Q&A: Delinquent Dues Member

Q Our condo association, which is private, has a situation that seems to be going nowhere. One of the units in the association has been for sale for over 2 years and the owner has not paid their HOA dues in 3 plus years. We as the board filed a lien on the unit, prior to the unit going on the market and one after the unit went up for sale. The owner has had all HOA privileges taken away (access to the pool, clubhouse) but we still have one lingering issue and that is parking on the street by family members. We can tell them not to park on the street but we are not sure how to enforce this. Can this be enforced? Also it seems the unit may stay on the market for some time. We have a lawyer dealing with the liens but we are wondering as an association board, is there anything else we can do besides wait?

—Waiting in New Jersey

A “Dealing with delinquent unit owners can be a time-consuming and costly endeavor for an association board,” says attorney Ronald L. Perl of the Princeton-based law firm Hill Wallack, LLP. “However, it is a board’s duty to ensure that members comply with their financial obligations to the association. As such, a board’s ultimate goal must be to ensure that each unit has an owner who fulfills his or her financial obligations and complies with the association’s governing documents.

“Taking an owner’s privileges away when he or she is in arrears is a good first step to alerting the owner that the association will not simply sit on its hands. The type of privileges that can be suspended depends upon each association’s governing documents. Most governing documents permit the suspension of voting rights and use of the common recreational facilities. Remember that the owner is entitled to due process and that the association’s governing documents may contain specific provisions that control the procedures involved.

“Revoking an owner’s right to park vehicles on the street can be accomplished where the streets are common elements and the board is authorized to regulate parking. However, unless the association is controlled by an access gate, the only way to enforce this restriction is by towing the vehicle or imposing additional fines. In order to tow a vehicle, the association must have adopted a parking resolution which provides for ample notice to the owners that non-payment will result in suspension of their parking privileges. Further, the community must be in compliance with the New Jersey Predatory Towing Prevention Act.

“While recording a lien against the unit is one step in the collection process, this alone will not necessarily result in receipt of the past due maintenance fees. Instead, the board will have to incur additional costs and either file a collection lawsuit or foreclose the lien. A collection lawsuit is ordinarily advantageous where a board believes the unit owner has a paying job or sufficient funds in the bank to cover the past due fees. Once a judgment is entered, an attorney will be able to levy upon the owner’s bank accounts or issue a wage garnishment to the owner’s employer. If however, the owner is unemployed and does not appear to have any funds, foreclosing the lien against the unit would be the most prudent course of action. In addition, if the unit is vacant or is occupied by a tenant, collection may be realized by the appointment of a rent receiver. This is accomplished in a foreclosure proceeding by an application to the court.

“Unfortunately, if there is no opportunity for a rent receiver, patience will be required since the foreclosure process is long and can take close to a year to complete. Moreover, foreclosing the lien may not result in recouping the past due amounts where there are mortgages which exceed the value of the unit, as is commonly the case in today’s economy. In addition, the association must be willing to purchase the unit at sheriff’s sale. However, once the lien is foreclosed and the unit sold, a new owner will take control of the unit and begin to pay maintenance fees going forward. Foreclosure of the lien may not always recoup past arrears, but it will serve the board’s ultimate goal of ensuring that each unit has an owner who fulfills his or her financial responsibilities.”

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5 Comments

  • what can we due if we have a corrupt boar d thats acted in coverups. acted in somewhat ,i won't say crimminal but an irresposible mat ter. the problem with these boards is that we have no rights and can ride shotgun over us.
  • My question is condo association says that until i do not pay all my fees dues i cannot park in the complex. Is that right for them to do???
  • As a landlord I am not delinquent on any fees and never have been in 10 yrs in the same COA. The COA have just asked me to pay one and a half month's fees as a deposit against 'possible delinquencies' or they will stop my tenant using the common area (pool and parking) and issue violations against me. The condo documents contain the provision but it does not apply to every class of owner, seems to only apply to landlord that want to rent. is this legal and enforceable?
  • Need advice. All mantenance and special assement dues are paid in full, every month. One instance is regarding a cardboard box placed by the bin by mistake, and the association charged fine and sent the Rules & Regulations later. As this was retroactive punishment I wanted to question it. However the dues got paid. Still they towed a legally parked car. Is the association having any rights to do this ? In this case clearly no, but what if the fine were not paid. Do they have right to tow vehicle for this reason without prior notice that they were going to tow away the car ?
  • These all seem to be receivers for HOA in a blanket. I have been threatened individually ~ with a motion to appoint a receiver for my condo unit only By HOA attorney Property in Colorado... how to STOP receivership? My mortgage is paid every month never late and no foreclosure is filed. Are the able to get receiver separate from a foreclosure?