Condo Associations May Face New Challenges in Paying Bills

by Isaac Benmergui, Esq on November 23, 2011

Paying HOA fees incurred by a unit in foreclosure may get a lot harder on condo associations. A proposed bill by Senator Chris Smith seeks to prevent associations from spreading the common expenses of a unit in foreclosure to other properties in the building.

The bill, if passed, would take effect July 1, 2012.

Condo association can’t very well tell service providers they can only pay a percentage of a bill, say for trash removal, because the property going through foreclosure isn’t generating its share of the HOA fees.

Perhaps the bill’s intention was not to create a hardship on the other condo owners by forcing them to pick up the extra expenses. It could drive them into foreclosure as well, in some cases. Still, it’s creating a general shortfall which may impact the delivery of necessary services for everyone.

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