Collecting Overdue Condominium Fees in Massachusetts

In Massachusetts, a condominium is established by filing a Master Deed with the Registry of Deeds covering the locus of the property and placing the condominium under the control of the Massachusetts Condominium Law (M.G.L. c. 183A). The Master Deed governs the overall Condominium (the units and the common areas); sets forth the title matters; establishes the rights of the unit owners; defines the units and the common areas; specifies what the unit owners are individually responsible for as far as upkeep, maintenance, and replacement; and establishes the interests the unit owners have in the common areas. The Master Deed must also include the name and mailing address of the corporation, trust or association which has been formed and through which the unit owners will manage and regulate the condominium, together with a statement that such corporation, trust, or association has enacted by-laws pursuant to Chapter 183A. If a trust or unincorporated association is named, the Master Deed shall also set forth the names of the trustees or managing board.

A condominium is created in Rhode Island by recording a declaration of condominium with the appropriate office in the city or town where the condominium is located. The declaration of condominium must be drafted in accordance with the Rhode Island Condominium Act. A unit owner's association must be organized no later than the date the first unit in the condominium is conveyed to a purchaser. The membership of the association at all times shall consist exclusively of all the unit owners or, following termination of the condominium, of all former unit owners entitled to distributions of proceeds under § 34- 36.1-2.18, or their heirs, successors, or assigns. The association shall be organized as a profit or nonprofit corporation or as an unincorporated association. In the case of an unincorporated association, a certificate evidencing the names of the executive board members and mailing address for the association shall be recorded with the municipal land records department for the city or town in which the condominium is located, which shall be updated as often as necessary to reflect any changes in the composition of the executive board. The Association may adopt and amend bylaws and rules and regulations.

It is extremely important for the management or board of directors of a condominium association to establish a procedure process for collection of common expenses, monthly condominium fees, and special assessments. When a unit owner fails to pay his or her share it can, and often does, substantially impede the trust's ability to pay its own expenses as they become due. Similar to borrowers falling behind on their mortgages payments, condominium unit owners tend to follow suit in tough economic times.

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Massachusetts and Rhode Island law both confer significant power and authority upon condominium associations to collect unpaid common expenses, monthly condominium fees, and special assessments from delinquent unit owners. The owner's obligation to pay his or her share of the condominium's common expenses—plus late charges, interest, and collection costs (including attorney fees)—is not subject to offset, withholding, or defense. The fees must be paid in a timely manner; a unit owner who believes fees are improperly assessed must pay them under protest and bring a separate legal action to determine their propriety. In both states, a properly filed condominium fee lien is entitled to super-priority over all other non-municipal liens, including a first mortgage on the unit, for up to six (6) months of condominium fees, attorney's fees, and collection costs. Furthermore, the lien cannot be discharged by way of bankruptcy due to its statutory nature.

For the super lien to be properly asserted, when any portion of the unit owner's share of the common expenses has been delinquent for at least 60 days, the organization of unit owners shall send a notice stating the amount of the delinquency to the unit owner by certified and first class mail. The organization of unit owners shall also send a notice stating the amount of the delinquency to the first mortgagee by certified and first class mail, provided, that the first mortgagee has informed the organization of unit owners of its name and mailing address. Furthermore, in Massachusetts, 30 days prior to the filing of an action by the organization of unit owners to enforce its lien for delinquent common expenses, the organization of unit owners shall send a notice stating its intention to file said action to the first mortgagee by certified and first class mail, provided that the first mortgagee has informed the organization of unit owners of its name and mailing address.

Most often, a mortgage lender will choose to pay the delinquent fees on behalf of the unit owner in order to preserve the priority of its own lien. The mortgage lender will then tack the amount paid onto the balance of the unit owner's mortgage. In the event that neither the unit owner nor the mortgage lender pays the overdue balance, the condominium association can file suit to perfect the super-lien and ultimately foreclose on the unit in order to satisfy the amount owed. It is therefore critically important that the association commence the collection process as soon as a unit owner's condominium fees are 60 days or more overdue. The longer an association waits to take action against the delinquent unit owner, the less protection the association will receive under the statute. Having a highly organized, time-sensitive and efficient tracking system in place will greatly assist in enhancing the maximum recovery for the association. If you are a condominium trustee and require the professional services of an experienced attorney to assist with the collection of unpaid condominium fees from a delinquent unit owner, contact D. Baker Law Group, P.C. today.

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