Collecting Unpaid Common Charges

Nov. 19, 2015 — In a lien foreclosure lawsuit, Lasser Law Group successfully collected more than $140,000 in unpaid condominium common charges, late fees, and legal fees from a commercial condominium unit-owner who had not paid common charges for several years. Lasser Law Group was retained by the board of this small condominium building in the middle of 2014 to take over the lien foreclosure lawsuit, which was originally begun by a different law firm in 2013. We quickly made a motion for summary judgment, which prompted a settlement payment from the commercial unit-owner, including late fees and legal fees. Because the commercial condominium unit was large in size, its monthly common charges were also sizable, resulting in a significant budget deficit for this small building during the course of the foreclosure lawsuit. The settlement payment provided a much-needed cash infusion to the small building.

Takeaway

Common charge arrears continue to be a problem for condominium boards and property managers. It is important for boards and managers to promptly start legal action to prevent unpaid common charge balances from ballooning out of control. It is also important to retain experienced condominium collections legal counsel as there are usually a variety of legal approaches that can be taken in each case, and a lien foreclosure by itself is often not the most cost-effective approach.
Condominium boards should also review their bylaws with legal counsel to make sure they contain strong language, which ensures that the condominium can properly collect late fees and obtain reimbursement of legal fees spent suing unit-owners who fail to pay on time. Without the appropriate language in their bylaws, condominiums may have a difficult time recovering such late fees and legal fees, and this may embolden some irresponsible unit-owners to delay or withhold payment of their common charges.