Unfortunately, some condominium co-owners feel that they’re above the bylaws and continue to leave their assessment fees unpaid. If you on a condominium association’s board of directors and want to clean-up any delinquencies, there are steps that you can take.
1) Confirm the exact amount owed. By reviewing the bylaws you can make a determination of the amount of the assessments that is payable by the co-owners. These bylaws will also determine the rights the association has to file a lien. Once those two factors have been determined the next step is to obtain record of any payments that may have been already made. If the payments are less than the amount owed and your association has the right to file a lien, you’re good to proceed to step 2.
2) Send a letter. Now this isn’t required but you always catch more bees with honey. Play nice to start. Sometime just sending the letter is good enough to let a co-owner know that someone cares and that there will be consequences for not paying. Just make sure that you’re adhering to the Fair Debt Collection Practices Act (FDCPA) if you are subject to it. If you’re unsure if you are, contact an attorney.
3) Prepare a notice of lien. The lien must confirm the following pieces of information: legal description of the condominium unit, the name of the record holder, amount owed up to the date of the lien. (Excludes interest, attorney fees and future assessments.) You can handle this step on your own without an attorney, but I do not recommend it.
4) Serve the Lien. In order to properly serve the lien you must, send it by first-class mail, postage prepaid and sent to the last known address of the co-owner. This lien MUST be served at least 10 days before any sort of foreclosure proceeding.
5) Record the Notice of Lien. The register of deeds within the county that the lien has been served must know of the lien. Make sure to register the lien with the Register of Deeds office.
6) Decide appropriate action against non-paying co-owner. This is where it can get a bit complicated. The most common action would be foreclosure. Determine if there will be an action for money damages. You may still try to collect in addition to the foreclosure. If a lien has been recorded, and the delinquent co-owner tries to transfer ownership of their condo, the condo cannot be sold unless the lien is paid at closing.
7) Foreclose on the lien. Condo liens, just like mortgages, can be foreclosed. While mortgages are generally foreclosed upon by advertisement (publishing a notice in a legal news paper), condo liens are generally foreclosed upon by filing a lawsuit in the circuit court. If a condominium association chooses to foreclose on its lien, it is entitled to a judgment not only for the past-due amounts, but also reasonable interest, expenses, costs, and attorney fees. This step requires an attorney. Do not go this alone!
8) If the co-owner pays (including fees and interest) release the lien. This is best case. Once the owner pays, a release of lien must be filed with the register of deeds. If a lawsuit has been filed, your attorney will dismiss the lawsuit.
Now that you’ve gotten a delinquent co-owner to pay, you will notice the word gets around quickly and others who are delinquent may start to pay-up as well. It’s a matter of being fair and firm that will get results. If you need any assistance in the process of filing a lien against one of your co-owners or assistance in obtaining a money judgment or a judgment of foreclosure, reach out to the attorneys at Tilchin & Hall, P.C. at (248) 349-6203 or email them below.
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