The ongoing COVID-19 pandemic affects us all as individuals, as well as a condominium community. We at Feniger & Uliasz, LLP, have fielded countless questions from hundreds of condominium boards, managers, and associations that we represent regarding NH condominium law during this unprecedented time in history.
The collection of assessments rises to the top of those concerns. While we want to be sympathetic to those in hardship due to the effects the pandemic has placed globally on several economies, we must also understand that the association must continue to function. From providing services, maintaining the landscape, and repairing and replacing facilities, these tasks are only accomplished with the monies collected from unit owners through assessments.
Much like the government, an association does not generate income. Thus, associations can only spend what is collected. Furthermore, if the Board of Directors fails in its fiduciary obligations, there is accountability. Remember, not every unit owner has suffered a change in their financial circumstance, and the Board is obligated to all unit owners.
So, what does a Board do when a unit owner asks for a waiver of their monthly assessment? That’s a tough question, but, in general, the Board is obligated by the NH condominium law documents to collect assessments, implement fines and late fees, as well as proceed to collection within 60 days of unreceived payment. If the Board chooses to grant a waiver to one, it must extend the waiver to all. As you can imagine, that would quickly place the association in dire financial circumstances. Even a healthy reserve would not remedy the problem because, as we know, reserves are not for operating costs.
Fortunately, unit owners may have protection against foreclosure. So, if there is a payment to be missed, that might be the better choice. Regardless of the outcome or circumstances, the Board is compelled to collect assessments; even in these difficult and uncertain times.
Unfortunately for condominium associations, the answer may not be as simple. Various State and Federal emergency orders have put the brakes on some collection activities and bolstered the Fair Debt Collection Practices Act (FDCPA). In general, the courts have held that condominiums are not “debt collectors” as defined by the FDCPA. In this instance, the Board needs to consult with its lawyer. A misstep, intentionally or unintentional, could result in significant liability against the association, including multiple damages and attorney fees awarded to the unit owner making the claim that the FDCPA, or some analogous State law, was violated.
If you have questions regarding NH condominium law, or any other circumstance related to the management, administration, or operation of your condominium association during these difficult times, give the law firm of Feniger & Uliasz, LLP a call. Our team can set you on the right path.
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