I'm Getting Divorced! So I Can Stop Paying Condo Common Charges, Right?
Jan. 18, 2013 — Divorce is never not problematic. Yet while there are many bad things about it, there are good things as well — a new life, new beginnings, Having it stop a foreclosure proceeding on your condominium apartment after you haven't paid common charges for nearly three years is not, however, one of them.
It all started, as far as the condo board of Continental Towers is concerned, in May 2010. That's when Bijan Monassebian, the owner of Penthouse R, a.k.a. Apartment 37R, in the 1975 high-rise at 301 E. 79th Street in Manhattan's Yorkville neighborhood. That's when Monassebian — who was chief information officer of Smith Barney in the 1970s, then president of the financial-services company TCAM Systems, which was sold for $32 million in 1994, and president of same field's OrdEx Systems since 2001 — stopped paying his common charges. The board eventually filed a foreclosure action.
"Staying" the Course
So what was the homeowner, a person well-versed in the financial word, thinking? His rationale, he said, was that in October 2009 he transferred ownership of the penthouse to his daughter, Deborah Monassebian. But there was the teensy, tiny matter of actually recording the deed, which he conceded never happened. Why didn't it happen? Because his wife Homa filed for divorce on Dec. 23, 2009, claiming ownership of the apartment and automatically "staying" (i.e., stopping or postponing) the recording.
Monassebian paid four more months of common charges and then simply stopped. If Continental Towers wanted to sue him, he argued, it would also have to sue his wife and daughter. But as the condo board countered, and as New York State Supreme Court Justice Lucy Billings agreed, saying that claiming ownership and actually owning something are two different things.
The wife and/or daughter's "potential ownership rights," wrote Billings in her Dec. 21 ruling, did not affect plaintiff Continental Towers' right to the common charges. "If the wife or daughter is in fact an owner, she may be liable for the common charges, and plaintiff may seek to recover the charges from her," the judge said, "but neither family member is necessary to accord plaintiff relief...." Monassebian could take his own legal action against his daughter or his estranged wife if he wanted to, she added, but that wasn't any of the condo board's concern. Pay up.
Gym Dandy
Not so fast, said Monassebian: The board is violating the condominium bylaws by refusing to let me rent my unit, so that I could collect payments and use them to pay the common charges. And the board isn't repairing and maintaining the common areas affecting the apartment, and it's not letting me use the building's gym.
Not so fast right back at'cha, said the judge: The bylaws prohibit renting an apartment when it's in arrears, and also prohibit unit-owners in arrears from using the gym. Oh, and you haven't shown any evidence there's anything's wrong with the common areas — and, um, your complaint about that "also rings hollow when [you have] not paid the charges for such maintenance."
Monassebian then made out last try: He said the condo board promised to waive interest, late fees, fines and attorneys' fees and expenses for six months following his last common-charge payment in May 2010. But he presented so evidence to support this claim — and in an apparent contradiction had sworn in an affidavit that the board had "refused to act reasonably and in good faith and to accommodate the circumstances."
Judge Billings award the condo board its judgment against Monassebian for an amount that had been determined by a Referee's Report, plus interest, late fees and reasonable attorneys' fees.
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In an interesting sidelight, the judge noted that interest could be charged only on the common charges and not on late fees, which is pro forma — but she also rebuffed Monassebian's claim that the interest rate being charged was usurious, saying that "common charges … are not a loan [and so] New York General Obligations Law §5-501(2)'s prohibition against usurious interest on loans is inapplicable."
That may not necessarily mean you can do like a credit-card company and charge 29 percent interest — but if a bank can charge that high an interest rate and not be considered usurious, then it may very well mean a condo board can as well.
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