Denying Access Consequences for Arrears and Non-Payment

Denying Access

The synopsis for the 2013 horror film The Purge is pretty extreme: in the future, society implements a 12-hour period called “the purge,” wherein any and all crime is legalized. Always wanted to vandalize your boss’s car? Thinking about shoplifting a Snickers bar? Now is the time to act on those —and other, far more nasty - antisocial urges. Needless to say, it does not go well and the film (which had a sequel in 2014 and has a third installment coming in 2016) sends the message that no crime can be committed without consequence. 

We all likely think of ourselves as rule-following, law abiding citizens, but sometimes the lines blur a little in the places we are most comfortable—specifically our home. We might not imagine it's that big of a deal to give our significant other the building entrance code, even though the condo board has a rule against giving it to non-residents (after all, you've been dating for six months, and it's a hassle to keep buzzing them in when they come over...). And it certainly can't be that much of a problem if we send in our monthly condo fees a week or so late (you're just one of many owners—and besides, you’ve lived there for years, you’re good for it eventually!).

Actually, bending and breaking the rules of one's condo or HOA is a big deal, and a big problem. From potential property damage to distrust between residents, ignoring the rules of the building—written or otherwise—has real consequences for everybody. There are a number of enforcement tools boards and managers can use to get residents back on the straight and narrow, legitimately and without causing The-Purge-like-anarchy—and privileges and facilities access are a major one.

Of Statutes and States 

Eric M. Goidel, Esq. of the law firm Borah Goldstein, Altschuler Nahins & Goidel PC in New York provides some necessary context to the subject. “The concept of the withdrawal of privileges for defaulting residents has existed for many years,” he says. “Typically, it involved the revocation of parking privileges or the loss of storage area use. Boards have—both legally and illegally—chosen to utilize the withdrawal of amenities as a weapon against violating residents.”

That said, Goidel cautions that any time you start throwing around the words legally and illegally, you inevitably encounter nuances and contrasts between what co-op and condominium communities across the country can and cannot do to put teeth in their rule enforcement practices. In the state of New York for example, “Courts have given the boards of cooperatives a fair degree of latitude in adopting policies which are in the interest of a cooperative corporation,” explains Goidel. “In opposite, condominium boards are generally bound by their bylaws…accordingly, an amenity is typically extraneous to the proprietary lease which gives a board of directors’ broad discretion in withdrawing that amenity.” 

“New York does not currently have any legislation specifically dealing with the revocation of privileges,” Goidel continues. “Contrast this with Florida, where there is a statute specifically indicating what types of amenities may be curtailed—or Illinois, where there is a statute which specifically prohibits the withdrawal of certain amenities and services.”

Suspending Privileges

Several steps can be tried to get the unit owner to pay including in some states, suspending privileges and taking away amenities such as parking. Some states, like Florida, for instance, have provisions codified into law allowing homeowner associations to suspend common area privileges. Illinois law, however, differs in some respects, says Attorney David Hartwell, a partner at the Chicago-based law firm of Penland & Hartwell.

“The question arises often of whether or not an association can limit an owner’s rights if that person fails to timely pay assessments,” says Hartwell. “In Illinois, the simple answer is no. If a person maintains ownership in a unit—that is the only qualifier for possessing all rights of an owner as conferred by the association’s declaration and the Illinois Condominium Property Act (“Act”). Moreover, the Act prohibits associations from enacting rules or policies, which create two different classifications of ownership. In this case, disallowing an owner from using certain amenities based on timely payment of assessments would improperly create two different classifications and therefore would not be consistent with the intent of the Act.”

In Illinois, Section 18.4(I) of the Illinois Condominium Property Act allows a board of directors to levy a reasonable fine for violation of the declaration, bylaws or rules and regulations of the association. “They key word being 'reasonable,'” says Matthew J. Goldberg of Bancroft Richman & Goldberg LLC in Chicago. “Section 18.4(l) only mentions the levy of fines, and does not provide for associations to take other actions against an owner, such as terminating use rights for a workout room or party room, etc.  That said, some associations do look to utilize such methods. It is not advisable to do so though, as the board may not have such a power - so such an action may subject the board to a breach of fiduciary duty claim.” 

Section 18.1 (I) does authorize boards to charge late fees for nonpayment of common expense or expenses lawfully agreed upon. Goldberg adds, “In Illinois, a board has the right to record a lien for the nonpayment of assessments and foreclose upon the lien. More likely however, the board would utilize its rights under the Illinois Forcible Entry and Detainer Act to evict the owner from the property, at which time the rights incidental to possession—such as use of the workout room or party room—would be terminated by operation of law. The board could even lease the unit out to a tenant and collect the rent to bring the account current.” 

Is it Worth It? 

Obviously, nonpayment of fees or assessments causes a ripple effect of financial trouble for an entire community, and needs to be addressed immediately, by whatever tools the board has at its disposal. But there are other situations in which a board needs to decide what separates issues that are annoying from issues that require action. 

For example, if a board doesn’t have documentation stating that residents aren’t allowed to store personal items under common staircases, they likely can’t do anything outside of sending letters requesting that the items be removed. Goidel advises, “The revocation of privileges should only be used in situations where there are objective, as opposed to subjective violations of policy. Examples of objective violations include the nonpayment of charges, unapproved alterations or the illegal renting or subleasing of an apartment (such as through homesharing networks Airbnb). In those situations, there can generally be no question whether a resident has violated established policy. Examples of subjective violations would include complaints of noise from other residents, and failing to properly dispose of refuse or cleaning up after a pet.”

If residents aren’t advised of specific language in their governing documents that prohibits a defaulting unit owner access to a common element, it is illegal to deny that unit owner physical access to a common element. But, there are however, penalty work-arounds. As Goidel explains, “A person may be able to enter a media room, but not be entitled to receive the remote control for the big screen TV. They can enter a billiard room, but not [check out] a pool cue. Where a building is staffed by a doorman or a concierge, you can refuse to accept deliveries of packages, or dry cleaning and takeout food. You can refuse to announce guests and force residents to come to the lobby to receive their guests. In addition to the loss of amenities, bylaws can provide that defaulting residents are not able to participate at annual or special meetings and/or that they are not able to serve on the governing board.”

Goidel goes on to stress that a board can never take away essential services such as heat, water and light - and while in a co-op a parking space is often occupied pursuant to a revocable license, parking spaces and storage units in condos are often a deeded property—or in some cases is an appurtenance to the ownership of a unit—and therefore can't be revoked or made inaccessible to their owners. 

Establishing and Enforcing 

Paperwork, contracts and agreements provide protection for both residents and boards if and when payments are late or rules are broken. Goldberg explains, “Most governing documents typically contain a section with some varying title on use and occupancy standards. That would be the first place to look.”

Goidel agrees, “There should be an established and published policy setting forth in detail the situations under which amenities and other privileges may be suspended. There should be a period of time when payments are delinquent before privileges are withdrawn, or in the case of objective nonmonetary violations, the withdrawal of privileges should not occur until any cure period provided for in the governing documents has expired. There should also be a warning letter sent to the resident before privileges are suspended. This would be designed to address a situation where there may have been an unknowing violation (i.e. automatic debits of monthly payments have not been occurring).”

“The board is empowered to adopt rules governing the day-to-day activities and expectations of the building owners, occupants and guests, explains Goldberg.” In order to avoid confusion, the rules should spell out the standards expected - as well as the violation process.  All violation matters do require some level of due process prior to taking a punitive action; notice to the owner, an opportunity to be heard by the board, to review the allegations and facts against them, and to present their own defense.  No penalization should accrue prior to providing notice and an opportunity to be heard.” 

So, say you’ve recognized an infraction, you’ve identified the culprit, and you’ve got the paperwork to back up the penalty, but now the issue is how to enforce it. The withdrawal of certain privileges - such as the use of a media room or a fitness center - becomes difficult to enforce unless the facility is staffed, or there exists some sort of key fob or card access system. After all, if there's no way to control access, it's pretty tough to revoke it. 

Regardless, keeping things consistent, transparent, and fair is crucial. “There is no sense in having any type of altercation with a resident, as there are other legal remedies to address a wrong,” explains Goidel. “There should be an established and published policy setting forth in detail the situations under which amenities and other privileges may be suspended. When payments are delinquent, there should be a grace period before privileges are withdrawn. In the case of objective nonmonetary violations...privileges should not be withdrawn until any cure period provided for in the governing documents has expired. There should also be a warning letter sent to the resident before privileges are suspended. This would be designed to address a situation where there may have been an unknowing violation (i.e. if automatic debits of monthly payments have not been occurring).”

And, should the situation become more volatile or the resident not respond to the communication, Goldberg says, “I typically counsel my clients to seek a court ordered eviction rather than engage in self-help.”

Hopefully, the law-abiding citizens of your building will straighten up and fly right long before the board has to entertain the idea of eviction. The evolution from a resident leaving trash bags in the hallway every so often to being served with a second or third warning from the board is likely a slow one, but if the wrongdoings escalate or become more extreme, a board should explore what they have in writing and then consider if a screening of The Purge in the recreation room will send a subtle message to tenants that crime really doesn’t pay.

Rebecca Fons is a freelance writer and frequent contributor to The Chicagoland Cooperator. 

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