Board must be aggressive
on late condo fees

Ask the Lawyer
By Stewart J. Berger

Dear Ask the Lawyer:
I live in a Center City condo consisting of about 200 units.
We have a few condo owners who think paying condo maintenance fees is a joke. We hassled these people and eventually got the money from some of them.
But now things are serious. Thirty units, which is about 15 percent of the building, are still in default of their monthly maintenance. The building is now having financial problems.
Any advice?
Arty

Dear Arty:
You are describing a very serious real estate problem that probably affects every single part of the country.
I heard a statistic that approximately 70 percent of the condominiums in this country are experiencing similar problems with large unpaid monthly maintenance fees. The report did not discuss what "large" means.
There are two remedies that I can suggest.
First, the condo board must be aggressive in its approach to the delinquent condo owners. A lawyer must be retained. If the condo owner is more than one month in arrears, a lawsuit should be started. A judgment should be obtained. The condo can then be sold at a sheriff sale.
This whole process may take six months, if not, longer. It is expensive, but there is no alternative.
While being aggressive, the condo board has to be sensible. If a condo owner has paid month after month but fell into temporary financial trouble, arrangements can be made — say, for example, the arrears can be paid over a period of three or four months.
But the condo owners who think condo fees are a joke must be dealt with severely.
On a long-term basis, I have a suggestion. The condo board should pass a resolution that requires all new condo owners to place, say, three to six months of condo dues in escrow with the condo association.
This money would not be used by the condo except to pay the monthly maintenance fees if that condo owner should default. When the condo owner sells the unit, any part of the escrow that was not used should be returned to the owner with interest. This will provide some cushion in the event that the condo owner defaults in the monthly maintenance payments.
This might have a chilling affect on the sale of condo units. The new purchaser would have to ante up a thousand dollars, plus or minus, depending on the amount of the monthly maintenance fee and the number of months required to be placed in escrow.
But the long-term benefits outweigh the disadvantages, at least, in my opinion. ••
Stewart J. Berger is an attorney with offices at 7207 Rising Sun Ave. Questions and comments may be addressed to Ask The Lawyer, c/o The Northeast Times, 2512 Metropolitan Drive, Trevose, PA 19053