September 29, 2022 Different powers. If a shareholder of a housing co-op refuses to pay the monthly maintenance fee, the co-op’s board of directors can terminate the ownership lease and evict the shareholder. But a
September 29, 2022
Different powers. If a shareholder of a housing co-op refuses to pay the monthly maintenance fee, the co-op’s board of directors can terminate the ownership lease and evict the shareholder. But a condominium board has no such power since there is no lease to terminate and no way to evict for non-payment of common charges.
While a condo board can file a lien for unpaid common charges, the lien can stay on a property for years. A condo could sue the unit owner for money owed or start a foreclosure action, but both take time and money. In the latter case, if there is a mortgage on the property, the lender’s lien is greater than the condo’s lien, meaning the lender would be paid while the condo board might receive little or nothing.
So what can a condominium board do when a unit owner refuses to pay the common charges while continuing to live in the unit?
Case study. For the answer, turn to the case of Heywood Condominium vs. Steven Wozencraft. Wozencraft bought a unit at the Heywood Condominium in Manhattan in 2007. Within a year, he stopped paying his common charges.
The condominium’s house rules provided that if an owner was more than 60 days late, the condominium had the right to reduce the following non-essential services: the doorman would no longer call the apartment to announce a visitor, and no one would be permitted into the apartment unless the unit owner has personally escorted the visitor from the unit entrance; the doorman would not accept packages for the owner of the unit; and the doorman would not honor any permission to enter the apartment or hand over the keys to the apartment.
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Objection! Wozencraft objected that the suspension of services was inappropriate, but the court was not sympathetic, as he realized that the only reason services had been denied was because he had stopped paying his common charges.
Interestingly, the condo regulations also provided that each condo owner was responsible for paying common charges and assessments, and dissatisfaction with the quantity or quality of services was not grounds for non-compliance. payment of common charges. Therefore, Wozencraft’s position that he was not receiving services and therefore should not have to pay normal common charges was rejected by the court.
Take action. Because condo boards do not have the same recourse as co-op boards, condo boards should review house rules and regulations to ensure they have all the remedies that may be available. Careful consideration of provisions for non-payment of common charges is very important, and it should be clear in the governing documents that if a unit owner is late, non-essential services, including use of amenities ( such as a gym, swimming pool or rooftop garden) will not be available to this owner. It is also advisable to review any appeals in the governing documents involving other day-to-day violations of house rules and regulations, such as smoking, noise and odor complaints.
Andrew P. Brucker is a partner in the law firm Armstrong Teasdale. The statements and opinions in this article are his own and not necessarily those of the company.