Does your condominium or homeowners association (HOA) have owners who don’t pay their assessments?  Owners are finding more excuses to avoid paying their assessments.  Filing multiple bankruptcies, submitting payments with conditional language, NSF payments, claiming they don’t owe since they don’t use the common elements. . .  The list goes on and on.

So how does your association handle these “Sophisticated Debtors”?  Does your Association have a strong written collection policy?  Are your governing documents updated and in compliance with current law?  If not, your association will spend more than you should be in trying to collect unpaid assessments.

To ease the pain and headache of collecting unpaid assessments, make sure your association has:
Continue Reading Dealing with Sophisticated Debtors

Facts

Plaintiff, O’Donnell, bought his condo in 2012 and sold it in 2019.  Beginning in 2013, O’Donnell missed various assessment payments.  In late 2013 the association filed a lien, and in 2018 the association commenced a foreclosure action.  To bring the lawsuit to an end, O’Donnell sold his unit.  The sale allowed O’Donnell to pay off the claimed past due assessments and attorney fees.  At the time of sale, he paid $23,342 to the association and $22,234.94 to the attorneys which brought the case to an end.  Plaintiff then filed suit against the association’s law firm alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) by filing a foreclosure suit without legal authority.  Specifically, O’Donnell alleged the law firm failed to satisfy several of the prerequisites to proceed with a foreclosure suit against him.  Both parties moved for summary judgment.
Continue Reading Attorney Fees – FDCPA Violation – Failure to Follow Association Document Procedures

Please join Husch Blackwell’s Condominium & HOA Law Team on February 5, 2021, as we outline the NEW 2020 Robert’s Rules, how parliamentary procedure should be used to run meetings more efficiently, some case examples of fine issues that arise and how to solve them, some basic collection reminders relating to death, trusts and mortgages and why your Rules matter more than you think. We hope this will be both interactive and fun while we share the latest information that homeowner associations (HOAs), condo boards and managers need to know. Looking forward to 2021 and making things as straightforward as possible.
Continue Reading Association Academy: Your Rules, Robert’s NEW Rules and Court Rules Relating to Fines

Summary

The language and definitions in your governing documents reflect the intentions of the Association.  You need to either follow them or amend them, but NOT ignore them.

Facts

Sunnyside Resort Condominiums is a private resort property located on Lake Gogebic in Gogebic County, Michigan, and governed by the Sunnyside Resort Condominium Association, Inc. (SRCA).  In 2006, the Plaintiffs purchased vacant lots within SRCA with an individual value of $13,000.  Unlike other lots, the Plaintiffs’ lots, among other things, lacked improvements to the property, utilities, and septic systems.

Assessments on Vacant Lots.  Although the Plaintiffs’ lots were free from any structures, Plaintiffs were charged assessment fees despite the association documents essentially providing that the Plaintiffs were not required to pay association assessment fees until a structure was built on the lot.  In part this was due to the fact that the percentages of value for the units were calculated based on several factors including, market value, size, and allocable expenses for maintenance. Plaintiffs stopped paying the monthly assessment fees for their two units in July 2015.
Continue Reading Vacant Land Units Can Have a 0% Percentage Interest

Facts

Plaintiffs were two owners (Maples and Brown) at Compass Harbor Village Condominium Association in Maine (the “Association”) who had purchased their respective units sometime in 2007.  The Declarant was an LLC that held more than 50% of the votes (15 of the 24 units) and therefore controlled the board.  For many years the Association common areas were not property maintained in many ways.  In addition, the Association failed to hold meetings, take votes on Association matters, maintain banking or other records and refused to provide financial information to the owners.  The Declarant’s position was that “because it holds a majority of the voting power in the Association and therefore any dispute between it and any of the unit owners would ultimately be decided in its favor.”  Plaintiffs claimed to have lost about $53,000 in value in each of their units because of the actions of the Declarant.
Continue Reading Failing to Maintain and Properly Collect Assessments is a Breach of Fiduciary Duties

Facts

Plaintiffs live in Ashbrooke Property Owners Association (“Association”) and missed their annual assessment payments of $115 for three straight years.  The Association hired Defendant, Equity Experts, to collect the past due amounts.  Under the Declaration the past due assessments accrued interest at the rate of 18% per annum, plus the Association could charge a late fee and the Owner was “liable to the Association for all costs and attorney’s fees…”  Equity Experts added fees for their constant contact package and their Pre-Foreclosure package in the amount of $750 and $1,495 respectively.  In December of 2013, Defendant advised Plaintiffs that their balance was $3,199.60, but that if they did not pay within 10 days the balance may be at least $6,644.60.  Plaintiffs filed suit seeking class certification because the interest rate charged exceeded the amount allowed under Georgia law and because the demands were in excess of sums allows under the Association documents.
Continue Reading Class Action Status Granted to Association Homeowners Alleging FDCPA Violations

Does your homeowners association have a written collection policy?  What duties does the property manager and/or Board have under the policy?  Learn what role the property manager and/or the Board of Directors should have in the assessment collection process.

Want to learn more about Wisconsin condominium and HOA law from experienced condo and HOA

The law does NOT require a Board to extend additional time to owners to pay assessments just because of the COVID 19 pandemic.  While such policies may show a concern for members of a community, probably without realizing it, those policies may also have significant adverse effects on the Association, especially in 2020.  What