MD Squared Property Group
Condominium boards in New York have a multitude of means to ensure unit owners fulfill their obligations. When dealing with collection issues, occasional reminders are typically enough; when these strategies fail to produce results, however, more powerful measures can be taken.
When a condo’s rent is not paid by the unit owner, who is renting out their space, it can be difficult to collect.
The condominium may send notice and demand payment from the renter but if they are reluctant due to fear of retribution from their landlord (which is illegal), then further action must be taken.
To recover these arrears owed, condos can escalate matters through legal avenues against both parties resulting in more assured repayment for all involved.
Condo associations where owners have arrears can withhold common amenities as an effective tool for ensuring payment.
With access to health clubs, swimming pools, and parking facilities suspended, delinquent unit owners may be reassured that careful consideration has been given to their condo governing documents and applicable laws by legal experts prior to taking any action.
Board members have the right to demand a full year’s worth of common charges without prior notice. This could lead to unexpected, substantial costs for unit owners and should be taken into consideration when budgeting for condo fees.
Condo boards are vested with the power to record a common charge lien against delinquent unit owners, who have failed to make full payments in accordance with governing documents. By issuing liens and registering them into local land records, condo associations alert creditors of their ultimate right of foreclosure should payment not be forthcoming.
As an alternative measure, some boards may choose to offer conditional financial arrangements that involve additional interest fees or confessions of judgment if the owner fails to meet its contractual obligations.
Condo boards have the option to pursue a money judgment against non-paying unit owners. If successfully attained from a court of law, such judgments could convince delinquent owners to enter into an agreement for repayment or be motivated by their own accord.
These monetary rulings are generally valid up until 10 years after being issued. They can also offer greater potential for collection as they reach beyond just the condominium in question and target other assets belonging to its owner.
Condo owners who fail to pay their bills may be able to evade collection by means such as paying with money orders or not disclosing a bank name and account number. However, restraining notices can still be issued against the unit owner’s known accounts in order for the condo to execute it – even if the homeowner has closed that particular account afterward.
For instances where there is no knowledge of which banking institution an individual uses, strategies exist for discovering this information. Once restrained, banks are compelled under law to turn over funds pursuant to these proceedings initiated by condominiums.
To ensure payment of the outstanding debt, NY Marshals can take action beyond liquid assets by targeting non-liquid securities such as brokerage accounts and stock holdings. Additionally, a levy on any businesses owned by the unit owners will prevent them from collecting salaries without first settling their condo obligations.
Wages could be subject to garnishment if a unit owner is employed, with up to 10% of their earnings liable. Garnishing actions alone can cause an individual in debt to pay off arrears even when the money has been stashed away for other purposes.
As an alternative to collecting a unit owner’s debt, recording a money judgment lien against additional real property may be pursued. Similar in nature to the priority of common charge liens on condominium units, this approach can facilitate foreclosure and help ensure you collect what is due.
Through a range of tactics, unit owners can be assisted in recovering assets transferred to another party with the intention of avoiding repayment. In addition, if money is owed to the owner by other persons or entities, as Colbert. J states, lawyers have expertise in hunting down those funds and ensuring they are received.
It happens many times that board members are presented with cases of unit owners who are behind on their payments but appear to never-the-less own items or personal property of great worth – such as cars, boats, and motorcycles.
In these situations where the ownership is clear, they should make an effort to collect arrears through the seizure of valuable possessions; yet it is important to bear in mind that sometimes even a brand new car can simply be leased from another company.
If conventional methods of debt collection fail to produce any positive results, it can resort to discovery in order to uncover assets that could lead down a viable path for successful repayment.
Lawyers may serve written interrogatories that must be answered truthfully and under oath. They can also potentially obtain court orders requiring an appearance at deposition hearings or subpoenaing documents from relevant parties regarding the debtor’s financial standing.
Navigating the condo landscape can be challenging for even experienced counsel, which is why it’s important to take a methodical approach.
Condo governing documents often provide reassurance in this endeavor through their allowance of attorneys’ fees and costs being charged back to delinquent unit owners. This is an incentive that may ultimately encourage them towards resolving outstanding debts more favorably.
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