Danny Ramrattan, Associate, Adam Leitman Bailey
The burden of proof. If your board decides to foreclose on a condo owner who has failed to pay common charges, you have to prove it when going to court. To do that, you need business records. There was a time when an affidavit based upon business records was sufficient to establish a default. However, now there is case law that says an affidavit without business records is inadmissible hearsay.
Changing of the guard. The biggest problem in these scenarios is the changing of managing agents. The board should verify that the new management company has acquired all the records, because often the nonpayment of common charges has gone on for a long time. This is critical because otherwise you would be unable to prove your default. Then, after you prove the default, you need to show the amount due on the common charges.
Bottom line. If you fail to keep track of these records when you bring a foreclosure litigation, the court might order a hearing, and there might be more back and forth and more motions on proving the amount that’s owed. So you want to streamline that process. Another thing is that the court might reduce attorney’s fees the condo corporation is due if litigation drags on. And allowing a unit-owner not to pay common charges is pretty unfair to the other unit-owners who have to carry those costs.