receive damage also. I am just wondering who should pay for the damage. The owner knows that there were issues and he wanted his handy man who caused the damage and himself to look at it. I am not sure what good that would do. Should I file a claim with my insurance company and let them fight it out or is there another way to deal with this? Am I going to be stuck with a huge bill?

Mister Condo replies:

L.S., you certainly have a lot going on inside your 4-unit building. Let me address each item separately. First up, the HOA isn’t maintaining the property as they should. There is no reason for painting to go undone other than there is no money in the Reserve Fund for the project. You mention a fee of $150. If that fee isn’t enough to cover operating expenses and set aside money for routine maintenance like painting and door replacement, there will need to be a Special Assessment and/or an increase to common fees. Neither option is popular but that is the only way to get the association back on track so it can fulfill its duty to maintain the building exteriors.

The remodeling project is another issue entirely. It sounds like the upstairs unit owner did some unauthorized and unpermitted work on their unit causing damage to your unit. It’s time to speak with an attorney about suing the unit owner for the damage. You should file a claim with your insurance if you have suffered financial damage worth filing a claim over. However, the fault is clearly with the unit owner who did the unauthorized remodel. You governance documents likely spell out what types of repairs and improvements can be made to unit interiors. If they knocked down a supporting wall, you could be looking at a very expensive repair, not to mention the potential danger you are in. I would want to get this taken care of immediately. If they are amenable to correcting the problem at their expense, you may not need to sue but, in my experience, once the dollars start adding up, a lawsuit is almost inevitable. You should be able to recover your damages though and I am hopeful that your upstairs neighbor will do the right thing. Good luck!

Withholding Repairs to Delinquent Condo Unit Owner

M.B. from outside of Connecticut writes:

Dear Mister Condo,

Can a condo board withhold unit repairs to an owner who is delinquent?

Mister Condo replies:

M.B., that is a loaded question with lots of possible answers! Since I am not an attorney, I must recommend that you speak with a qualified community association attorney from your area to determine if withholding repairs is within the association’s rights. Typically, my answer would be that the association has a duty to upkeep and maintain all common elements as they are property of the association and not the individual unit owners. The association’s governance documents clearly state what is the association’s duty to maintain. This would usually include parking lots, landscaping, amenities like pools, sidewalks, roofs and building exteriors. Now, if a unit owner became delinquent in their common fees and needed a roof replaced over their unit, the association would still have to maintain that roof because they own it, not the individual unit owner. Failure to maintain a common element would be akin to cutting off your nose to spite your face. It will still need to be done whether the unit owner living under that roof is delinquent or not. I think the more important question here is what steps the association CAN take to either bring this unit owner up to date with fees or force a foreclosure where by the association evicts the unit owner, and, hopefully, replaces the unit owner with a dues-paying owner. If you haven’t already done so, consult with your association’s attorney and make sure the proper steps are being taken. Good luck!

Condo Operating Expense Versus Reserve Charge

J.N. from Fairfield County writes:

Dear Mister Condo,

When is an operating expense really a Reserve Charge?

Mister Condo replies:

J.N., typically speaking, operating expenses are those expenses which are incurred during the regular course of business during a calendar year for the association. There are exceptions, of course, as there are some expenses that recur at intervals outside of the calendar year that are still operational in nature. Reserve Charges, on the other hand, are quite specifically collected and deposited in the Reserve Fund. Additionally, many associations have specific Reserve Fund components, meaning funds are collected in Reserve for the roof or the parking lot or the buildings or the pool and tennis courts, and so on. These funds should not be mingled with Operating Funds, which further help to identify them as Reserve Charges. If your association is doing something else when collecting Reserve Charges (paying insurance bills or management fees, for instance) then they are not handling Reserve Charges correctly and could find their use of these funds questioned by a concerned unit owner like you. Hope that helps. Good luck!

Condo Lawsuit Revelation Shouldn’t Cause Issue for Selling Owner

J.P. from New York writes:

Dear Mister Condo,

I am planning to sell my condo soon. One of my fellow owners is deeply behind on HOA fees. There’s a law suit pending. I’m told this could hold up my selling. I’m in Brooklyn. Any help would be greatly appreciated!

Mister Condo replies:

J.P., I am sorry that your association is dealing with a delinquent unit owner. While lawsuits against the association might cause a potential buyer for your unit to shy away from the deal, a lawsuit initiated by the association against a delinquent unit owner should not. The association’s only risk here is that the unit owner doesn’t pay in timely fashion. The association’s risk is relatively low, seeing as they have a lien against the unit owner in arrears. It is a requirement that lawsuits that the association is involved in must be disclosed to a potential buyer, I don’t see where this suit should make them change their mind about purchasing your unit. This type of lawsuit is quite common and almost always won by the association. Good luck!

Condo Board’s Ability to Make Capital Improvements Without Unit Owner Vote

R.J. from outside of Connecticut writes:

Dear Mister Condo,

I am living in a condo where the condo board has decided that we’re getting the decks enlarged. They claim “everyone wants this done,” but no such formal vote of the unit owners was ever taken. I know that a number of unit owners do not want larger decks and most certainly do not want to pay for them. Our responses fall on deaf ears.

First, we can push for an actual unit owner vote on this matter and may need to hire an attorney to make sure such a vote is taken. BUT, since this is not a matter of “maintenance,” as in necessary repairs, nor are the back decks uniform now by any means (because of the topography of the land) should those of us who do not want larger decks be forced to have them and forced to pay upwards of $10,000 each for them? Even if they get a majority vote, this does not seem fair, nor is it in the bylaws that an optional aesthetic improvement must be paid for by everyone – as it does for repairs or common ground improvements.

Mister Condo replies:

R.J., this is an interesting problem. Board Members are elected to office by democratic election of unit owners. Yet, they are taking action that a number of unit owners do not want taken. The real question here is: What do the majority of unit owners want and what do your by-laws state about this type of improvement? Depending on your by-laws and any state or local law dealing with common interest communities, the Board is likely within its rights to consider this deck enlargement program. They may even have the ability to enact it, again providing the action isn’t in violation of the condo documents. However, they do have to follow all protocols as outlined in the documents or, as you correctly state, disgruntled unit owners will hire an attorney to bring action against the Board. Many associations would require a vote of the unit owners for such an improvement because the Board is considering such a major expense. Replacing worn common elements is one thing; creating new common elements is quite another. You are on the path to getting the right action. Also, consider getting some like-minded folks on the Board during the next election cycle. If it can’t wait, and you think you have the votes to hold a recall election, you could attempt to recall and replace these Board members. However, if the majority of unit owners are in agreement with the deck expansion and improvement project, your efforts may generate little less than a thorn in the side of the Board as they continue to push the project through. Good luck!

Can the Condo Association Issue Fines and Fees for Unpaid Condo Fines and Fees?

M.D. from Illinois writes:

Dear Mister Condo,

Can the Association impose fines for unpaid late fees, fines, etc., if they are not paid within a certain time period? For example, we have a few owners who have refused to pay late fees and fines, going back several months. Association wants to come up with a rule to impose a $25 fine per month to all individuals who don’t pay their dues (late fees, fines, etc.) within 3 months.

Mister Condo replies:

M.D., as long as the condo documents support the fines being levied and there are no state or local laws to the contrary, the association is allowed to collect fees and fines when monies owed are not paid on a timely fashion. In fact, the whole concept of fines and fees is the only power the association has to protect itself from non-payment of fees it is owed, short of taking very costly legal action against any delinquent unit owner. The motivation to the unit owner is to not get himself or herself in arrears with the association. Common fees are the lifeblood of any association. All of the common expenses are paid from these fees. When they don’t materialize on time, associations ca find themselves strapped for operating cash to pay the bills of the association. These bills are for services that directly, or indirectly benefit the unit owners. Why should they be allowed to not pay their fair share in the same timely fashion that all of the other unit owners are paying. By paying late, they are actually creating a burden on their fellow unit owners. The fine system is designed to keep the payments coming. If those payments are tardy, even late fees and fines, the association needs to continue to motivate them to pay on time. The fine system allows them to do just that. Honestly, these unit owners simply need to get caught up and not fall behind again. All the best!

Right to Inspect Condo Employees’ Salaries and Benefits

B.B. from Fairfield County writes:

Dear Mister Condo,

Do the unit owners of a condo village in Connecticut that pay the salaries of their employees through their common charges have the right to know what the salaries and benefits of those employees are? We do not have a management company. We have our own manager and maintenance department, and office staff.

Mister Condo replies:

B.B., the answer is “yes and no”. The employees of the association work for the association, not the individual unit owners. The democratically elected Board of Directors has full access to all of this information and acts as the employer in this situation. Technically, all association records can be inspected by individual unit owners but the private information of the employees cannot be disclosed due to privacy and security concerns. That being said, you can inspect the budget which should have line items for salaries and benefits. While your common fees are used to pay their salaries, this is no different than saying your taxes pay the salaries of city employees. As a taxpayer, you have no right to inspect individual city employees’ salaries or benefits. The same concept is in play here. You have had a say in the election of the Board members, whose duties include all business functions of the condo. In this case, that includes keeping an eye on the salaries and benefits of the association’s employees. All the best!

Does Condo Basement Owner Have to Pay Common Fees?

J.J. from outside of Connecticut writes:

Dear Mister Condo,

I own a Basement in a condo unfinished, no electric plumbing just a concrete box for storage. Do I need to pay common charges? Is the board able to make me pay?

Mister Condo replies:

J.J., when you say you own a basement in a condo that is unfinished, I first have to ask how that is possible. You don’t own a unit in the condo as well? Is the basement a unit? Without knowing a bit more information, let me give you the best answer I can with what you have provided. Ownership in any condominium means ownership within the association. If you won any real estate that is part of the association, then you have a common interest in the overall association and you need to pay your portion of the expenses in the form of common fees. So, yes, if you own a basement within an association, you are a member of the association and you have to pay common fees. Hope that helps. Feel free to write back with more details so I may be able to give a more thorough answer.