I recently read an article where a homeowner was upset about her condominium association initiating foreclosure proceedings against her for her failure to pay her assessments. While people may read this article and feel sorry for the homeowner, one should keep in mind that the homeowner failed to appear at court to protect her interests and, more likely than not, failed to respond to the Association and its attorneys attempts to contact the homeowner prior to the foreclosure proceedings even being initiated. It does not appear that the homeowner is the helpless victim of the actions of a condominium association, but instead, that the homeowner apparently avoided her obligation to pay assessments and did not take any action to prevent the events that followed.
What is all too common in these types of situations, and what is obvious from this article, is a homeowner being reactive to a situation rather than being proactive – reactive meaning waiting for problems to appear before addressing them as opposed to being proactive by planning ahead and anticipating problems. Homeowners who take proactive measures, such as contacting the Association or appearing at court, can protect themselves and their interests, and work with the Association to avoid unattractive remedies such as lawsuits and foreclosures. However, when a homeowner fails to be proactive and does not respond to contact attempts from the Association and its attorneys, the Association is often forced to resort to litigation.
One should also consider that Boards have a fiduciary duty to collect assessments and a homeowner’s failure to pay the assessments can impact the community as a whole. An Association imposes assessments and fees on each homeowner to pay for operations and maintenance expenses. This is important as it helps protect property values by ensuring each home is up to neighborhood standards. As Molly Foley-Healy points out in her previous blog, “assessment income is generally the only revenue stream available to not-for-profit associations. As a result, the problem of delinquent assessments is a very real challenge for associations in these tough economic times. Without having effective methods for collecting assessments, associations are unable to maintain the common elements, provide services to residents and protect property values. Ultimately, the paying owners in associations pick up the tab in the form of higher assessments.” That being said, most Associations would rather work out an agreement with a homeowner to get the assessments paid, rather than chasing a homeowner for what is owed or having to make the difficult decision of foreclosing on the property.
Homeowners should, as the article suggests, attend a board meeting or contact the Association if they see themselves in a position where they have stopped paying assessments and, if a homeowner is contacted by the Association or its attorneys, he or she should promptly respond. Taking a proactive approach may save everyone considerable time and money in the short and long run.