Collecting Condominium Fees in Difficult Times

January 1, 2010

Are you a condominium trustee or manager facing unpaid condo fees? Are you facing mounting legal expenses? Are you shocked by the high hourly rates on legal bills from work that has not yielded much of a result? This type of situation is  becoming  all  too  common  for  condominium associations. it is becoming  increasingly  difficult for condominium associations to front their association’s collection legal expenses while they wait for their attorneys to collect from unit owners, tenants, banks and mortgagees. As the unpaid condominium fees pile up, associations are forced to pay even more money to hire an attorney to take legal action in an effort to recover the unpaid dues. Choosing an attorney can be an involved process, requiring the association to review the hourly rates of the attorneys and make sure they are affordable for the association. In certain situations such as bankruptcy, the association may not be able to recover their attorney’s fees and collections costs; thus, it is imperative to outline a budget beforehand. While one may not be able to predict the outcome of a collection case, there are steps an association can take to increase their likelihood of success, especially by avoiding common mistakes.

Common condominium association mistakes

Collecting unpaid condominium fees can be a strenuous task, and for associations that are already struggling under the current    economy, litigation costs can become excessive. However, this is frequently due to associations unfamiliar with Massachusetts’s condominium collection procedures – many pick attorneys blindly. A mistake often made by a condominium association is the hiring of an attorney that is a friend of a trustee or a manager to handle the condominium collection cases. Similarly, it is wrong to assume that a general practitioner will be able to handle condominium collection matters. Seasoned condominium collection attorneys best handle condominium collection cases.

 our firm was recently handed a case that was previously conducted by a general practitioner. The condominium collection matter had been approached in a general collection manner and nothing was collected for over two years. Upon taking over the case, in a somewhat miraculous manner, we were able to follow the Massachusetts super lien process to collect all of the attorney’s fees and all of the collection costs. I say “miraculous” because the super lien statute only gives Massachusetts condominium associations the ability to enforce the super lien for six months of unpaid fees and the associated collection costs.


Following the super lien procedure

as condominium associations face increasingly difficult financial times, it is more important than ever to follow the correct condominium collection procedure. The condominium super lien procedure involves sending the first notice of delinquency once the unit owner has been 60 days delinquent. this notice should be sent to both the unit owner as well as the mortgagee. Some attorneys do not take the time to find and send notices to the mortgagees, which can prevent the association from receiving the monies  promptly.  thirty  days  after  the  first  notice  is  sent, if full payment is not collected, then the attorney sends the second notice of intent to foreclose to the unit owner and lender. thereafter, the complaint is filed at the court and recorded at the Registry of Deeds. The best strategy available to an association that is facing unpaid condominium fees is not waiting longer than the 60 days allotted before the first notice may be sent out, as the super lien statute only allows for six months of unpaid fees after the first notice is sent.

in these difficult economic times, it is important that condominium association attorneys follow all available options under the Massachusetts condominium statute to collect outstanding fees. Examples of such options include rent garnishment, tracking down and serving all mortgagees and servicers with proper notices, and perhaps most notably, following the condominium super lien condominium procedure in a timely fashion. In addition, the current economic situation has significantly increased the number of unit owner bankruptcies and mortgage foreclosures, making it all the more important to timely follow the super lien procedure to place the condominium lien in a priority position. Be it an old cliché, the process of collecting unpaid condominium fees proves that time truly is money.


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