Can co-op/condo boards assess fees to their residents if a commercial tenant vacates?

| Dec 3, 2020 | real estate litigation |

The economy is way down in 2020 as businesses close up for good or shift to working from home. This is terrible news for all, but co-ops and condos who have commercial tenants who pay a large share of the operating expenses face substantial shortfalls of income that had supported their operating budget. Making matters more stressful, some co-op and condo owners may face their own economic struggles during these uncertain times.

Boards can assess additional fees

The governing documents provide that owners are obliged to pay special assements regardless of the timing or the reason. The buildings have expenses to meet and paying those expenses is a shared obligation among all of the owners. Whether the individual owner pays these fees is a separate issue, but the board’s role is to protect the community’s best interest and clearly have the ability to impose these assessments.

A unique situation

Boards may want to think creatively in these unprecedented times before imposing assessments that could pose hardships to their owners. The goal is to keep the building afloat while not putting too great a strain on the residents. The retail space may be empty at the moment, but this is not likely to last forever. Perhaps deferring some repairs or improvements that are not immediately necessary will limit the need for an assessment. Perhaps using monies in the reserve fund now and assessing residents in the future when times are better to replenish the reserve fund is an option. Communicating with the owners about all options that the board considered may help soothe worries, making it easier for them to accept the situation and the Board to collect needed monies.