These days, many of us live in community Associations, whether it be some type of Cooperative or a Homeowners’ or Condominium Association (for remainder of this article, I will refer to them all as “Associations”). Of course, along with these types of ownerships, comes the regular responsibility to pay Association dues (whether you knew they existed, at the time you purchased the property, or not). These dues vary from property to property, with respect to the amount and what they cover. Generally, however, the dues collected are used to cover costs associated with the properties’ insurance coverage, water or other utility consumption, trash collection, grounds upkeep, repairs and/or other things, depending upon where you live. You may or may not regularly review Association documents as received, but annually the Association develops and distributes an annual budget. Of course, the successful administration of the Association depends heavily upon the regular collection of these Association dues. Thus, when the dues are not regularly paid, the Association struggles, financially, to pay its’ necessary expenses and maintain the community as a whole. In addition and what’s become an increasing concern, is that the Associations’ property sales suffer as lenders deny loans, to would-be purchasers, based upon the level of Association delinquencies. All of these issues are leading to the decline of many community properties.
Currently, the Association is able to engage in a variety of legal actions, including, but not limited to initial collection efforts, which could include late fees and interest charges (some bylaws allow up to 18%); the attachment of a “statutory” lien upon the property, which could prevent the sale and/or purchase of the property and/or allow the Association to proceed with foreclosure upon the property; the institution of a personal suit, upon all owners, identified on the deed to the property (whether they actually live in the property or not), which could lead to judgments, judgment liens, credit reporting, wage garnishments, car and other property or real property attachments and other collection efforts (again, against all owners) and of course, those regularly hated collection costs and attorneys fees.
Recently and due to the widespread effects of the non-payment, of these dues, including Association property upkeep, declining community home values and resale efforts, Prince George’s County has added a pretty powerful “incentive” for some delinquent owners to pay up. Who are these particular delinquent owners? Owners with rental housing licenses. Thus, if you are an owner, of one of these types of properties, and require a rental housing license, take note:
Effective January 22, 2013, and with respect to rental housing requirements for a single family and multi-family rental facilities, in common ownership communities or Condominium or Homeowner’s Associations, in order to obtain a rental license, the applicant must provide, on official Association letterhead, the name of the Association, along with clear certification/evidence, from the entity that the dwelling unit does not have a lien for the non-payment of such dues/fees, in addition to showing that the dwelling unit is not in violation of any of the covenants or bylaws. Further, it must be shown, by Association certification/evidence, with the application submitted, that not only, is there no currently filed statutory lien, but that all fees, that may have come due since the filing and recording of that lien, have also been paid as required. Otherwise, no granting of an initial license or license renewal!
You should also be aware that if the Association provides documentation, during the licensing period, that the above listed requirements are not met, then the rental license is subject to suspension, revocation or denial. This means that the license is at risk at renewal time and at anytime during the existing licensing period, so it may be a good idea, if you are delinquent, and you need this license, that you start working on catching up those payments, before the delinquent payments catch up to you! In fact, it would be great for the community as a whole, if you would pay any delinquencies whether you need a license or not. Trust me, it’s easy, just start sending in some additional payments here and there, in any amount. If you are in the midst of some type of collection action, with respect to the delinquency, call the attorney and enter into an agreement. This will also, most likely, stop any pending collection efforts as well. I know that that is the practice at The Kelsey Law Firm and most other law firms.
Are there similar rules in other counties, cities or states? If you require a rental housing license, I would check it out!
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