Insurance Money Used By Board for Common Fee Delinquency

N.K. from Hartford County writes:

Dear Mister Condo,

The building insurance paid out a claim due to a water leak from pipes. The board kept part of the money assigned to my unit due to unpaid common charges, I cannot find in the by-laws where it says they can do this. Is this legal? What are my options?

Mister Condo replies:

N.K.,

I am sorry that you find yourself in a situation where you have unpaid common charges. I am also sorry to learn that you had a significant enough loss that an insurance claim was necessary. I am not an attorney so I checked with a friend who is an attorney to see what advice might be offered to you. Here is what the attorney had to offer:

“Generally the law allows anyone holding money for someone else to “set off” debts owed before paying over the rest.  There is probably nothing in your bylaws about this, so you would need to talk to a lawyer about how this legal principle applies to the specifics of your situation.”

So it looks like your association may have been well within their rights even if your by-laws are silent on the subject. That being said, I think you are well advised to seek legal counsel if you feel you have been wronged. On the positive side, I am guessing you are no longer in arrears with your common fees. It would be proper of you to keep them current as the association relies on you and all of your fellow unit owners to pay your fair share of the common fees so that they can conduct the business of the association. All the best!