Being a member of a condominium association board can be a challenging and rewarding undertaking. One common challenge is collecting delinquent condo fees. This can be a very time consuming and frustrating endeavor. A good association management company can make this process go smoothly and save the board members time and headaches. Knowing how to deal with this problem and how the state of Massachusetts can help is essential. Fortunately for CentralMassachusetts condominiums associations and property managers, there are provisions in the Massachusetts Condominium Act that allow for tools to facilitate condo fee collections. Any late fees associated with a condo become a lien against the property. This means that the owner of the condo is legally liable for paying these fees. Condo fee collections are allowed once a fee becomes a lien against the property. The law allows these fees to be considered a lien against the property starting on the date they are due.
If there are liens on a property, the property manager or condominium association may have the ability to sell the unit in a foreclosure auction. It is important for property managers or condo associations to properly file paperwork to realize the full benefits outlined in the Massachusetts Condominium Act. For instance, filing a super-priority condo lien gives the manager or trust priority over the mortgage company, but notices regarding the lien must be sent to both the mortgage lender and the owner of the unit. If the condo is sold at auction, a super-priority lien will allow the manager or trust to continue collection efforts for up to six months worth of unpaid fees. Lenders are not able to recover fees before the manager or trust if there are outstanding liens on the property. In order for the property to be free and clear of liens, the manager or trust must sign a certificate in association with the Massachusetts Condominium Act, section 6(d). Fees associated with liens must be paid. If the unit owner feels that the charges are unjust, he will not be able to avoid payment as long as there is a lien on the property. Besides being able to use funds for projects and paperwork associated with the condo, there are outside considerations to take into account. Lending guidelines associated with FHA, Freddie Mac and Fannie Mae loans dictate how many condos in an association can have delinquent condo management fees. If more than 15 percent of the condos in an association haven’t paid fees for 30 days or more, the management group or owner will not be eligible for financing.