Condo associations and property management companies need unit owners to make their common charge payments. It's crucial to have funds to properly maintain the association. Connecticut law provides for a six month priority lien, so options are available to collect against a delinquent home owner. Times are tough for many, so hopefully unit owners are often (and rightfully so in my opinion) given some leeway, as long as they're responsive and demonstrating good faith efforts to remain current. But, having substantial amounts owed, over long periods of time, can also negatively affect the marketability of units where the owners are current. If they're trying to sell, prospective purchasers may be discouraged when they review the resale package. Current owners' costs may increase.
The 6 month statutory lien may be foreclosed (following notice per FDCPA) and the owner's lender (as opposed to unit owner) steps in ("appears" in foreclosure) and pays off the delinquency for various reasons, one being to avoid incurring additional legal fees and costs, and protect their security (mortgage).
It's also important to monitor foreclosures where a lender is foreclosing for nonpayment. There is the afore-mentioned 6 month priority which would ultimately be paid when title passes, and would not be foreclosed out. However, if more than 6 months is owed, the difference does not take priority over the mortgage, so it would be foreclosed out and claim lost. But, there are ways to negotiate and recover most of, if not the entire, balance. Statutorily, legal fees are paid when satisfied (either by owner or lender), so if there's concern about incurring cost for a lawyer to prosecute, the costs and fees get shifted to the debtor.
Bottom line, there are different ways to go about keeping that reserve full, and may not be as expensive and difficult as you think. Call if I can be helpful.
Jeremy Hayden
jhayden@victoriaferrara.com
203-255-9877
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