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Question

Can A Homeowners Association Or Condominium Benefit By Foreclosing On A Unit To Collect Delinquent Common Charges In New York?

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Answer

Many people live in shared communities. The benefits of such community living result in a shared responsibility for costs, resulting in common charges or assessments. When unit owners don’t pay them, it imposes an unfair and disproportionate financial burden on the other owners.

Thus, Boards have a fiduciary duty to act in the best interests of all owners. Doing so may require Boards to foreclose liens for outstanding charges.

Foreclosing A Lien

To legally foreclose in New York, a Board must file a lawsuit against the unit owner. Such an action will lead to the sale of the unit to satisfy sums due to the Association or Condominium.

Foreclosure Is A Last Resort

If a unit owner is delinquent in paying common charges, before the sum due becomes unmanageable, Boards can take other proactive steps.  An action for a money judgment can lead to the ability to garnish wages or restrain bank accounts. This can result in payment before the delinquency rises to an amount requiring foreclosure.

Defenses A Board Is Likely To Face From A Unit Owner

Unit owners faced with foreclosure may seek to present a variety of defenses, including:

  • Challenging the right to assessments;
  • Challenging the right to foreclose;
  • Claiming that charges/fees assessed are unreasonable or excessive; and
  • Questioning whether the lien being foreclosed was properly filed.

Using the services of an experienced Community Association attorney can help avoid the pitfalls of such defenses.

A Repayment Plan May Be The Best Option

An experienced Condominium and Homeowners Association attorney can help your Board navigate the system and determine your best options. Often, a payment plan is sufficient, provided there is an adequate enforcement mechanism in the event a unit owner is non-compliant.

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