Recently, a client of mine contacted me with a problem. He was the sole Trustee of a six unit condominium in Massachusetts, where I practice as a title attorney with over 40 years of experience. It seems that one Unit Owner had not paid common area fees for more than a year (believe it or not) and the Condominium was starting to feel the effects of the delinquency.<\/p>\n
After chastising my client for waiting so long to get in touch with me, I went to work. Initially i sent a demand to the Unit Owner. As expected, this was ignored. My next course of action was a title search to determine the name of the Unit Owner’s mortgage lender. Once this was determined, I notified the lender of the large delinquency, including penalties, late fees and my fees, again to no avail. Finally, i pulled the trigger with the “silver bullet”–a complaint against the Unit Owner with notice that a foreclosure sale would soon take place to obtain funds to liquidate\u00a0the outstanding indebtedness.<\/p>\n
In Massachusetts, as well as most other jurisdictions, the amount owed for common area fees, when properly handled, constitutes a “super lien”, ahead even of\u00a0the first mortgage. When the lender was notified of the fact that our law firm was taking the “super lien” step, they contacted me, asked how much the total outstanding indebtedness was and sent us a check for the total amount due, plus attorneys fees.<\/p>\n
There are some great results which were realized by this exercise:<\/p>\n
\u00a0\u00a0\u00a0\u00a0 1. The Condominium got every penny that was due.<\/p>\n
\u00a0\u00a0\u00a0\u00a0 2. The Condominium did not have to pay our law firm any fees for services. These were paid by the lender, as part of their steps to remove the “super lien”.<\/p>\n
\u00a0\u00a0\u00a0\u00a0 3. In future Questionnaires from othr lenders, the Condominium does not have to indicate a large receivable from a delinquent Unit Owner. Such disclosure often impeads getting a Condominium cleared for future mortgage loans.<\/p>\n
There are some holes here, too. If the Unit Owner continues not to pay, future actions will need to be commenced. That will leave the Condominium with a 60 day or so shortfall on common area fees. On balance, however, the Condominium’s financial position has been much enhanced by the actions we have taken, and I would urge any of you who have this type of problem in buildings you manage, or are attempting to complete sales transactions, to contact knowledgeable counsel immediately to get the Condominium on this sure-fire collection course.<\/p>\n","protected":false},"excerpt":{"rendered":"
Recently, a client of mine contacted me with a problem. He was the sole Trustee of a six unit condominium in Massachusetts, where I practice as a title attorney with over 40 years of experience. It seems that one Unit Owner had not paid common area fees for more than a year (believe it or … Continue reading The Collection of Unpaid Common Area Fees–A Success Story with Legs<\/span>