Unpaid Common Charges
Thank you Marykc, I got it and replied to that email (it went to brownstoner.com) You can send me directly to bva2@hotmail.com Thanks! VB
vb1955
in General Discussion 11 years and 3 months ago
12
Please log in, in order to post replies!
12 replies
marykc | 11 years and 11 months ago
Our by-laws allow us to charge the highest legal interest on unpaid common charges, in accordance with NY Condominium law. Does anyone know what that interest rate is and how to compute it on years of unpaid common charges and assessments? We are at the end of a very long lien foreclosure process.
mruby36 | 11 years and 11 months ago
I was on my coop board for 10 years for a 140 unit complex in Westchester. My experience there tells m that if you dont have this spelled out in your bylaws, you are going to have a tough time legally charging interest, or any other fee. Most common for this type of charge is a fixed amount over a market benchmark, e.g. 10 year treasury plus 2 points. If you are foreclosing than that means at one time you accepted this person into your condo association. In doing so you would have had to have given them bylaws, condo association rules or some kind of document for them to sign at closing so that they know the rules and consequences at the outset of your legal relationship with them. You should / would then have their signature acknowledging these rules and process for changes as the basis for taking action against them. These same rules or policies would include procedures for making additions or changes to the rules and a board / owner association voting and notification process. Last, but actually, this should be first, where is your condo lawyer in all this? This should be a basic question for them. Best of luck! Hope this helps! Matt R www.nyc-hs.com
marykc | 11 years and 11 months ago
Hi, thanks for the input. I know condos and coops are totally different w regard to unpaid common charges, among other things (our building is a condo, not a coop). Good point on our lawyer having the answers–he tells us to charge a flat 16% on the total amount due, but it’s confusing because he refers to this 16% as “interest,” but in his formulation it is more like a flat fee or flat penalty–not based on an ongoing, and constantly accumulating balance due to these owner’s account. I’d like to know what the explicit, detailed, laws, regulations or guidelines are that our court-appointed referee will be using to compute the total amount due, and they MUST be written down somewhere but we’ve only been able to find vague references to things like “maximum legally allowable interest rate” (that phrase is in our bylaws, and it’s referenced in news articles or legal websites, but we can’t figure out exactly how it works). Our situation is somewhat unique–8 units, self-managed until recently, treasurer/defaulting owner was keeping all the books (I know, I know) so we just recently discovered unpaid cc going back 7 years. And interest, as specified in our by-laws, is quite a different thing than a penalty fee, it implies that it continues to accumulate, right? Our lawyer passes our past due documentation to a court appointed referee who looks at it, maybe does their own computation (?), and issues a final report specifying the amount due. It’s our feeling that we (our lawyer, actually, but we’re doing a lot of this calculation ourselves right now) should present to the referee the maximal amount that we can justify, but we’re very confused about how to figure that out. Thanks again–MK
mruby36 | 11 years and 11 months ago
Goggled it MK, Falls under “Usury Laws”, for NY state, 16% per year is the rate. The Usury law statute will be what the ref will have to use as the guideline. Google “usury laws new york” – and you’ll see the links I just took a quick look at. As for calculating it, my read is that 16% per year is a “simple interest” calculation, which is different than “compound interest”. e.g. you owe me 1,000 bucks for 1 year and we agreed on 16%. That means you pay me back 1,000 plus 160 bucks (16% of 1,000) For a portion of a year take: 160 bucks divided by 365 (days in a year) gives you a dollar amount per day. Then multiply by the number of days into the year whenever you are gonna get the guy to pay up. Have you put a lean on the place? Not sure what the collection rules are but I’d ask the lawyer about staking your claim in the form of a lean if thats the right way to go about it. From the condo board perspective, it may not be needed because collecting with interest is already baked into the condo agreement the guy would have signed and “theoretically you have on file”… right? Hope that makes sense. If not, feel free to contact me, my contact info is on my website linked in the above post.
marykc | 11 years and 11 months ago
Okay–that is very helpful. Yes, we have filed a lien and are in the process of foreclosing on the lien now–we expect a foreclosure auction by the end of the summer.The attorneys have been excellent with all of that. I actually think the question came up (about what interest to document–for some reason we are required to put this forth, whereas I thought the referee “computed” the interest”) as a surprise to the attny, because most condo or coop associations would have an in-house accountant and even lawyer. I think this might get straightened out this week. I will check out the website you mention. But the 16% is per year, correct–so the difficulty comes from the fact that each month there is a new amount owed. for the first month of the first year, for e.g., that was 6 years and 7 months, the next was 6 years and 6 months, etc. So we get the difference between simple and compound interest, but simple interest implies that an agreement was reached that included a specific amount of money and a specific repayment time period. This is completely different–it’s not like the condo association agreed to anything, let alone agreed to allow this owner to default on payments for 6+ years. By the time the association determined what had been happening, it was quite clear that there was no point in trying to negotiate a payment plan with her, and we immediately filed the lien and moved to foreclose. So anyway, if we’re entitled to interest we’d like to collect it! But this seems more like a debt/arrears situation more comparable to what would happen when you don’t pay your credit card bill, vs entering into a loan agreement where simple interest might make sense. Thanks again for those links–we will look into that. Much appreciated! MK
mruby36 | 11 years and 11 months ago
ok, one last thought… When the person bought the place, assuming there was a condo policy agreement in place and was signed, the condo assoc does not have to make any further agreements. The original one should stand. Again, assuming you can find it, there should be terms and rate of interest, or, default to NY state usury law. The calculation would basically be arrived at by “reconstructing” what would have taken place had someone been minding the store all along. You’d have to make a spreadsheet and go back to the first month of default. The fees are due monthly. Say fees are 100 bucks a month. Therefore, month 1 of no pay, they owe 100 bucks. same for month 2 and so on. If over the years the condo fees have changed, gone up, you would change the monthly owed to the new amount at those month points in your spreadsheet. The interest accrues as you go along. month 1, they owe 100\. month 2, 3 etc same deal. at month 2, the month 1 fees are now 30 days old and start to accrue interest. (you’d have a separate column for this in your spreadsheet. at month 3, month 1 is 60 days old and has been accruing interest for 30 days. Month 2 is now 30 days old and starts accruing interest. confused? sorry 🙁 Month ……..current fee …..prior bal ……interest charges current ..Int charge bal 1 ………….100 2 …………100 ……….. 100 …………..$1.31 ……………… 1.31 3 …………100 …………200 …………..$1.31 + 2.63 = ……….3.94 etc. you’d want to check my method with someone but what I’m doing is Month 2 100 x 16% / 365 days x 30 days = 1.31 Month 3 100 x 16% / 365 days x 30 days = 1.31 .. PLUS 100 x 16% / 365 days x 60 days = 2.63 the first 100 bucks is now 60 days old ======== 3.94 running bal Again, this is the idea, I think. You definitely gotta check the rate and this method of calc, probably with an accountant, a forensic accountant would know best Also helps if you know how to construct a spreadsheet (art in itself) I wouldnt give up on getting the fees. Whoever is head of the board has a fiduciary responsibility to at least try because not getting the fees essentially comes out of everyone elses pocket. So if you are the guy / gal in charge and dont make a concerted effort, then someone else could come after you for not doing so, right? Also, if there is equity in the condo after prior obligations to yours are met, you’ll know how much to collect. If you have this calc’d before going to the ref, the ref and judge will see you did your homework, or at least made a good effort and that should work in your favor as well. Gotta go. Take care and best of luck Matt R
marykc | 11 years and 11 months ago
Wow–this is exactly what I did–I used 1/12th of 16% rather than by days. I love spreadsheets. yeah, a forensic accountant would have been nice, but, no money! But we have spreadsheets of al bank statements balanced by deposits w check images. Did I mention this owner/treasurer also stole $$, didn’t pay bills, etc. Anyway-I believe the language in the by-laws does exactly what you say–defaults to New York Usary law, but it is not stated as such and our attorney has not referred me to that law as of yet (have to acknowledge, this all came down the day before the holiday). Yes, good equity in the condo according to best estimates and common sense, or else this would not be so important/useful. Thanks, MK
nygrower | 11 years and 7 months ago
Mark- Did you ever get a _legal_ answer as to whether the interest should be compounded or straight?
marykc | 11 years and 7 months ago
Yes.Our attorney accepted the spreadsheet showing 1/12th of 16% due on each month’s total balance due. Simple interest on each month’s balance, not including any interest charges. Interest was tallied separately. This amount was subsequently approved by the Court-appointed Referee. We are at last step in court–waiting for a judgement on Order to Foreclose (sale), and for the judge to okay to amount due as approved by Referee. After seeing how the justice system works in Brooklyn, though, I expect anything could happen. Does this answer yor question? Thanks for your help! Mary K
pmhcuuxmobsohz | 11 years and 6 months ago
You can utilize that you go with weddings, celebrations, elegant cuisine or perhaps occasions, ?????? ?? http://www.cerramayoristaonline.com/ = [?????? ??](http://www.cerramayoristaonline.com/) ?????? ??? ???,one more to get do the job or even a various bag when venturing or maybe deciding on family vacation or a ,1 make use of out there ???? ??? ??? http://www.i-wed.org/ = [???? ?? ???](http://www.i-wed.org/) ???? ??????,to get moving or maybe a date. ?????? ?????? http://www.cerramayoristaonline.com/ = [?????? ??](http://www.cerramayoristaonline.com/??????-??-c-18/) ?????? ??????,You may choose totes with respect to the ???? ?? ??? http://www.i-wed.org/ = [?????? ???????](http://www.cerramayoristaonline.com/??????-???????-c-8/) ???? ??? ???,occasion as well as climate.
vb1955 | 11 years and 3 months ago
Hi MK, I live in a 10 units condo, and we’ve got a ‘bad apple’. We have won 2 small claim court cases, but the guy ignores judgments using imperfectness of legal system. Actually, the only way to get him is foreclosure, but as per attorneys we consulted with – it is lengthy and costly process. You are the first one I found in the net who said “we are close to the end of the process”. Could you please share your experiences, and would our recommend your lawyer who managed this process? How costly was that? Can I contact you directly to discuss? Thanks much in advance. VB.
marykc | 11 years and 3 months ago
VB-did you get a response from me via email? I would be happy to discuss our experience with you, but I am not sure how to get you my contact info.