Owner/Board Member does not always pay Common Charges in full

Greetings:

I am a owner of a seasonal waterfront vacation condo. Here are some details:

- 7 units
- All 7 Unit Owners are on the Board of Managers
- Condo Fees are paid quarterly and vary by square footage of the unit. Smallest unit pays 9% of the budget.
Largest Unit pays 19%.
- 37K annual budget
- Property is open from mid-April to early November. Weather dependent.
- No full time residents. Most owners use the property on summer weekends.
- Board meetings are usually Memorial Day weekend and Labor Day weekend.
- I am the Treasurer

Issue:
There is one owner who refuses to pay any part of his common charges related to legal fees. The association has an attorney and occasionally uses that attorney for questions from Unit Owners, by-law and rule interpretations, etc.. If there are no legal fees for the quarter, then the owner pays the common charges in full. To date, the owner has accumulated about $350 in unpaid bills, including interest and penalties. He has been sent a bill, as has his attorney, but to date , no payment.

The by-laws are very clear that there is no exemption or waiver of common charges. They are also very clear on the collection process.

I guess there are two approaches here:

1) Leave it alone. Since he is not current; he cannot vote at board meetings, rent his unit, or get reimbursed for expenses. He is somewhat marginalized. He knows this and has chosen to not attend the last two Board meetings. He owes a small amount of money and starting a legal process takes time and enjoyment away from what little time most of us get to spend using our condos during the summer.

2) Follow through with the collection process , including liens and foreclosures. The Board voted at its last meeting 6-0 to reserve the right to begin the collection process at a time of its choosing.

Currently, we are using the first approach. If the amount of unpaid dues ever gets high enough, then maybe we will shift to approach 2.

There is a longer story here, and this Unit owner has used his own attorneys in the past to try and force the Board to "see it his way", but we are trying to leave personal feelings out of this. I won't dive into any gory details unless asked.

Is there a better way to handle this? Are we setting a bad precedent ?

Thanks.

Gory Details...

Please go ahead, I am up for some good HOA reading!!!

So Howard you are living proof that even on properties with just 7 units seems you have yourself one PIA.

Odds would be against that but lucky you.

An owner or Board member does not have the power to adjust the payment amount of their own CCs.
Whether it be for legal fees or any other justification.

Therefore he has put himself into a position where the Board must enforce the rules. If you ignore his behavior IMO you are sending him a bad message that HE sets the terms for payment.

In many cases not all people like this need to be shown their actions will not be tolerated and there will be consequences if not more tha likely things won't change or might get worse.

IMO I would proceed with collection under the terms set forth in your documents and or state law with your attorney's assistance. As this must be handled by the letter of the law. Lien, foreclosure what it take to send this owner a clear message.

Good luck....

Well, its not that the Unit Owner can't serve on the board, its that they can't vote unless they are current with respect to dues and special assessments. They are more than welcome to come to the meetings, but they can't vote. By-laws are very clear on that.

The following is from CT law:

19) May suspend any right or privilege of a unit owner who fails to pay an assessment, but may not:

(A) Deny a unit owner or other occupant access to the owner's unit or its limited common elements;

(B) Suspend a unit owner's right to vote or participate in meetings of the association;

(C) Prevent a unit owner from seeking election as a director or officer of the association; or

(D) Withhold services provided to a unit or a unit owner by the association if the effect of withholding the service would be to endanger the health, safety or property of any person.

Of course you don't live in CT, but you probably should check your state laws, since they are often updated more frequently than bylaws. They also trump bylaws. And there is Robert's Rules of Order which is, according to most states, stated to be the authority for procedures that are not specifically stated in the state law or bylaws. You can go online for Robert's Rules, but I am pretty certain they, too, do not allow for a member to be denied the right to vote or to hold office under these circumstances. Finally, the fact that this is the law anywhere in the US would also have some baring on any legal matter. Of course, the law of MD would be the most influential, but laws in other states can have some weight. Good luck.