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Perspectives

Condominium Awarded Judgment For Common Charge Arrears Together with Late Fees, Interest and Attorney’s Fees

In Board of Managers of Ruppert Yorkville Towers Condominium v. Hayden, 2019 N.Y. App. LEXIS 1312, 2019 N.Y. Slip Op. 1335 (1st Dep’t Feb. 21, 2019), an appellate court affirmed a condominium’s right to collect unpaid common charges from a unit owner, together with late fees, interest, and attorneys’ fees.

It was undisputed that the unit owner had failed to pay her common charges for many years, so that the Condominium was authorized by the Condominium Act and its By-Laws to bring this action to collect the arrears. The fact that the unit was also the subject of a foreclosure action brought by the mortgage lender did not preclude the Condominium from pursuing its own action.  The Condominium properly established the amount due to it by presenting the testimony of an officer of its managing agent, who testified that she was familiar with and a custodian of the Condominium’s records, such as the tenant ledger; that these records were prepared in the ordinary course of business and were relied upon by the Condominium; and that the entries in the records were made by persons with a business duty to keep accurate records.

The Condominium’s imposition of late penalties and interest was also upheld.  The court observed that the unit owner “agreed to such charges when she purchased the unit, and could have avoided them by paying the invoices sent to her.”  The amount of the late fees was not subject to New York’s usury laws, because late fees are not interest on a loan or forebearance.  The appellate court’s decision does not specify the amount of the late fees, but the trial court’s decision reflects that it was 2% per month.  The court also awarded the Condominium prejudgment interest calculated at New York’s statutory rate of 9% per year.  Finally, although not separately discussed in the appellate decision, the damage award also included $69,500 for the Condominium’s attorney’s fees as authorized by the governing documents.