budget, the Association’s Governing Board anticipates 100% Unit Owner compliance with fee and assessment obligations.  Most Documents require the Board to levy the annual assessment to its members and permit the payment of that annual assessment in monthly installments.  However, a failure to remit your fees to the Association, in most instances, will permit the Board to revoke your privilege to pay over the course of the year and to require you to post your annual assessment immediately.  In essence, your annual assessment, usually paid monthly, is Accelerated and the entire year’s assessment becomes due and owing immediately. 

 

Avoidable Consequences

 

A failure to comply with your fee obligations sets into motion a series of events which may adverse consequences for your property and for you.  Most Association’s will notify your mortgage lender as to your failure comply with your obligations and will request that your lender advance monies to the Association earmarked to satisfy your arrearage.  Your mortgage lender is permitted to pay of your arrears and to charge back to you the amount of money it has advanced to the Association with interest at the rate set forth in your mortgage and promissory note.  

 

In addition, the failure to fully and timely comply with fee obligations, allows the Association to record a Lien against your Unit/Home.  That Lien is typically, not discharged, unless and until the Association has received payment in full, including all other fees and expenses including Attorney’s fees, incurred by the Association, incident to collecting what is owing.  The Recorded Lien acts as a cloud on your Title and may prevent you from being able to sell your Unit or refinance your mortgage. 

 

When dealing with a Unit Owner who is delinquent, an Association is permitted to “file” a Civil Action Law Suit against the Owner seeking a Judgment from the Superior Court.  The Judgment sought by the Association seeks an award of not only what is due and owing for fees but all other costs incurred by the Association incident to collection.  The Judgment once awarded by the Court is Docketed and as such acts as a Statewide Lien against any other real estate owned by the Unit Owner in New Jersey.  The Judgment accrues interest at the Judgment rate and is good for a period of 20 years.  If the Judgment is not voluntarily satisfied by the Unit Owner remitting payment, the Association has available to it a number of avenues in which to collect.  These avenues include, but are not limited to, garnishing the Unit Owner’s wages, and levying on the Unit Owner’s bank accounts.  Neither a Wage Garnishment nor a Bank Levy can be accomplished without a prior Order of the Superior Court.  In the event the Unit Owner’s Unit is being rented, the Association also has the right to Levy on rents payable to the Unit Owner/Landlord. 

 

Communication is Key

 

The above mentioned collection scenarios are serious, warrant a Unit Owner’s full and immediate attention, and could result in the Unit Owner’s arrest pursuant to a Civil Bench Warrant.  Therefore, we strongly suggest that Unit Owner’s who are having difficulty in meeting their fee obligations to reach out and contact their Governing Board, their Association’s Managing Agent, and their Association’s Attorney immediately.  Communication is the key to successfully reducing the Unit Owner’s exposure to additional liability which comes from noncompliance.  Many Community Associations, especially in today’s economic environment, recognize Unit Owner’s financial circumstances and are willing to allow a Unit Owner to placed upon a Board approved Payment Plan which will allow the Unit Owner to pay off the arrearage over time.  Board approval is typically predicated upon a Unit Owner’s substantiated financial hardship and proven ability to meet the terms of the plan.