When conflicts arise between residents in a condo building—and in my near West Chicago suburb this kind of living arrangement now comprises nearly one-fifth of all of the housing—they can set up ways of talking and jointly finding solutions instead of engaging in legal warfare or conducting a long Cold War.
Dwellers in condo buildings are not just tenants who must follow the landlord’s rules. They are owners who have to run their building together, collectively. Perhaps the toughest conflict that comes up is when a resident doesn’t pay the montly fees.
Some of the condo’s board members may not see it’s a conflict, but it is: you want them to pay their monthly assessment and they are effectively choosing not to. You say they have to and your by-laws say they have to, but they’re showing in practice that they don’t have to!
You certainly hope they do: it takes money to keep a building in shape, especially some of the older condo buildings. The money comes from a monthly fee each condo resident pays as well as “special assessments”—extra money each unit owner has to chip in. But in the current economic crisis there are buildings in which one or more owners stop making their monthly condo payments or cannot not come up with the money for the special assessment. The Association’s board of directors has to decide what to do about it. Here are three possible routes:
- The traditional route: commence collection, and then legal action, and allocate all the costs of collection to the homeowner; the money will be paid from the proceeds of the sale when the unit finds a new buyer; some condos can forcibly evict the owner and then rent out their unit until such time as the owner, who is still the owner, either loses the unit to foreclosure or comes up with the money to pay the “arrearages”, all of the accumulated fees owed the Condo Association;
- Do nothing: some boards in smaller buildings shy away from aggressive legal actions but also do not want to talk face-to-face with their non-paying and non-complying neighbors; if the association has a professional property manager they let this person take whatever measures he or she sees fit.
- Ask a person on the board or in the Association who is good at seeing the other side’s point of view or has some training in being a third side facilitator to intervene to get the Board and the non-paying resident or non-complying resident talking. If the conflict threatens to escalate, they can hire a professional mediator. If the association has a property manager, the board can ask the manager to promote and set up an informal conversation between the non-paying resident and a board member, or to bring in a mediator. This may be either in lieu of or in addition to a formal board meeting that the non-compliant owner may be entitled to under the by-laws.
The problem with the “commence collection” strategy, if pursued by itself, is its cost in terms of financial risk and human relationships. If it facilitates a foreclosure, everybody will lose, even though the resulting paper trail may make it possible for the Association to eventually get paid the back assessments owed.
In some states the Association can also get a judge to allow it to actually evict the non-paying neighbor! But to rent out or even purchase the unit is a lot of work, responsibility, and risk for an association. Plus, it’s harsh and distasteful to force a “delinquent” unit owner out of house and home and can cause more tension and conflict among those remaining.
Certainly the condo association can consult with its attorney and be clear on all legal options. A letter from the attorney is not a bad idea: the Association needs to protect itself and in fact is legally required to intervene to obtain compliance. But somebody needs to be communicating directly with the non-complying resident! Probably not the Association’s attorney, but a board member, another resident, the property manager if the Association has one, or a professional mediator needs to be facilitating a conversation that connects the parties and seeks solutions.
Condo boards and condo residents can find new, more peaceful and more effective ways of defending the association’s collective interest. When condo officers and residents are talking without blame or fear, they often find solutions that nobody would have dreamed of if they had stuck exclusively to legal action and collection. As California-based mediator David Stein has said, “a condo is after all a community. Like a community, it can come together to explore possible ways to deal with community problems.”