Can Co-owners Withhold Assessments?
A condominium director asked me the other day if I thought one of their co-owners had a legal argument in withholding his association dues. The co-owner is refusing to pay his monthly assessment because he claims that the board of directors did not have enough members when the budget was established, and, therefore, he is arguing that all assessments and fees are null and void.
There was a similar case out of Connecticut wherein the court ruled that even though the association’s bylaws required four (4) board members, the fact that only three (3) people were seated on the board at the time the budget was adopted was irrelevant to the budget’s validity. The court said that it is common for boards to have temporary vacancies, and that as long as a quorum was present at the meeting at which time the budget was adopted, the budget is valid.
In Michigan, the Condominium Act clearly states that co-owners may not withhold their association assessments even though the condominium association and/or its management company may not be providing adequate services in the eyes of the co-owners.
Ultimately, it appears to me that the co-owner’s argument of withholding assessments is specious, but associations are best advised to consult with a knowledgeable community association attorney if confronted with such an issue.