Tough Times NO DEFENSE For Non-Payament of Dues

Paoli Pointe Condominium Association v. Levin, No. 2009-08871, Pa. Ct. Com. Pl., Nov. 5, 2010

Assessments: A Pennsylvania court awarded a condominium association 100 percent of unpaid assessments, late fees, attorney’s fees and collection costs, finding that “tough times” did not excuse a unit owner from paying assessments.

Dale Levin owned two units in Paoli Pointe Condominium Association (association), a residential development in Paoli, Pa. In 2005, Levin purchased unit 512 and rented it to a third party. The condominium declaration sets forth the personal liability of unit owners for payment of monthly assessments and provides for acceleration in the event of nonpayment. Levin failed to pay the October 2006 assessment for unit 512 on time, which prompted the association to assess a late fee. Levin made the payment on October 27, 2006, but did not include the late fee. Subsequently, he ran an almost constant unpaid balance until he sold the unit to a third party in June 2008.

In 2006, Levin purchased unit 522, which his parents occupied. In January 2007, he began to repeat the same pattern of non-payment. In 2009, the association turned his account over to counsel for collection. As a result, he made payments on the account between March 2009 and July 2009, but he failed to pay accrued late fees and collection costs. From August 2009 to June 2010 he made no payments at all.

The association initially sued Levin in Magisterial District Court to collect the unpaid fees. Levin argued that he had fallen on tough times that impacted his ability to meet his commitments to the association. He contended that the association misapplied a payment to unit 512 that he intended to have applied to unit 522. Levin posited that if the payment had been properly applied, the association’s counsel would not have become involved.

The magisterial judge accepted Levin’s “misapplication defense” and ruled in his favor. Under local rules, the matter was assigned to arbitration. The arbitrators ruled in the association’s favor in an amount that did not include attorney’s fees. The association appealed their decision.

Levin offered no reason for his nonpayment other than he had fallen on “tough times.” He did not dispute his liability. The court failed to recognize “tough times” as a viable defense and declined to accept it. It concluded that Levin made a conscious decision to be continually delinquent. It, therefore, ruled in the association’s favor and against Levin on his counterclaim. It awarded the association 100 percent of the outstanding unpaid assessments, 100 percent of fees and expenses imposed as a result of nonpayment of assessments, counsel fees as the “prevailing party” in the suit and costs.

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