Protecting Condominium Associations - Collecting Unpaid Fees

The Appeals Court of Massachusetts recently restricted the 'super lien' of condominium associations over first mortgage holders for unpaid condo fees to the six months immediately preceding the filing of a lawsuit and no more.

What does this mean for associations in Massachusetts? Simply put, associations need to be expeditious about pursuing a condominium owner who fails to pay common expenses. The statutory process for obtaining a priority lien over the first mortgage can begin as soon as a unit owner is more than sixty (60) days late in paying its condominium fees, and associations should take action quickly to protect their interests.

Once a proper claim is made by the association against a non-paying condominium owner, lenders holding first mortgages on the units will often pay the delinquent condo fees in order to retain their priority. By beginning the process as soon as allowed by statute, the association will encourage the banks to step in and assume the unit owner's past due fees.

If the lender does not pay the unpaid condo fees, the statute allows for the filing of suit against the owner. If the process has been properly followed, the association has a 'super lien' for six months of condo fees. The law allows the association's lien to jump ahead of a mortgage, virtually compelling the lender to pay the delinquent fees. The best part for condo associations is that attorneys' fees and costs incurred by the association are also recoverable.

The advantage of early action against a delinquent unit owner is two-fold. First, the association will jump ahead of the first mortgage holder for six months of condominium fees immediately preceding filing suit. Second, if the mortgage holder decides to pay the past due condominium fees to retain its priority, then the association will be made whole and if the unit owner becomes delinquent again, the association can start the process over. It should be noted however, that if the mortgage holder does not pay the unpaid condominium fees, new Massachusetts case law has held that associations cannot obtain a 'super lien' for more than the six months.

Categories: Updates