Condominium associations generally have a number of legal remedies to pursue when an owner stops paying assessments. An Ohio court recently found that associations may collect assessments as they come due during a lien foreclosure action by and through a court-appointed receiver.
Facts. In a 2017 case, an investor owner of a condominium unit, who had a rent-paying tenant living in the unit, failed to pay a special assessment to the association. The association filed a lien for the unpaid special assessment and started a lien foreclosure action. While the foreclosure action was in progress, the association also asked the court to appoint a receiver who would collect the rents from the tenant, as well as the current assessments as they come due. The unit owner argued that having the receiver collect assessments was a stretch of the statute, which only allowed a receiver to collect “reasonable rental” during the pendency of a foreclosure action.
Court Rulings. The Court found that “reasonable rental” can include assessment payments coming due during a foreclosure action.
Lesson. There are many ways condominium associations can collect the assessments owed by an owner who simply refuses to pay, and hiring an attorney who knows all the ins and outs of the condominium statutes will provide your Association the best likelihood of recovering all the money to which the Association is entitled by law. While this case provides another potential collection option, it may have less chance of success in Wisconsin, since our condominium statutes do not directly provide the option of an appointed receiver like Ohio’s statutes do.
If you have any questions, please feel free to contact the Husch Blackwell LLP Condominium and HOA Law Team.