As it stands now, when delinquent condominium owners fail to pay their association fees or dues, there’s little the condo association can do to recoup them.
House Bill 1340, which is sponsored by Rep. Will Infantine, R-Manchester, would allow condo associations to collect six months of delinquent fees off the top of a unit’s sale. It would not include any late fees or assessments. The state House of Representatives passed the bill earlier this session. The measure is now in the hands of the Senate Commerce, Labor and Consumer Protection Committee.
“It is a step forward,” said Rick Meier, of the Rolling Green Condominium Owners Association.
In a recent much-publicized incident at the Sheperd Hill condominium complex in Hudson, a judge ruled to allow the condo association to place Jersey barriers in front of a delinquent resident’s condo as a way to take away services. Association fees pay for a variety of services depending on the particular development, including snow removal, landscaping and general maintenance.
Current state law allows all members of a condo association to go after delinquent members by suspending common services. It also allows the association to have rent paid directly to the association in the case of a delinquent owner renting out units, Meier said. According to reports, it is common for owners to be responsible for condo fees rather than whoever is renting the unit.
In the Shepard’s Hill incident, the tenant is not the owner and neither the tenant nor the owner had paid condo fees for nearly two years. Blocking the driveway was probably the only leverage the association had. Taking away a delinquent owner’s tennis privileges usually doesn’t get the job done, Meier said.
Currently, when people stop paying condo fees, a condo association doesn’t have much leverage. They can try to put a lien on a condo owner. The mortgage always takes precedence, however, along with any outstanding taxes. Once foreclosure happens, banks are not responsible for paying the prior condo fees, Meier said.
“You can’t collect from the tenant or the bank for the period from when the owner stops paying them and when the bank forecloses,” Meier said. “Banks are very good after they execute that foreclosure, but they tend to delay it as long as possible because they know they don’t have to pay for that gap.”
Meier said these types of situations where associations needed to recoup delinquent fees didn’t happen often until a couple years ago. It’s all the more complicated and challenging when condo owners sublet their property, he said.
Meier said it would help if realtors further impressed on potential buyers that when people buy a condo, they are moving into a community with responsibilities. He said more and more new owners view it as a tenant-landlord relationship as far as the condo association goes.
“They don’t understand they’re part of a community,” Meier said.