Additional Information: I live in a 5 unit condominium building in Boston, MA. The owner of the unit next to mine stopped paying her condominium fees months ago. The condominium association asked her several times to pay the fees, and she said she would pay, but she has yet to do so. For the past several weeks, I have not seen her in the building, she no longer picks up her mail from her mailbox and the utility company placed a notice on her door informing us she is behind on her payments. I think her unit may be in the process of being foreclosed upon. Her condominium is physically attached to my unit, and I am afraid that her lack of maintenance or care for the unit will cause damage to my property. Will the condominium be able to recoup the money she owes us? Is there any way I can compel her to maintain her unit, or at least winterize it ahead of the upcoming cold season? How can I protect myself, the condominium association and my unit in this situation? The condominium does not have a significant reserve fund, and cannot afford to pay much to an attorney.
Good neighbors are hard to find, and in small condominiums (under seven (7) units), having a strong relationship with the neighbors is especially beneficial. More than any other living arrangement, owners of small condominiums constantly rely on their neighbors to make good decisions relating to the care, maintenance and continued prosperity of their condominium. When one unit owner of a small condominium does not comply with the rules set forth in the condominium documents, for example, not paying their monthly condominium fees or not maintaining their unit, it can be very detrimental to the entire condominium.
To put the condominium in the best position to avoid internal conflict, it is important for the condominium to comply with the rules of the condominium documents and elect trustees who can manage the property and the financials. The condominium should try to meet regularly, and address any conflicts or problems as they arise.
If you are unlucky, and a unit owner in your small condominium is causing problems, there are many legal remedies to recoup outstanding common area funds and to protect against any additional financial or physical harm to the condominium.
A frequent issue in a small condominium is the failure of a unit owner to pay monthly condominium fees. The unit owner often claims to the other unit owners that they intend to pay in full, and ask for flexibility on the payment. Small condominiums are often unable to pay a property management company to collect funds, and asking a neighbor to pay their condominium fee each month may feel strange or uncomfortable. However, especially in a small condominium, it is crucial that all monthly condominium fees are paid on time to ensure the condominium maintains a healthy reserve fund. Having a low reserve fund could cause the condominium to run afoul of Fannie Mae/Freddie Mac and Federal Housing Association lending guidelines, which state that lenders may only extend mortgages for units in condominiums with no more than 15% of its units in delinquency. In a small condominium, even one or two units being a month or two behind in payment cause the condominium to exceed the 15% number which will deter a lender from offering a mortgage to a prospective buyer. The inability to buy or sell units could jeopardize the value of the entire condominium and prevent unit owners from selling their units at market value.
Because of the grave importance of ensuring common area fees are paid on time, small condominiums should not hesitate to contact an attorney for help with collection of delinquent fees. In Massachusetts, condominium trusts have considerable power to collect unpaid common area assessments pursuant to M.G.L. c. 183A, the “Condominium Act.” This law provides the condominium trust a “super-priority” over the first mortgage on a unit for up to 6 months of unpaid condo fees, plus all attorneys’ fees and collection costs. In other words, a small condominium will be able to hire an attorney to recover past unpaid condominium fees, fines and associated late fees without depleting their reserve funds because the attorney will be paid directly by the delinquent unit owner or its mortgagee. Even if the owner of the delinquent unit ultimately declares bankruptcy, the condominium trust can still recoup unpaid monthly common area fees owed to it for up to six months of common area fees immediately preceding the bankruptcy filing.
Owners of small adjoining condominium units must also be aware of the hazard of physical damage to their homes caused by non-maintenance of adjoining units or negligence of the unit owner. Owners of small condominiums should constantly observe their neighbors to ensure they are still residing in the condominium and be wary of neighbors who no longer are paying utilities or fail to pick up their mail as those are signs of their intent to abandon the unit. An abandoned unit is hazardous to the entire condominium as it may be accessible to squatters who could cause damage internally to the unit as well as the common areas of the condominium. Similarly, a unit owner’s failure to pay utilities could cause the pipes to freeze and burst causing significant property damage to the entire condominium building.
If you suspect that a unit has been abandoned, there are several ways to protect yourself and the condominium. You should determine if anyone is residing in the unit on a day-to-day basis. If there is a tenant in the unit, you should consult with a lawyer to obtain an order from a court allowing a rental assignment from the tenant, for the purpose of applying all rent to the outstanding condominium fees, late fees and costs of collection pursuant to the Condominium Act. If the unit is vacant, and there is no tenant in place, the trust may consult with an attorney to obtain a court order allowing the trust to place a tenant into the unit and collect rent therefrom.
In many communities in Massachusetts, including Boston, there are local laws in place requiring all owners of residential properties, including lending institutions who have initiated foreclosing activity, to register vacant and/or foreclosing residential properties, and to maintain the properties, or pay for the costs of maintenance. In emergency situations, a temporary restraining order can be obtained. Prompt action will preserve property values and hopefully prevent serious damage to the remaining units.
Living in a small condominium affords many individuals the ability to live in a desirable part of town without being subject to paying monthly rent to a landlord. Small condominiums can be a wonderful source of community and many times unit owners become good friends. However, it is important to recognize that the condominium trust has been granted the power, pursuant to the Condominium Act, to protect itself against delinquent unit owners. The condominium should not hesitate to immediately consult with an attorney if any of the unit owners are acting in a way that is detrimental to the well-being of the association in order to best protect the condominium and its value.