Tag Archives: Common Fees

Identical Square Footage But Higher Monthly Condo Common Fees

K.G. from Michigan writes:

Dear Mister Condo,

I recently found out that a same size condo as mine is being charged less per month in monthly fees. HOA indicated they charge by the square footage which are on the original plans. I reviewed the plans and the square footage is the same. I have requested in writing, why I am paying a higher price. HOA has not responded. I don’t know where to go from here. Thank you.

Mister Condo replies:

K.G., while square footage is often taken into consideration when determining common fee schedules, it is not necessarily the only factor. When the common fee schedule was created by the developer, other factors such as view, preferred location within the community, end-unit, first-floor unit, and many other items may have been taken into consideration. Whatever the reason, a common fee schedule was developed and a fee percentage was assigned to each unit. Those fees are the gospel of how expenses are divvied up within the association and each unit has an obligation to pay their fees based on that schedule. To simply state that square footage is the only determining factor when common fees were adopted is very unlikely true. You should review the condo governing documents to review how the fees are determined. You will likely find out that your unit was assigned a higher percentage than your similarly sized neighbor’s unit. Perhaps your unit is on a higher floor or has a better view? Whatever the reason, unless you find that you have been charged incorrectly, the common fee schedule stands. All the best!

How Many Month’s Common Fees Can Be Collected in Foreclosure?

B.O. from Fairfield County writes:

Dear Mister Condo,

What is the maximum months of common fees an association can collect in a bank foreclosure? What is the maximum an association can collect when they foreclose?

Mister Condo replies:

B.O., the answer is not as clear as you might expect. The actions taken by the association in advance of the foreclosure can have an effect on the outcome. For that reason alone, many associations turn to either a collections expert or an attorney for assistance in collecting as much as they possibly can. The other variable is the ability of the owner being foreclosed upon to pay. If they file a bankruptcy at the right time, the debt to the association may also be included in the discharge of debt, leaving the association with a claim for which they cannot collect. In Connecticut, there are various liens and lien procedure that seem to have the best yield. There is an evergreen lien that, in theory, ensures the association will collect ALL of the past due fees when the unit is finally sold or auctioned off at foreclosure. This type of lien is filed repeatedly until the unit is liquidated. A more common lien is a 6-month lien. Filed once, the association collects up to 6 months of owed fees and reasonable collection costs. This is quite common when a mortgage holder is involved in initiating the foreclosure action and the association “goes along” with the bank. The bottom line is that banks typically initiate foreclosure far more often than associations do. However, that is not always the case and in a soft real estate market, the bank has little incentive to take over the unit (and the common fee payments and liability of owning the unit) and the association needs to think creatively before foreclosing and finding there is little or no money left for them when the foreclosure is over. I think the best policy is to work with a collection professional or association attorney to make sure the association is doing all that it can to protect itself from the loss of income. The good news is that the vast majority of unit owners pay their fees on time and that the drastic measure of foreclosure only surfaces when all else has failed. All the best!

Snow Removal Responsibility for Condo Limited Common Elements

B.P. from Pennsylvania writes:

Dear Mister Condo,

I live in a condominium HOA. Our documents state that the association is responsible for snow removal in common areas. It specifically excludes driveways, but what about limited common areas such as porches and steps? About half of the units are townhouse types. Do these owners need coverage for accidents that may occur on areas that are not association responsibility?

Mister Condo replies:

B.P., just as your documents define the responsibility of the association with regards to snow removal from the common areas, they likely pass the responsibility of limited common areas to either the owners or the association. If the documents are silent on the subject, the association might want to think about adding clarification for lots of reasons. First and foremost is safety. Regardless of who owns the porches and steps, they need to be kept clear so no injuries occur. As bad as the injuries may be, the resultant lawsuits that will likely follow can be devastating to the association. In my opinion, it makes sense for the association to take on the additional responsibility (and cost) of snow removal. That may cause a slight increase to common fees to cover the increased snow removal expense but it will assure that all was done to keep the porches and steps clear, this reducing the risk of injury and lawsuit to the association. As for the potential liability to homeowners, it is the same risk any homeowner has. If someone gets hurt on your property, you should have insurance to protect yourself. All the best!

Condo Owner Excused from Paying Special Assessment

M.A. from outside of Connecticut writes:

Dear Mister Condo,

When is an owner excused from paying their share of a special assessment?

Mister Condo replies:

M.A., as far as I know, an owner is NEVER excused from paying a Special Assessment once it is levied by the Board. The whole point of a Special Assessment is to collect monies needed by the association from ALL of the association members. As an example, think of a 100-unit association where every unit is assessed 1% as their percentage of unit ownership. If the Board needed to levy an assessment of $100,000 to pay for parking lot repairs, the Special Assessment would equate to all unit owners paying $1000. If the Board were to excuse one or more owners from paying their share of the Special Assessment, they would come up short of the $100,000 needed to repair the parking lot. And what about all of the unit owners who did pay their share of the Special Assessment? I know I wouldn’t be too happy to learn that one of my fellow unit owners didn’t have to pay. In fact, I would sue the association for making an improper assessment. Unless your governing documents specify a situation where a unit owner is excused from paying a Special Assessment (I have never heard of one), there is no excusing of payment of a Special Assessment. All the best!

HOA Turns Off Water on 5-Day Delinquent Owner

B.A. from outside of Connecticut writes:

Dear Mister Condo,

I’m wondering if our Property Management really has a right to authorize disconnection of water in my unit due to unpaid HOA dues (only 5 days overdue to be exact) even if I don’t have an outstanding balance from my water provider. I can say that this is the first time that my HOA dues was paid late because I’ve been paying my dues always 1 year in advance. Hoping for your advice. Thanks

Mister Condo replies:

B.A., I am sorry that your HOA took such a drastic measure as turning off your access to water after you were only 5 days overdue with your payment after having a great track record for so many years. The reality is that every association has its own policies for such things and it would appear that yours is quite strict. As to whether or not they had the right to do so is a legal question best posed to an attorney in your area. My guess is that they tool lawful action and that you aren’t the only unit owner who has had this happen. You can always make a quick call to an attorney to confirm if your rights were abused. Other than that, my advice is to set up auto-payment or prepay as you have done in the past. Common fees are the lifeblood of any association. The association is right to do all that they can to assure they are paid in timely fashion by all unit owners. All the best!

A Top 10 Bad Condo Story! 80% of Unit Owners Don’t Pay Fees!

M.D. from New Jersey writes:

Dear Mister Condo,

How can I get out of a 100-unit condo development where only 20 units pay maintenance and road dues? The association painted over rotten wood siding 4 years ago! They cut what little grass there is every two weeks that’s about the extent of the maintenance for last 10 years. Retaining walls falling down, parking lots are sliding in to the building, the roof leaks with ice build-up and more. Help!

Mister Condo replies:

M.D., I am so sorry for your problems at this poorly run condo association. While I’d like to think I have “head it all” when it comes to condo craziness, clearly you have provided a Top 10 Bad Condo story. Obviously, you want to get out of this poorly run association before the units are condemned or deemed not worthy to sell. The good news is that there is “an ass for every seat” and if you price it right, you just might be able to cut your losses and buy into a properly run association. Without the benefit of a crystal ball, I will make a few predictions about your current association. With 80% of unit owners not paying their fees, the association will collapse. Vendors who are owed money will sue the association at some point. Even unit owners such as yourself could sue the association for not fulfilling its obligation to maintain the common elements. Even one lawsuit could bankrupt the association. If the association is to survive, it would likely be due to receivership (the court appoints an attorney or property management firm to run the association) at which time special assessments would likely be levied and common fees raised significantly. The 80% of unit owners who aren’t paying fees would likely default and eventually lose their homes through foreclosure. The bottom line is that unless you really love your unit and are willing to live through the chaos and expense of such an action, it just isn’t worth sticking around to see how it plays out. If I were you, I would sell as quickly as possible, even at a loss if I had to, and make sure the next association you buy in to is properly run and funded. All the best!

Changing the Condo Common Fee Structure

E.G. from outside of Connecticut writes:

Dear Mister Condo,

What are the ways to realign the condo fees in a condominium building?

Mister Condo replies:

E.G., it is very difficult to change the common fees in most condominium associations, and for good reason. The fees are established when the condominium is formed as part of the condominium’s governance documents. When units are purchased and mortgages are created for individual units, this fee structure is part and parcel of how a unit owner buys into the association. They effectively become a shareholder in the corporation. There are many different formulas for how these fees are arrived at. The most common is the percentage of unit ownership formula. Everyone pays a share of the fees based on their percentage of ownership in the association. However, there are other factors that can contribute to these formulas, including but not limited to enhanced desirability of a unit for factors such as water views, penthouse locations, garage parking, etc.. The bottom line is that the fees are part and parcel of the corporation itself and changing them typically requires 100% of unit owners voting in favor to do so. If you check your condo documents and state law, you will have a better feel for if and how the change can be made. Personally, I advise against it. Everyone who purchased into the association knew what their share of the common fees were before they made the decision to purchase. Changing these fees after the fact is patently unfair and likely unachievable even if allowed by law. All the best!

Developer Obligation to Pay HOA Fees on Undeveloped Lots

C.C. from Hartford County writes:

Dear Mister Condo,

Does a developer of A PUD have an obligation to pay dues on unsold lots once the transition/takeover of board has taken place?

Mister Condo replies:

C.C., an unsold lot is not the same as an undeveloped lot. If the PUD consists of built units, then it is likely that the developer would be liable for the dues from the unsold units. Undeveloped lots, do not likely carry the same burden, especially since they are undeveloped. You would need to check the documents for further clarification but it is uncommon for a developer to pay fees for undeveloped lots. If the association has an attorney (and they should have their own attorney during the transition/takeover period), this is a great question for him or her. Good luck!

Condo Maintenance Fees on Condemned Building

J.B. from Hartford County writes:

Dear Mister Condo,

Can an association charge maintenance fees for a condemned building that has legally been condemned by the city of Hartford because of a fire that caused structural damage?

Mister Condo replies:

J.B., condemnation does not prevent common fees from being charged and collected. Condemnation simply means the building has been deemed unsafe and uninhabitable. The building and the association are still incurring other expenses that are part of the maintenance fees and all unit owners are still beholden to their covenants to pay those fees. I know it seems to fly in the face of reason that maintenance fees are collected on a condemned property but unless the association is dissolved (unlikely), the common fees continue to accrue and the association is entitled to collect. I hope they get the building repaired or rebuilt in timely fashion for you and other unit owners. Good luck!

Condo Owner Surprised by Special Assessment

T.S. from Massachusetts writes:

Dear Mister Condo,

My condo association is planning on replacing all the roofs. We got a letter stating we will have to come up with almost 9,000 dollars or have a monthly increase of 200.00 for 60 months. Can they make us do that? Also, they are having a meeting. In this regards, what questions should be asked at that meeting? I appreciate your help and expertise.

Mister Condo replies:

T.S., owning a condominium is kind of like being a partial owner of a business. From time to time, business decisions need to be made about how to protect and maintain the business. In this case, it would appear that an insufficient amount of common fees has been collected for many years, resulting in a deficit when it came time to replace the roofs. The correct procedure would have been to have had higher monthly dues for the many years leading up to this now needed roof replacement. The Board can and must replace the roofs or they may subject unit owners to damage and worse. There is only one place where this money can come from – the unit owners. So, a special assessment has been levied to cover the cost of the roofs. You and your fellow unit owners now must decide if you can afford the one-time payment of $9,000 or if you would rather pay an extra $200 per month for 60 months, totaling $12,000 per unit. I know if it were me, I wouldn’t want to get stuck with an extra $3000 in interest for what amounts to a $9,000 loan but not all unit owners will be able to easily come up with the $9000 and I expect many will take the $200 per month option. As for what you should ask at the meeting, I would want to know what other special assessments lie ahead and how soon. Chances are if they didn’t have enough money in the Reserve Fund to pay for the roof, they might not have enough for other association-owned items. Siding for the buildings? Pool and club house? Tennis Courts? What other expenses are coming up? It is quite possible that the roofs are just the tip of the iceberg. Ultimately, you would like to see a Reserve Study and funding plan introduced to the community so as to avoid these special assessments in the future. All the best!