Check Your Governing Docs for Remedies Against Arrears

What of the person who refuses to pay his monthly costs? In a cooperative, this is a violation of the lease, and the board may terminate and evict the tenant-shareholder in arrears. But a condominium board has no such power, since there is no lease to terminate. The unit-owner owns his unit, just as he would own his own house. There can be no eviction for nonpayment of common charges.

While a condominium board can file a lien for unpaid common charges, the lien can sit on a property for years. A condo could sue the unit-owner for the money owed or commence a foreclosure action, but both take time and money. In the latter case, if there is a mortgage on the property, the lender’s lien is superior to the lien of the condominium, which means the lender would get paid while the condo board would possibly receive little, if anything. 

All of which begs the question: Can a condo board do anything when a unit-owner is in arrears and refuses to pay his common charges, yet continues to live in the unit? This leads us to the case of Heywood Condominium v. Steven Wozencraft. Although the dispute included numerous lawsuits between the parties and many years of litigation, the facts remained the same: Wozencraft bought a unit at the Heywood Condominium at 263 Ninth Ave. in Manhattan in 2007. Within a year, he stopped paying his common charges. 

The condominium house rules provided that if a unit-owner was in arrears more than 60 days, the condo had the right to curtail certain nonessential services. According to the house rules, that meant the doorman would not call the apartment to advise of a visitor, and no one would be allowed up to the apartment unless the unit-owner personally escorted the visitor from the entrance to the unit; the doorman would not accept packages for the unit-owner; and the doorman would not honor any authorization to enter the apartment or to release keys to the apartment. 

Wozencraft complained to the court that withholding services was not proper, especially since the condo expected him to pay his full common charges. But the court was not sympathetic, as it realized that the only reason the services were denied him was that he had stopped paying his common charges.  

It is interesting to note that the bylaws of the condo also provided that each unit-owner was responsible for the payment of common charges and assessments, and dissatisfaction with the quantity or quality of maintenance of services was not grounds for failing to pay common charges. In fact, as noted in a decision from 1993, Frisch v. Bellmarc Mgt., the obligation of a unit-owner to pay common charges cannot be avoided and is, for the most part, absolute: “An individual unit-owner ... cannot withhold payment of common charges and assessment … based on defective conditions in his unit or in the common areas or based on his disagreement with actions lawfully taken by the board of managers.” Therefore, Wozencraft’s position that he was not receiving services and therefore he should not have to pay the normal common charges was dismissed by the court. 

Lessons to Be Learned

Governance of a condominium can be difficult, as the board does not have the same remedies as in a cooperative. This being the case, every condo board should review the house rules and bylaws to ensure that it has all of the possible remedies that might be available. Careful review of the provisions in regard to the non-payment of common charges is very important, and it should be clear in the governing documents that if a unit-owner is in arrears, nonessential services, including the use of amenities (such as a gym or pool or rooftop garden) will not be available to that unit-owner. It is best to review all remedies in the governing documents, including those involving other day-to-day violations of the house rules and bylaws, such as smoking, noise and odor complaints.

Attorneys:

For Heywood Condominium: Schwartz Sladkus Reich Greenberg Atlas

For Steven Wozencraft: Jonathan Landsman

Andrew P. Brucker is a partner at the law firm Armstrong Teasdale. The statements and views in this article are his own and not necessarily those of the firm.