When Owners Don't Pay HOA Boards Struggle to Make Ends Meet

Nothing remained in the New Jersey townhome after the owner, exasperated and struggling, financially picked up and left. And took everything with him. “Not only did he walk away, but he gutted his house,” says Joseph J. Balzamo, a president at Alliance Property Management LLC in Morristown. “He took the appliances, he took the electric, took the counter top, took the wiring, took the plumbing, took everything. It was a townhome, so nobody saw this from the outside. He took everything out of his house so it was just a box.”

Associations may also have to deal with residents not being able to pay their association fees, families staying longer in condos that are not being able to accommodate their needs in addition to the abandoned or foreclosed properties. “These situations are becoming more prevalent, when they used to be something that happened once in a while, limited to one area or one building, they are now more frequent,” says Nancy Hastings, CEO of MAMCO Property Management in Mount Laurel.

An August article in the New York Times said that New Jersey has the 15th highest rate of foreclosure in the country, with 3,576 houses either in the foreclosure process or already owned by the banks at the end of June 2012. One in every 106 housing units faces foreclosure in the Garden State which also has the second-longest time frame for completing the foreclosure process, behind New York, taking an average of 940 days, versus a national average of 378 days.

Throughout New Jersey, as foreclosures continue to increase, condo and homeowners association boards of directors must grapple with a variety of related problems.

Difficulty in Collecting

Faced with foreclosed or abandoned units can put a great financial burden on an association. “You have no way to collect them,” says Balzamo. “Banks have insured themselves from a situation where they don't have to sell the unit, they don't have to pay the maintenance fee on the unit, and then when they decide to sell the unit, they're only obligated to pay you six months' worth of maintenance fee, which is very detrimental to the building.”


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  • If a condominium owner is in default of HOA payments and now lives out of state, what options are available to the HOA to obtain past due monies? Is it more beneficial to file a lien and complaint (whereby the HOA can foreclose on the property) or better to file a personal civil claims suit? Can the HOA levy bank accounts, garnish wages in another state through the personal judgement process? Thank you!
  • We have a townhouse owner who has a reverse mortgage, who had a stroke, and now lives in an assisted living facility. She intends on having the bank foreclose on the townhouse since the mortgage amount far exceeds the resale value. What can the HOA do to attempt to collect monthly maintenance during this period of uncertainty which could last over a year? We cannot afford this loss of revenue.
  • Question My friend's townhouse wasforclosed and bought back by the bank, but he still has to pay the HOA fees because he does not have proof. to show the HOA The bank is taking their time. When and how can he stop paying the HOA fees?
  • Is it not true taht under the condo rider contract it states that the lender will pay the past due fees and then the dept becomes the borrowers? how does one go about contacting the lender requesting payment under this contracted agreement? thanks
  • My Board has a budget shortfall and has find itself in a bad position. The Board is raising fees and added a special assessing for all owners. But one owner has persuade 11 owners including herself not to pay the increase fees and special assessing. I have 24 owners living in the building. What can be done?
  • Our HOA has the same problem as the comment of HOA BOARD MEMBER left question onFriday March 22, 2013 . No one seems to have any direction of what to do. Our attorney suggests filing A Consumer Financial Protection Compliant to perhaps encourage the mortgage company to repair and sell. There is severe damage due to water pipe burst during the winter months. We are owed about $5,000 in past due assessment. Does anyone have an suggestions of what action we could and should do?
  • If an owner is leaving the property, relocating in a different state (due to lay off ) the property it's not rented and later on the owner its filing hard ship and the property goes in foreclosure, should the owner pay HOA and should this be the same amount like when somebody was leaving on the property? (even if no electric or water have been used all this time on that property)