Tenant not paying condo dues!

9/14/2010:

What action can you take on a delinquent condo owner?

One Hoboken411 reader lives in a building where one particular unit owner hasn’t paid their condo association dues in ages – and is looking for advice.

“I am looking for advice from fellow Hoboken residents. I currently am part of a eight-unit condo building in Hoboken. The association has had an ongoing problem with one owner who feels that he does not need to pay his homeowners association monthly maintenance fee or any assessments that comes up.

He currently owes the association over $12,000 (this included monthly dues, assessments, legal charges and late fees).

We have had to dip into our pockets on more then one occasion to cover expenses due to his delinquency. We have filed a lien against him (and filed an updated lien recently to reflect new amount owed) which has accomplished nothing.

He currently has a renter in there now, so I know he is at least collecting rent from this tenant. We have sent certified letters and so on. I personally have never met the guy as his brother was occupying the unit at that time when I moved in and who has since moved out I have lived in the building for over 3 years and he has not paid a dime to the association since I moved in. I actually think he has never paid a dime at all since buying the unit. I am under the impression that he purchased this unit and others in the area during the housing boom for a quick flip and resell which obviously didn’t work out for him.

Does anyone have any suggestions, advice on what we can do besides filing the lien? I find it impossible that he can get away with this. We, as an association, are very frustrated. I am also curious to see if there are any other associations in the area that are in a similar situation.

Sincerely,
Frustrated on Monroe Street

33 Responses

  1. ajm says:

    Hire a lawyer and get a lien placed on the property.
    A judge may be able to put a freeze on the owners bank account to help collect some of the money.
    At the very least, a lien on the property gets you in line for payment when the person attempts to sell the property (or goes bankrupt). Keep in mind that you’re always in line behind the government (taxes) and any other lien holders that may have a claim to the property (1st mortgage, 2nd mortgage, etc).

    • whewwhewwhew says:

      Shut off his water, gas, and electric. Tell the tenant why this is happening. I bet he pays his dues real quick when he starts losing 2-3K a month.

      If that does not work you could also ammend the Condo rules to disallow renters if the other 7 people agree and prevent him from renting.

      [quote comment=”197322″]Hire a lawyer and get a lien placed on the property.A judge may be able to put a freeze on the owners bank account to help collect some of the money.At the very least, a lien on the property gets you in line for payment when the person attempts to sell the property (or goes bankrupt). Keep in mind that you’re always in line behind the government (taxes) and any other lien holders that may have a claim to the property (1st mortgage, 2nd mortgage, etc).[/quote]

      • bornandrazedinhobo says:

        They won’t be able to do this being the bills would be in the condo owners name……two options are get everyone together in the building and file a class action case against the owner for the back money plus legal costs……it can be done in small claims up to $14,000.

        If the property as a whole had received maintenance and the owner benefited from this and it exceeds up to about $500 or $800 you can then file a Theft of Service Criminal Complaint for services rendered that were not paid for. That may get them into Criminal Court and if the owner FTA’s then that add’s substantial weight in the civil case.

        From there you place a bank levy but the property would not be able to have a lien on it unless it is tax related. [quote comment=”197323″]Shut off his water, gas, and electric. Tell the tenant why this is happening. I bet he pays his dues real quick when he starts losing 2-3K a month.If that does not work you could also ammend the Condo rules to disallow renters if the other 7 people agree and prevent him from renting.

        [/quote]

      • ajm says:

        You can absolutely get a lien on the property that isn’t tax related.

        The simplest answer to this question is to get a lawyer who knows how to deal with these things. They will file a lien, make the appropriate attempts to contact the owner, sue if necessary, and deal with getting the courts to have accounts frozen and/or wages being garnished.

        You want the lien in case the court can’t find any accounts to freeze or wages to garnish. It also prevents the owner from selling the property without paying the association back what is owed.

        H411 – P.S. The headline is misleading. Of course the tenant isn’t paying the condo dues. It’s the owners responsibility to the Association, not the tenant’s responsibility.

        [quote comment=”197330″]They won’t be able to do this being the bills would be in the condo owners name……two options are get everyone together in the building and file a class action case against the owner for the back money plus legal costs……it can be done in small claims up to $14,000.If the property as a whole had received maintenance and the owner benefited from this and it exceeds up to about $500 or $800 you can then file a Theft of Service Criminal Complaint for services rendered that were not paid for. That may get them into Criminal Court and if the owner FTA’s then that add’s substantial weight in the civil case.From there you place a bank levy but the property would not be able to have a lien on it unless it is tax related.

        [/quote]

      • bornandrazedinhobo says:

        In NJ the court will not issue a property lien for civil lawsuits…….they can issue a lien against the owners vehicles, suspend their DL and Veh Reg, do a bank levy, and obtain personal property from inside the location through the Sheriff’s Dept for a Sheriff’s sale. I brought the issue up about a property lien before when I had sued civilly and for some reason in NJ the courts will not do it. Out of state some states will go after the property…..
        I’m sure the owner would not even answer an information subpoena if issued one but the chances of them even facing contempt charges are slim!

        If I were to go after the owner I would pursue the theft of services then file the civil case…..[quote comment=”197338″]You can absolutely get a lien on the property that isn’t tax related. The simplest answer to this question is to get a lawyer who knows how to deal with these things. They will file a lien, make the appropriate attempts to contact the owner, sue if necessary, and deal with getting the courts to have accounts frozen and/or wages being garnished. You want the lien in case the court can’t find any accounts to freeze or wages to garnish. It also prevents the owner from selling the property without paying the association back what is owed.H411 – P.S. The headline is misleading. Of course the tenant isn’t paying the condo dues. It’s the owners responsibility to the Association, not the tenant’s responsibility.

        [/quote]

      • ajm says:

        Gotcha… Maybe it was really a bank levy, even though I was told it was a lien. From the situation I was involved in, they did locate a bank account and the court put a freeze on a portion of the account that would cover the amount that was due. The court didn’t actually seize anything, but had the bank freeze that money until there was a settlement or a judgment. In our case, the owner decided to pay back what was owed, including legal fees and interest.[quote comment=”197340″]In NJ the court will not issue a property lien for civil lawsuits…….they can issue a lien against the owners vehicles, suspend their DL and Veh Reg, do a bank levy, and obtain personal property from inside the location through the Sheriff’s Dept for a Sheriff’s sale. I brought the issue up about a property lien before when I had sued civilly and for some reason in NJ the courts will not do it. Out of state some states will go after the property…..
        I’m sure the owner would not even answer an information subpoena if issued one but the chances of them even facing contempt charges are slim!If I were to go after the owner I would pursue the theft of services then file the civil case…..

        [/quote]

      • xxrjxx says:

        I don’t understand what you’re saying. In our association, we have liens on ALL of the units associated with members who have not paid outstanding balances owed. Are you stating that this is not the case? If so, you are not correct. Not only can you pursue a lien for outstanding balances, ultimately the association CAN foreclose on the unit. Before you get to that point, you can pursue a court judgement to have any tenant rents directed to an escrow account in order to satisfy outstanding balances.

        Better double check your sources-you may have had a situation that worked against you, but the reality is associations do have the ability to do as I’ve described…because we are doing it.[quote comment=”197340″]In NJ the court will not issue a property lien for civil lawsuits…….they can issue a lien against the owners vehicles, suspend their DL and Veh Reg, do a bank levy, and obtain personal property from inside the location through the Sheriff’s Dept for a Sheriff’s sale. I brought the issue up about a property lien before when I had sued civilly and for some reason in NJ the courts will not do it. Out of state some states will go after the property…..I’m sure the owner would not even answer an information subpoena if issued one but the chances of them even facing contempt charges are slim!If I were to go after the owner I would pursue the theft of services then file the civil case…..[/quote]

      • Rise From The Ashes says:

        Inbredandraisedinhobo likes to talk about matter that he has little knowledge. I think he read the applicable law on the back of his how to be a security guard at C-Town manual. [quote comment=”197381″]I don’t understand what you’re saying. In our association, we have liens on ALL of the units associated with members who have not paid outstanding balances owed. Are you stating that this is not the case? If so, you are not correct. Not only can you pursue a lien for outstanding balances, ultimately the association CAN foreclose on the unit. Before you get to that point, you can pursue a court judgement to have any tenant rents directed to an escrow account in order to satisfy outstanding balances. Better double check your sources-you may have had a situation that worked against you, but the reality is associations do have the ability to do as I’ve described…because we are doing it.

        [/quote]

      • bornandrazedinhobo says:

        Only inbreeding Rise comes from your parents which is why your so stupid and talk out of your ass instead of your mouth and speak about topics you have zero knowledge of….again Rise how many child abuse cases have you prosecuted or dealt with and name the cases you allege to have prosecuted regarding cops? You afraid Rise that you cannot back up your statements and hide behind a computer? [quote comment=”197404″]Inbredandraisedinhobo likes to talk about matter that he has little knowledge. I think he read the applicable law on the back of his how to be a security guard at C-Town manual.

        [/quote]

      • bornandrazedinhobo says:

        If you win a case in civil court in NJ according to the collection of judgements guidelines you cannot place a lien on property…..the balances must be from mortgage, utility, or tax related. It is clear n the collection guideline from the NJ civil courts website.[quote comment=”197381″]I don’t understand what you’re saying. In our association, we have liens on ALL of the units associated with members who have not paid outstanding balances owed. Are you stating that this is not the case? If so, you are not correct. Not only can you pursue a lien for outstanding balances, ultimately the association CAN foreclose on the unit. Before you get to that point, you can pursue a court judgement to have any tenant rents directed to an escrow account in order to satisfy outstanding balances. Better double check your sources-you may have had a situation that worked against you, but the reality is associations do have the ability to do as I’ve described…because we are doing it.

        [/quote]

      • Rise From The Ashes says:

        Isn’t a note/mortgage a security interest or lien on a property? Call me silly, but I suspect you are sniffing your crazy glue again.[quote comment=”197415″]If you win a case in civil court in NJ according to the collection of judgements guidelines you cannot place a lien on property…..the balances must be from mortgage, utility, or tax related. It is clear n the collection guideline from the NJ civil courts website.

        [/quote]

      • bornandrazedinhobo says:

        The only thing I’m smelling is your stupidity Rise…and if you had read my comment as an ace attorney you allege to be there would have been no reason to even reply…..how well did you do on the LSAT’s? Not well huh? [quote comment=”197423″]Isn’t a note/mortgage a security interest or lien on a property? Call me silly, but I suspect you are sniffing your crazy glue again.

        [/quote]

      • ajm says:

        Based on the statutes, it seems pretty clear that a condo association can have a lien and can foreclose on a property based on unpaid maintenance. (You can also get construction liens which are clearly civil and not tax/utility related.)

        NJ Statute Title 46:8B-21 Liens in favor of association; priority
        http://tinyurl.com/2cl7d43

        Some excerpts:
        “21. a. The association shall have a lien on each unit for any unpaid assessment duly made by the association for a share of common expenses or otherwise, including any other moneys duly owed the association, …”

        “f. Liens for unpaid assessments may be foreclosed by suit brought in the name of the association in the same manner as a foreclosure of a mortgage on real property….”

        [quote comment=”197415″]If you win a case in civil court in NJ according to the collection of judgements guidelines you cannot place a lien on property…..the balances must be from mortgage, utility, or tax related. It is clear n the collection guideline from the NJ civil courts website.

        [/quote]

      • xxrjxx says:

        The lien is placed first and remains until the judgement is satisfied. Like I said bnrh, my association is doing it now–we have liens on the units, have gone through the courts for judgements, and have recently advised tenants to pay rents into an escrow account. The balances owed from the unit owners are not mortgage, utility, or tax related. The are for maintenance payments and for fines and late fees associated with same. Your reality doesn’t agree with my reality.[quote comment=”197415″]If you win a case in civil court in NJ according to the collection of judgements guidelines you cannot place a lien on property…..the balances must be from mortgage, utility, or tax related. It is clear n the collection guideline from the NJ civil courts website.[/quote]

      • la-di-da says:

        Actually the true legal definition of a tenancy includes fee simple ownership…[quote comment=”197338″]You can absolutely get a lien on the property that isn’t tax related. The simplest answer to this question is to get a lawyer who knows how to deal with these things. They will file a lien, make the appropriate attempts to contact the owner, sue if necessary, and deal with getting the courts to have accounts frozen and/or wages being garnished. You want the lien in case the court can’t find any accounts to freeze or wages to garnish. It also prevents the owner from selling the property without paying the association back what is owed.H411 – P.S. The headline is misleading. Of course the tenant isn’t paying the condo dues. It’s the owners responsibility to the Association, not the tenant’s responsibility.[/quote]

      • Rise From The Ashes says:

        Stay with Law Enforcement Columbo – class action? Silly, the association is a legally recognized entity that can sue in its own capacity. [quote comment=”197330″]They won’t be able to do this being the bills would be in the condo owners name……two options are get everyone together in the building and file a class action case against the owner for the back money plus legal costs……it can be done in small claims up to $14,000.If the property as a whole had received maintenance and the owner benefited from this and it exceeds up to about $500 or $800 you can then file a Theft of Service Criminal Complaint for services rendered that were not paid for. That may get them into Criminal Court and if the owner FTA’s then that add’s substantial weight in the civil case.From there you place a bank levy but the property would not be able to have a lien on it unless it is tax related.

        [/quote]

      • bornandrazedinhobo says:

        If that was the case they would have sued instead of going on 411 asking what to do Ass’s………[quote comment=”197346″]Stay with Law Enforcement Columbo – class action? Silly, the association is a legally recognized entity that can sue in its own capacity.

        [/quote]

  2. mookie says:

    1. charge him all the late fees that are allowed via your condo bylaws, including fees on top of fees (ie. each month should be an additional fee on all the months he is late -compounding effect)

    2. put a lien on his property

    3. Additionally, if you want to get real nasty have your lawyer contact his banks (both primary and possible 2nd mortgage).

    4. go to court and have the judge put a lien on the rent s/he is collecting. included with this ruling his/her tenant will receive a notice from The Court that is they do not send the rent directly to the Condo Association they will become as liable as the owner.

    5. put a lien on his wages – am sure he will not want you to contact his employer – as you can directly garnish his wages with a court order.

    Consult your Association’s lawyer, but as an ex condo president you have a lot of options to squash this guy.

    Good luck

    • Rise From The Ashes says:

      Once you obtain a judgment for outstanding HOA dues you may be able to restrain his bank accounts. Your legal fees will be part of the judgment.

      You need to actually sue him, not just place a lien on the apartment. You may be able to garnish his wages and have his rent placed in escrow.[quote comment=”197324″]1. charge him all the late fees that are allowed via your condo bylaws, including fees on top of fees (ie. each month should be an additional fee on all the months he is late -compounding effect)2. put a lien on his property3. Additionally, if you want to get real nasty have your lawyer contact his banks (both primary and possible 2nd mortgage).4. go to court and have the judge put a lien on the rent s/he is collecting. included with this ruling his/her tenant will receive a notice from The Court that is they do not send the rent directly to the Condo Association they will become as liable as the owner.5. put a lien on his wages – am sure he will not want you to contact his employer – as you can directly garnish his wages with a court order.Consult your Association’s lawyer, but as an ex condo president you have a lot of options to squash this guy.Good luck[/quote]

  3. Sidd Finch says:

    As a homeowner, one has to file a registration with the Rental office in city hall each year whether or not you are renting it out. If they didn’t register their apartment, then they maybe renting it out illegally. Just another venue to pursue

  4. HOBORAT says:

    Change the locks on all the common doors 💡

  5. rich k says:

    Going forward, one way to give the association more cover would be to require that all tenant rents go through the association. The tenant writes the rent check to the Association, which then passes through the balance minus the maintenance and other co-op charges.

  6. GroundPowder says:

    Go to the tax office and see if the owner is deliquent. Go online to the Hudson County Board of Taxation and with the block and lot number get all the information on the property and the owner. Now go online and search google and facebook and get more information.

    Now you have info that you can use against him if it in your best interest.
    But make sure you come up with a stratergy the entire association agrees with, including your legal council. Its the money you want to recoup. Your actions should not prevent him from paying you.

  7. MrHightower says:

    Do NOT take any action against the tenant that may be residing in the condo unit. The courts look disfavorably upon this type of action.

    You need to examine the Master Deed and By-Laws for your condominium association to determine the procedures you must take to secure a lien against the particular unit. We do work for attorney’s that represent condo associations in foreclosures of their condominium line charges.

    Basically, you need to file a condo lien claim against the unit owner pursuant to the terms of your Association By-Laws. Provided that the proper avenues are pursued and NJ notice provisions are complied with, you may actually get to the point where the association forecloses upon the property owner by virtue of their interest in the outstanding condominium charges. In any event, a condo lien claim appearing in the county register’s office must be satisfied before that unit owner transfers title or before the unit owner goes to re-finance any debt on the property.

  8. MrHightower says:

    Re-reading your original post, if you already have a a lien filed against the owner, you have two options

    (1) continue to dilegently update your lien and you will be paid when that owner goes to transfer his unit, or when he goes to mortgage his unit

    (2) initiate foreclosure proceedings for the lien. This method, however, will be complicated by the existence of the tenant in the unit.

  9. Stpaddygirl says:

    Wow and to think when I fell $600 behind when I was out of work (3 months) my neighbors were ready to stone me…..$12,000 WOW~

  10. Taurus10 says:

    Thanks everyone for your input, much appreciated! We are very frustrated at this point considering we are all first time buyers and have to keep shoveling out extra money because of the situation. With regards to filing a criminal report for theft of services I believe we would have basis for that. Part of the monthly maintenance fee goes towards electric for the common areas, water for the whole building and trash/recycling. We have also done repairs to the building that benefit the entire building.

    We currently have a lien filed against the unit. We filed one in 2008 and just filed again updating the amount in 2010. I have heard from the grapevine that there is no mortgage on the unit however the owner was very close to bankruptcy not too long ago but managed to escape it somehow. I feel like the lien however isn’t going to do anything until he tries to sell and I don’t forsee that happening anytime soon.

    We are currently in the process of having to side the front of the building due to water issues and each of us had to shovel out x amount of dollars to cover this and additional to cover the assessment this owner we just expect will not pay. He has been notified but of course he feels he can ignore it.

    I really would rather not sit back and wait for the lien to do something, he can not keep getting away with this. What is we all just decided not to pay….

    • getz76 says:

      Good luck. Have the association sue him. Most judges in this situation will allow garnishment of the rent, especially with another assessment coming. You will also make him appear in court, which is the last thing this guy wants to do. He wants to keep a low profile to avoid the angry mob.

      That lien isn’t going to do anything for you for a long time, and even then it is going to be brutal to collect (usually screws up the closing and takes a while to find a mortgage lender who will lend without clear title).

      Update us on the happenings, if you have a chance. I really hope it works out for you guys.[quote comment=”197402″]Thanks everyone for your input, much appreciated! We are very frustrated at this point considering we are all first time buyers and have to keep shoveling out extra money because of the situation. With regards to filing a criminal report for theft of services I believe we would have basis for that. Part of the monthly maintenance fee goes towards electric for the common areas, water for the whole building and trash/recycling. We have also done repairs to the building that benefit the entire building.We currently have a lien filed against the unit. We filed one in 2008 and just filed again updating the amount in 2010. I have heard from the grapevine that there is no mortgage on the unit however the owner was very close to bankruptcy not too long ago but managed to escape it somehow. I feel like the lien however isn’t going to do anything until he tries to sell and I don’t forsee that happening anytime soon.We are currently in the process of having to side the front of the building due to water issues and each of us had to shovel out x amount of dollars to cover this and additional to cover the assessment this owner we just expect will not pay. He has been notified but of course he feels he can ignore it.I really would rather not sit back and wait for the lien to do something, he can not keep getting away with this. What is we all just decided not to pay….[/quote]

      • ajm says:

        If you have the lien, he won’t be able to get a mortgage on the property. If he doesn’t have a mortgage then you’d be first in line to get repaid (unless he owes back taxes and then you’re second).
        If you are the first lien on the property it’s much easier to foreclose because you don’t need to get the lien holders above you to agree. If you can foreclose, then you essentially force the sale of the property in order to be repaid. [quote comment=”197432″]Good luck. Have the association sue him. Most judges in this situation will allow garnishment of the rent, especially with another assessment coming. You will also make him appear in court, which is the last thing this guy wants to do. He wants to keep a low profile to avoid the angry mob.That lien isn’t going to do anything for you for a long time, and even then it is going to be brutal to collect (usually screws up the closing and takes a while to find a mortgage lender who will lend without clear title). Update us on the happenings, if you have a chance. I really hope it works out for you guys.

        [/quote]

  11. getz76 says:

    ajm has a great point. You did mention he does not have a mortgage. If so, you are the first lien and you could foreclose. Had not thought about that. Who cares what the unit sells for as long as it clears at least $12,000… I bet you get your cash pretty quickly once he gets the foreclosure papers…

  12. Dperez says:

    My condo association is going through the exact same thing. We just put a lien on one of our tenants. As of now, we have told the maintenance people to not clean their floor and put up a sign prohibiting them from using our garbage facilities (yes, it’s hard to catch them using the facilities but it drives the point home) Bottom line, give them little or no benefits from maintenance that you are paying for. Good luck.

    • Stpaddygirl says:

      I would just throw my trash in the nieghbor’s dumpster but that’s just me:)[quote comment=”197446″]My condo association is going through the exact same thing. We just put a lien on one of our tenants. As of now, we have told the maintenance people to not clean their floor and put up a sign prohibiting them from using our garbage facilities (yes, it’s hard to catch them using the facilities but it drives the point home) Bottom line, give them little or no benefits from maintenance that you are paying for. Good luck.[/quote]

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