Richard White: Remaining members are assessed for bad debt : Columns : Naples Daily News
Q. When a unit is in foreclosure with no reasonable expectation of collecting monthly assessments or a special assessment, how is that unit’s shortage or a special assessment equitably charged to the remaining unit owners? For simplicity, suppose 10 units each pay 10 percent. One unit goes into foreclosure, and there is a special assessment that will be picked up by the paying nine owners. However, the nine members undivided common interest only totals 90 percent. Even though they must pay to keep the association running, they can argue that the documents state they must only pay 10 percent of the costs, not 11.11111 percent. — D.C., Naples
A. In uncomplicated words, you assess the remaining members their share of the special assessment and then you take the bad debt and assess the members for the shortage. You must assess the foreclosed unit along with the other units. Then you treat the unpaid as a bad debt. The financial records must show that the foreclosed unit has a delinquent amount that included the special assessment.