Published on: May 13, 2020
COVID-19 has impacted every aspect of our lives and has certainly already had a significant financial impact to all. Unfortunately, this past week the Massachusetts Attorney General issued Regulations [click here] that directly impact the collection of past due common expenses. The purpose for the Regulations was to protect consumers from certain debt collection activity. However, in doing so, the Regulations effectively prohibit associations, property managers and the attorneys from initiating, filing or threatening to file a new collection lawsuit. While the Regulations do not apply to Mortgage Holders or Landlords, it appears that the Attorney General did not consider the impact on Condominiums or Home Owner Associations. Rather, the unintended consequences of these Regulations means that neighbors are carrying the expenses of the condominium for the other owners that cannot pay. Clearly, this is unfair and cannot be what the Attorney General was hoping to accomplish with these Regulations.
MEEB is actively seeking to convince the Attorney General that the collection of unpaid common expenses for Condominium and Home Owner Associations should be exempt from these Regulations. MEEB Attorneys are working together, with a coalition of other law firms representing associations, and with the New England Chapter of Community Associations Institute and the members of the Real Estate Bar Association, to obtain an exemption for Massachusetts associations. Nevertheless, until we are successful in getting the Attorney General to exempt Condominium and Home Owner Associations from these Regulations or the expiration of the Regulations in 90 days (or sooner upon the expiration of the Massachusetts state of emergency), clients are strongly encouraged to be in compliance.
To that end, Associations and property managers should no longer send any communications to an owner that threaten an action for the failure to pay past due common expenses. You may still send statements or invoices reflecting the balance due as long as it does not include any other language threatening collection or legal action.
As your counsel, we believe that on your behalf there may still be certain steps that we may take to preserve Association’s superlien rights which would be consistent with the Attorney General Regulations. Therefore, we strongly encourage you to continue the practice to turn over accounts which are 90 days past due so we may review and determine the appropriate steps, if any, which are consistent with the Attorney General Regulations.
We know that these Regulations are problematic and may create a lot of questions regarding the collection of unpaid common expenses. Please feel free to contact your MEEB Attorney so we may answer any questions that you may have as we continue navigating through all of the impacts of COVID-19.
For our Rhode Island and New Hampshire Association clients, there is no prohibition in place at this time.