Thursday, October 26, 2006

Is There a Time Limit on Collecting Late Fees?

By THE NEW YORK TIMES
October 26, 2006
Q & A

Q I serve on my co-op's board of directors. We have a apartment owner who is consistently late with her maintenance fees. Although she eventually pays her base charges, the late fees have accumulated to more than $1,000. Should the board be concerned about a statute of limitations?

A "Collecting late charges from co-op shareholders is a common problem, as the amounts are generally small and collection proceedings are expensive," said Elliott Meisel, a Manhattan co-op and condo lawyer. He noted that the oldest late fees may be deemed part of a "continuing performance obligation," and in that case, the six-year statute of limitations begins to run after the last charge was imposed.

"The safest course for the co-op is to apply all payments made by the shareholder against the oldest outstanding amounts due," he said, "allocating any remaining arrearages against the current maintenance charges, and making it clear, in writing, that any unpaid balance consists of all or a portion of the most recent charges."

Address questions to Real Estate Q&A, The New York Times, 229 West 43rd Street, New York, N.Y. 10036, or by e-mail to: realestateqa@nytimes.com. Answers can be given only through the column.

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