Condo Media - August 2022 - 45

suant to § 34-36.1-3.02(a)(10) - (12)
are enforceable as assessments under
this section. If an assessment is payable
in installments, the full amount of the assessment
is a lien from the time the first
installment thereof becomes due. "
In accordance with Section 3.16(b)
of the Act, this lien also has a limited
priority over a first mortgage for six
months of assessments (plus a limited
amount of attorney's fees and costs).
Enforcement of the association's lien
shall begin once " any portion of the
unit owner's share of the common
expenses has been delinquent for at
least sixty (60) days. " The steps for enforcement
of the lien, which includes
non-judicial foreclosure, are found in
Sections 3.16 and 3.21 of the Act.
ECONOMIC IMPACT
DO'S AND DON'TS
As of the time of this writing, the economy
continues to approach hard times
as the cost of living is rapidly rising.
History has proven that in these times,
unit owners tend to fall behind on
their payment of assessments. While
some people will be affected by the
changing economy more than others,
delinquencies are almost certain to
start to include some new faces.
Assessments are mandatory.
Associations cannot waive assessments
and must not selectively
enforce policies to collect them.
Equal opportunity must be given for
payment plans, and the association
must be mindful of the association's
limited priority lien of six months of
assessments ahead of a first mortgage.
Additionally, policies regarding
late fees and interest must be adhered
to uniformly, consistently, and in
accordance with the Declaration.
Finally, owners cannot avoid condo
fees by moving out, not using the
amenities, or even by dying. Without
collection of assessments, the association
will starve. The statute is very
strong in the enforcement rights given
to the association, even providing
in Section 3.15 for collection of rent
from a delinquent owner's tenant to
satisfy an outstanding delinquency.
Association boards must take steps to
settle delinquencies within a reasonable
time frame, and without prejudicing the
priority of the association's six-month
lien ahead of any first mortgage.
During economic hard times, associations
should try to limit having to make
special assessments on the owners and
limit assessments to those projects that
are necessary - or find ways to spread
out the payments. Association loans are
a good option, but must be taken before
delinquencies get too high, as a high
delinquency rate will make the association
ineligible for financing. Unit owners
should be given as much notice as possible
of increasing financial liabilities.
Owners should also be required to
have HO6 insurance policies (which, in
most cases requires a document amendment
to enforce) to avoid unit owners
having to self-insure losses that are
not covered by the association's master
insurance policy. Owners should also be
encouraged to get coverage for special assessments,
if such coverage is available.
While no one can control the economy
and the cost of living in the world
around us, associations can take these
steps to control the cost of living within
their communities. For the past two
years during the pandemic, associations
and their boards have been faced with
having to collect assessments against
unit owners who have fallen behind due
to illness or unemployment.
Unfortunately, even in hard economic
times, the statutory obligation to assess
and collect cannot be avoided, and are
as certain as death and taxes.
n MARY-JOY HOWES, ESQ. IS A
PARTNER IN LOMBARDI LAW GROUP
AND CO-CHAIR OF THE CAI RHODE
ISLAND LEGISLATIVE ACTION
COMMITTEE (RILAC).
Providing innovative banking solutions
for community associations.
One of Forbes' " America's Best Banks " Year After Year
No-Fee Lockbox Services1
ConnectLiveTM
Software Integration
Full Online Banking Services2
Online Homeowner Payment Portal
Lending Solutions3
Extensive Deposit Solutions4
Jamie Kay Redden, CMCA, AMS, EBP
Vice President
(724) 910-6304
jredden@allianceassociationbank.com
Stacy Dyer, CMCA, AMS
Senior Managing Director, East Region
(843) 637-7181
sdyer@allianceassociationbank.com
| allianceassociationbank.com
1Funds deposited through the Lockbox will follow Western Alliance Bank's funds availability policy as outlined in the
Deposit Account Agreement Disclosure. 2Fees may be imposed for additional services related to online banking.
Refer to Business Online Banking Setup and Authorization for more information. 3All offers of credit are subject to
credit approval, satisfactory legal documentation and regulatory compliance. 4Refer to the disclosures provided
at account opening and the Schedule of Fees and Charges for additional information. Alliance Association Bank, a
division of Western Alliance Bank, Member FDIC. Western Alliance Bank ranks high on Forbes' " America's Best Banks "
list year after year.
August 2022 CONDOMEDIA 45

Condo Media - August 2022

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