As treasurer of a Condominium Corporation I do the deposit of fees within the first couple of days of the new month. We consistently have a few people who are late payers, they are from days to months behind. I find this very frustrating when it comes to doing the books. These same people inform me that I am out of line asking for the fees to be available by the first day of the month (our condo bylaws state that fees are due the first of the month and that 12 postdated cheques are requested). I have also been asked to invoice for the condo fees. I feel is out of the question as for one thing I am a volunteer and I feel when someone buys a condominium unit they should know the obligation they have committed themselves to. Can we charge a penalty on these late fees? If they continue to go unpaid can we recover the late fees and penalties through the Estoppel certificate when these people sell their units? Do you have any other suggestions on how to deal with this problem? If I phone these people they are very nasty and say I am going over the top on this issue, in the meantime we are hundreds of dollars behind in fees.
Thank-you , Concerned Treasusrer and Board member.
Dear Concerned Board Member,
You are not the first to be experiencing the resistance of owners paying fees on time and the lack of respect for fellow owners when the need for the condominium fees to be paid in a timely manner is ignored. The bylaws for your condominium will state the process for unpaid fees and can include charging interest after the "specified number of days" are achieved, with the fees unpaid. Interest is to be charged in accordance with the bylaws and is not to exceed 18% annually.
Bylaws also may have a "Fining for Breach of Bylaws" provision which enables the Board of Directors to impose a monitory fine for not paying the fees withing the time period specified in the bylaws. (this action can only be implemented if the bylaws have this wording, in compliance with the Condominium Property Act of Alberta)
Should an owner choose to sell their unit and the fees are unpaid, yes, the Estoppel certificate would show that there are outstanding fees and interest charges. These outstanding amounts would then be required to be paid either by the seller of the unit or the new buyer, dependent on the working in the Purchase Contract. (all Purchase contracts should have a condition that the Seller pay any and all outstanding condominium fees, special assessments and interest charges).
The bylaws typically state a period in which, if the fees remain unpaid, the action that the Board of Directors is to take, is to register a Caveat for Unpaid Fees and Special Assessments, including Interest, against the Unit title. This period is typically 90 days. If the bylaws do not have such a clause, the Board of Directors can adopt a policy stating the period of time that will result in a Caveat being registered. Once the Board had decided to act on this bylaw or to adopt a policy it is important to send a notice to all owners informing them of this intent or policy. A notice should be sent to all late fee payers informing them of the policy and requesting that they pay the outstanding fees and that they keep them current. Be sure to establish a date that late fees are to be paid and clearly state the action(s) that will be taken should they continue to be late or remain unpaid.
Another action that can be taken is to inform the Mortgage company, found on the title to the unit, that this owner is in arrears on their condominium fees. Lender will often pay the arrears and deal with the owner.
Once a Caveat has been registered on the title you are required to send a notice to the owner(s) and the lender shown on that title, informing them of the registration and the reasons. Once the caveat is registered the Board of Directors can begin proceedings to Foreclose on that unit to collect the late fees owing.
If the unit is occupied by a tenant and not the owner, the Board may send a letter to the Tenant & the Owner directing the tenant to pay the rent to the Condominium Corporation until such time as all arrears are paid. Any surplus, after arrears are paid, is to be paid to the Owner.
Often owners in a condominium forget or don't really understand that when the fees are late or remain unpaid for any period of time, the result is a shortage in funds to operate and maintain the building and provide the services. The Board of Directors have many solution as there are many consequences when fees remain unpaid: (a few examples)
- when a building goes without repair, services, or has evidence in the minutes, that owners do not care enough about their investment to pay their share of the costs (the fee), when a buyer is examining the operations of the corporation (having a professional Condo-Check Document Review) completed, they may offer a lower price or not buy in this condominium project due to the stress of needing to manage short of funds due to this problem,
- no-one wants to volunteer to be on the Board of Directors as it is stessfull to be constantly chasing fellow owners for money,
- when there is a cash shortage the only option left for the Board of Directors is to call for a Special Assessment (a cash call) at which time the owners who do pay on time are now required to pay again to cover the shortfall which is due to other owner not paying their fees, and
- Professional mangers and trades and services will not provide services or offer preferred pricing to Corporations who are stressed financially.
I hope this brief response will give you the options and information required to get the attention of these late payers. If your bylaws do not allow your Board of Directors to charge for late fees or to fine owners for breach of bylaws please hire a condominium lawyer to have them updated.
Thank you for your question....Cheers!