Collecting Common Fees from Developer for Unsold Units

F.D. and D.D. from New London County write:

Dear Mister Condo,

Original developer owns 14 unsold units for 5 years never paid common fees. Can we collect on all 5 years?

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Our condo development is 6 years old. We just formed a Board of Directors which I am on. The developer owes condo fees on 10 unfinished units. How many years can we go back to collect the fees?

Mister Condo replies:

F.D. and D.D., your questions came in a few hours apart and I am guessing regarding the same complex. I hope you don’t mind that I lumped them together. Developer transition issues are a very specific portion of condo law and I don’t mind telling you that I am not an expert in the specifics of the process so I reached out to an attorney who specializes in just such law for an expert opinion. Here’s what the attorney had to say:

“Assuming these units have been formally declared and are therefore part of the condominium, the Association’s lien on those units for unpaid common charges lasts for three years from their original due dates.  This means the Association could foreclose the units to recover the previous three years’ worth of unpaid common charges, but not the ones older than that. Whether the liens would have priority over any mortgage on these units will depend on a number of factors, which could affect the recovery.

The Association could also file a “direct” lawsuit against the developer for common charges which go back further than three years, and then file a new judgment lien against the units and/or pursue the developer’s other assets to collect the court’s award.  This kind of lawsuit is rare in the condominium context since foreclosures are usually so much faster and more effective, but at least one court has held that there is no statute of limitations to pursue old common charges this way.”

Sounds like some great advice. All the best!