Condominium collection is structurally harder than cooperative collection, and boards are often surprised by that. A condominium unit owner holds a deed. There is no proprietary lease to terminate, no holdover proceeding, and no quick route to taking the apartment back.
What the condominium has instead is a lien on the unit for unpaid common charges, which can be filed and then foreclosed much as a mortgage would be, along with the right to sue the owner personally on the debt. Used well, that combination works. Used passively — a lien filed and then left alone — it can leave a building waiting years to be paid, and sometimes paid only in part.
We represent condominium boards and managing agents in common charge collection. Call 212-233-1233 or email [email protected].
The Common Charge Lien
The lien is the building's core security, and its value depends almost entirely on what else is already recorded against the unit.
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Filing the lien
The Real Property Law allows the board of managers to file a notice of lien against a unit for unpaid common charges, and the lien runs with the unit. It should be filed early and kept current, because a building that waits is a building whose claim is growing while its security stays fixed at the amount it recorded.
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Priority is the whole issue
In New York, a common charge lien is generally subordinate to a first mortgage of record. This is the single most important fact in condominium collection, and it is where boards coming from other states go wrong — New York does not give condominiums the priority position that some jurisdictions do. If the unit is heavily mortgaged, foreclosing the lien may yield little, because the mortgage gets paid first.
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Foreclosing the lien
The lien can be foreclosed in much the same manner as a mortgage, forcing a sale of the unit. Where there is meaningful equity above the mortgage, this is effective and the threat of it frequently produces payment. Where there is not, foreclosure can cost more than it recovers, and a different route is better.
Suing the Owner Personally
The debt is the unit owner's obligation as well as a charge against the unit, and the personal claim is often the more practical one.
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A money judgment
The board can sue the unit owner directly for the unpaid charges and obtain a money judgment, enforceable against income and assets generally rather than only against the apartment. For an owner who has equity elsewhere, earns well, or simply wants the judgment gone, this produces payment faster than a foreclosure.
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Pursuing both
The lien and the personal claim are not mutually exclusive, and in many files the right approach is to preserve the lien while pressing the personal claim. The declaration and bylaws also commonly shift legal fees and late charges to the defaulting owner, which makes pursuing smaller balances viable.
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When the unit is rented out
An investor owner collecting rent while not paying common charges is a specific and common problem. Depending on the bylaws and the circumstances, the building may be able to have a receiver appointed to collect the rents and apply them to the arrears, which reaches the money before it gets to the owner. For an absentee owner, this is often the most direct pressure available.
Situations That Change the Strategy
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The mortgage lender is already foreclosing
When a lender forecloses, the board should be watching the case rather than assuming it will be taken care of. The building's position, what happens to pre-foreclosure arrears, and what the purchaser at the sale becomes responsible for all depend on the papers and on the building being named and heard. A condominium that ignores a mortgage foreclosure on one of its units can find its arrears extinguished along with the lien.
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The owner has died
Common charges keep accruing against an estate that may have no representative. The building can petition for one to be appointed rather than wait — see unpaid charges after a unit owner's death.
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The owner has filed for bankruptcy
An automatic stay stops collection immediately. Charges that come due after the filing are generally treated differently from those that accrued before it, and proceeding without relief from the bankruptcy court can expose the building to sanctions.
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The owner is disputing the charges
Owners commonly respond to a collection demand by claiming the building failed to repair something, that an assessment was improperly adopted, or that the charges were miscalculated. Whether that is a defense or merely a complaint depends on the declaration and bylaws — but it means the building's own records, resolutions and repair history become part of the case.
What a Managing Agent Should Keep Current
- An arrears ledger that can be defended line by line, with every charge traceable to the declaration, bylaws or a board resolution
- Liens filed early and updated, rather than one stale filing from two years ago
- A current title picture on delinquent units — mortgages, tax liens and other encumbrances determine what the lien is worth
- Records of every demand sent, with proof of mailing
- Notice of any mortgage foreclosure, bankruptcy filing, death or transfer affecting a delinquent unit
- Board resolutions authorizing assessments, late fees and the referral of files to counsel
Speak With Our Firm
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Choosing the remedy that actually collects
The useful judgment in condominium collection is made at the beginning: whether this file is a lien file, a personal judgment file, a receivership, or one to hold and monitor behind someone else's foreclosure. Filing a lien and hoping is the default, and it is frequently the most expensive option.
Call 212-233-1233 or email [email protected]. For cooperative buildings, see collecting unpaid maintenance.
