Q: Control over the operation of our condominium has recently been turned over formally and completely to the unit owners. I am the newly elected president of our condominium association. Going through the books of the association, I have found two unit owners who have not been paying their monthly condominium fees, and they are now in arrears, of at least three months. Our association needs the money, but some board members are reluctant to take any legal action at this time. Can you tell us what rights we have to collect these unpaid fees?
A: Condominium unit owners often forget that they are no longer living in a landlord-tenant arrangement. Unlike a rental unit, the owner of a condominium unit shares full responsibility with every other unit owner to keep the condominium going. If one owner does not carry his or her share, this creates a significant drain on the resources of the entire association. The burden of paying the delinquent owners's share will no doubt be shifted to other unit owners, thereby substantially increasing the obligations of the entire association. The impact of non-payment of condominium assessments for common expenses can seriously threaten the condominium itself, forcing down property values and significantly affecting resale and mortgage lenders' interest in the project.
Thus, because of the significance of the common assessment fee, most states that have dealt with condominium legislation have created what is known as a "lien for assessments." A lien is a cloud on title. If you have a lien on your condominium unit, the amount of that lien must be paid before clear title can be given to anyone else. In fact, if the lien continues, the association has the right to foreclose on your unit, and use the proceeds of the foreclosure sale to satisfy the lien.
You should be aware that the law differs somewhat between Maryland, Virginia, and the District of Columbia. Because you did not tell me where your condominium is located, permit me to briefly summarize the law in these three states.
VIRGINIA: The unit owners association is given a lien on every condominium unit, and this lien takes priority over all other liens and encumbrances except real estate tax liens, and previously recorded liens, including first mortgages on the condominium unit. In order to perfect this lien (to make it enforceable) the unit owners association must file a memorandum with the clerk of the court in the county where the condominium is located, within 90 days from the time such assessment becomes due and payable. If the condominium wants to enforce this lien - foreclose on the unit - it must do so within six months from the time the memorandum is filed.
MARYLAND: Here, similar to Virginia, any assessment, until paid, is a lien on the condominium unit on which it is assessed. However, unlike Virginia, in order for this lien to be enforceable, the condominium association must file a "statement of condominium lien" with the clerk of the appropriate court, within two years after the date the assessment becomes due. Under the statute of limitations for enforcing the lien, suit must be brought within three years from the date the condominium lien statement is recorded.
In both Maryland and Virginia, the association is entitled to collect not only the unpaid assessment, but interest, costs of collection and reasonable attorney's fees.
DISTRICT OF COLUMBIA: The situation is somewhat different in the city. The association need not only file any memorandum of other statement with the recorder of deeds, since the D.C. Condominium Act provides that all assessments levied against a condominium unit automatically become a lien on the unit from the date the assessment becomes due. Thus, there is no automatic cloud on title, thereby giving the condominium association somewhat greater rights in the District than in the surrounding jurisdictions.