In the face of record number foreclosures, one of the residual points of concern is when condo owners dues begin to suffer. When a condominium goes into foreclosure, more than likely the dues for that unit have not been paid for months – long before the property went into foreclosure.
Considering a monthly condo fee of $300, each unit represents $3,600 to the income of the condominium owners association. Benny Kass, a legal columnist for the Washington Post, points out that when the condo owners quit paying their fees, then the condo association may face a shortfall such that it will not be able to pay its bills, for instance, pool care, maintenance and utilities.
If your association faces such a scenario, Mr. Kass points out a few options: To get through the short-term shortfall, the association could institute a special assessment to make up the difference. Next, the board of directors could create a "zero-tolerance" policy for late condo association fees. Instead of waiting months to take action, begin proceedings to collect late dues within 30 days. Waiting too long actually makes the situation worse for the condo owner to pay the overdue bill.
The association could also begin requiring escrowing three months’ of condo fees to protect the governing body from this type of problem. When it comes to condo fees, the association needs to be vigilant that it has policies in place to protect itself financially for the betterment of the whole development.