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The Importance of Payment for Common Expenses and Maintenance Fees in Community Associations

Times are tough all over and those who live in community associations are no exception.  When money is tight, some association members make paying their maintenance fees a low priority.  This can be a big mistake because, if ignored, a small amount of delinquent maintenance fees can expand into an unexpectedly large debt.  

   
Each member of a community association is responsible for paying his or her share of the common expenses.  Common expenses are things like snow removal, swimming pool maintenance, and lawn care.  When a member does not pay his share, the other members must pay more to subsidize the delinquent member.  In the same way, when the association must pay its legal counsel to collect those delinquent maintenance fees, the other members must pay more to subsidize that cost, as well.  Fortunately, the governing documents of most condominium associations, as well as New Jersey law, permit the association to pass on those costs to the person responsible: the delinquent member.  

   
An association member will be given many opportunities to address his delinquent maintenance fees before significant legal costs begin to accrue.  The association will first send out reminder letters to the member.  After a certain point, if the debt is not paid, the account will be referred to the association’s legal counsel.  The attorney will typically send out a collection letter.  The amount due in the collection letter will include the total debt plus a small amount of legal fees to review the file, calculate the amounts due, and prepare the letter.  If, after 30 days, the member has not paid the account or made arrangements to pay it, further action must be taken such as recording a lien against the unit and filing collection litigation.  Each time the association’s legal counsel must perform work to collect the delinquent maintenance fees, the association will charge these fees to the member’s account.  Legal fees will continue to accrue against the member’s account until the matter is resolved and all amounts due are paid.  Thus, while a member may believe his maintenance fees total only a couple thousand dollars, the legal fees may eventually equal or exceed that amount.  The association’s board of directors has an obligation to the association and all of the members who pay their fees each month to see that as much of this amount is recouped as possible.

   
Accordingly, it is extremely important for an association member to ensure his maintenance fees are paid when due and that if he becomes delinquent that he makes repayment a priority.

Full post as published by New Jersey Law Blog on July 17, 2008 (boomark / email).