{"id":179,"date":"2010-06-24T16:30:47","date_gmt":"2010-06-24T16:30:47","guid":{"rendered":"http:\/\/blog.topbev.com\/?p=179"},"modified":"2010-06-24T16:30:47","modified_gmt":"2010-06-24T16:30:47","slug":"new-condominiums-more-traps-for-the-unwary","status":"publish","type":"post","link":"https:\/\/blog.topbev.com\/?p=179","title":{"rendered":"New Condominiums–More TRAPS for the unwary"},"content":{"rendered":"

It is starting to happen again. Just like it did in the late 1980’s and early 1990’s. Condominiums are in financial trouble, I have previously written a Featured Post about delinquent condominium Unit Owners and what Trustees MUST do to collect common area fees from them.<\/p>\n

A similar, but potentially much more serious, situation obtains with the Condominium developer. As most of you probably know, as soon as the Master Deed is recorded, each Unit in the recorded document must start paying common area fees. There is some question whether each Unit needs to contribute the required amounts to the reserve account. That varies from state to state. Let’s just stick with the fee for each Unit for operations.<\/p>\n

The law is that the developer must pay condominium common area fees for his unsold Units. I am afraid that this requirement is “more honored in its breach than in its observance”, as the Bard would say. Cash flow is generally tight for new developers, and they perhaps cannot afford to pay. They can deliver a Certificate at the closing, indicating that the common areas fees are paid with respect to the Unit which is being purchased. It may well be a different story for the unsold Units.<\/p>\n

My suggestion in this area is that the real estate professionals representing the BUYER need to be militant. Place a provision in the Purchase and Sale Agreement or Rider where the SELLER makes an affirmative statement that the common area fees for all Units owned by the SELLER are current. Require the SELLER to demonstrate that fact at the closing by bringing a Condominium Bank Statement which\u00a0\u00a0proves that payment has been made.<\/p>\n

Once the SELLER understands that there will be no closing without everything being current, there will be a great incentive to make matters right. The numbers can really “explode” unless some approach is taken to require the developer to keep up the monthly payments. It is not a pleasant situation for a new BUYER to walk into a situation where there are financial problems at day one. All of us need to work hard to try to prevent this.<\/p>\n

If you are looking for suggested P & S language for these situations, please contact me at etopkins@topbev.com<\/a>. I am a Massachusetts real estate attorney, but I am reasonably confident that the language I have developed will hold up in other jurisdictions, as well.<\/p>\n","protected":false},"excerpt":{"rendered":"

It is starting to happen again. Just like it did in the late 1980’s and early 1990’s. Condominiums are in financial trouble, I have previously written a Featured Post about delinquent condominium Unit Owners and what Trustees MUST do to collect common area fees from them. A similar, but potentially much more serious, situation obtains … Continue reading New Condominiums–More TRAPS for the unwary<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[144],"tags":[69,70,71,60,129],"class_list":["post-179","post","type-post","status-publish","format-standard","hentry","category-condominium","tag-common-area-fee","tag-condominium-buyers","tag-condominium-trustees","tag-condominiums","tag-developers"],"jetpack_featured_media_url":"","jetpack-related-posts":[{"id":144,"url":"https:\/\/blog.topbev.com\/?p=144","url_meta":{"origin":179,"position":0},"title":"Condominium Operations–It’s Time for a Change","date":"June 23, 2010","format":false,"excerpt":"Over the years, I have had many opportunities to become part of the Condominium process. I have drafted Condominium Documents, both conversions and new projects. I have\u00a0closed literally thousands of mortgage loans, which involved either Condominium purchases or refinancing. I have also represented Buyers and Sellers of Condominium Units of\u2026","rel":"","context":"In "Condominium"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":190,"url":"https:\/\/blog.topbev.com\/?p=190","url_meta":{"origin":179,"position":1},"title":"Difficult Condominium Trustees and Officers–The Enemy Down the Hall","date":"June 24, 2010","format":false,"excerpt":"Recently. I have experienced difficulty in dealing with Condominium \"management\", so-called, with respect to matters which involve my clients. I am a Massachusetts title and real estate attorney, and in the course of my representing both Buyers, Sellers and current\u00a0 Unit Owners of condominiums in Massachusetts, I have experienced an\u2026","rel":"","context":"In "Condominium"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":175,"url":"https:\/\/blog.topbev.com\/?p=175","url_meta":{"origin":179,"position":2},"title":"Delinquent Common Area Fees–The Only Policy is ZERO TOLERANCE","date":"June 24, 2010","format":false,"excerpt":"It was the late 1980's. Condominiums in Massachusetts were literally going \"broke\" because unit owners were not paying their common area fees. That meant that water bills and common electricity bills were not being paid. The towns and utilities tried to work with the Trustees to the extent they could.\u2026","rel":"","context":"In \"actions by trustee\"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":264,"url":"https:\/\/blog.topbev.com\/?p=264","url_meta":{"origin":179,"position":3},"title":"Massachusetts Condominiums Should have Websites–It outta be the Law","date":"June 30, 2010","format":false,"excerpt":"Condominiums in Boston, Massachusetts and surrounding towns come in all shapes and sizes. There are a plethora of 2 and 3 Unit condominiums, former personal\u00a0properties where the owner usually lived in one of the apartments, and rented out the other apartments to family or third parties. These \"Mom and Pop\"\u2026","rel":"","context":"In "Condominium"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":415,"url":"https:\/\/blog.topbev.com\/?p=415","url_meta":{"origin":179,"position":4},"title":"That Old Stand-By “The Condominum Conversion”—Some “how to” Steps for a Real Estate strategy that Still Remains Viable","date":"July 12, 2010","format":false,"excerpt":"Even in today's distressed real estate environment, there are times where a condominium conversion makes sense. I have been working on condominium conversions for more than twenty year. There follows a short summary of the process, with the thought that condominium conversion may make the best sense for your multi-unit\u2026","rel":"","context":"In "Condominium"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":152,"url":"https:\/\/blog.topbev.com\/?p=152","url_meta":{"origin":179,"position":5},"title":"Review of Condominium Financial Statements and Operations–Some Guiding Principles","date":"June 23, 2010","format":false,"excerpt":"One of the functions of an attorney representing a Buyer of a Condominium is to review the financial statements and operations\u00a0of the Condominium, as well as the constituent condominium documents such as the Master Deed and the Condominium Declaration of Trust. In a future post, I will delineate what I\u2026","rel":"","context":"In "Condominium"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=179"}],"version-history":[{"count":4,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/179\/revisions"}],"predecessor-version":[{"id":699,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/179\/revisions\/699"}],"wp:attachment":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}