• Costa Rica Real Estate

Don’t want to pay your condo fees? Do you want to keep your condo?

June 9, 2016

There’s a myth that it’s impossible to collect fees from delinquent condo owners in Costa Rica, and that if you don’t pay them, nothing will happen.

In fact, Costa Rican law regulates the effective collection of condominium maintenance fees, and the consequences of non-payment can be as severe as being evicted and losing your property.

Under Condominium Property Law, condo unit owners have the unavoidable and shared responsibility of paying for the common expenses of the condominium, including administrative, conservation and operational costs. And the administrators have the legal obligation of collecting the maintenance fees from the unit owners.

So what happens when a unit owner does not pay?

The law stipulates that in the event of non-payment, the delinquent owner’s unit becomes collateral for the debt — meaning it can be taken away and the owner evicted.

The law also specifies that the unpaid fees are to take priority over any other debts associated with the property, so of any money taken in a foreclosure, the delinquent fees have to be paid first.

The law further indicates that unpaid condo fees, as well any penalties or interest, constitute a lien imposed on the property. A lien is a legal claim that one person makes on another person’s property until a debt has been paid. That lien would be recorded in the Public Registry to publicize it to third parties.

A certified public accountant must issue a certification indicating the amount owed. The law states that this certification by a CPA has an enforcement order condition, meaning it’s sufficient to enforce payment and there is no other need to prove a debt exists.

This debt can then be filed in an executive lawsuit, a collections proceeding, in a court of law.

The CPA’s certification is based on the official accounting records of the condominium, making it vital for condo administrators to keep accounting books updated and in due order.

At the same time, the payment obligation is reinforced by the agreement made in the annual meeting in which the budget is approved, as well as the amount of the condominium maintenance fee. These two are prior conditions to perform an effective executive claim.

The law also states that condominium fees must be included in the bylaws as minimum information, or it will be rejected by the Public Registry. The article states:

“Condominium and administration regulations must contain at least the following provisions on the following points: … b) Contributions from the unit owners for common expenses.…”

In addition, the law states that if delinquent condo owners sell their unit, the buyer becomes jointly liable for the unpaid condo fees.

There are lesser steps that can be taken to collect unpaid fees, provided these penalties are stated in the condominium’s bylaws. These can include barring delinquent owners from common areas like the swimming pool or the clubhouse, suspending their voting rights or imposing interest on the unpaid debt.

In most cases, a condominium developer is the initial owner of 100 percent of the subdivided properties and is in charge of drafting its bylaws. But after condos have been sold, the homeowners association (HOA, the highest authority in the condominium) can modify those bylaws by a unanimous vote of all owners (not just those present for the meeting).

The myth persists that unpaid condo fees can’t be collected, in part because of ignorance of the law among both condo unit owners and administrators, but it is just that — a myth.

Warren Corrales is a lawyer and notary public at the BLP law firm. Contact him at (506) 2205-3900 / 8835-5848 or at wcorrales@blplegal.comFor more information, visit www.blplegal.com.

 

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