What is the law relating to the payment of Resident’s Association fees and what is its purpose?

Resident Association fees are all the amounts paid by the tenants who make use of the common property. Not many people know that these payments are protected by a law, which is regulated through the provisions of the Real Estate Law. If you are unfamiliar with the details, we have broken them down below.

Why are we charged to be part of the Resident’s Association?

In every residential building, there are areas that are regarded as communal, such as the lobby, stairwell or rooftop. There is a service charge to cover the maintenance of these areas as well as to ensure the lighting is always working, any repairs that are needed are dealt with in a timely manner and in new buildings it may include facilities such as a swimming pool or a gym. In order to avoid cases where the financial burden falls on the shoulders of only some of the tenants, while the rest enjoy the maintenance of the common property free of charge, payments to the Resident’s Association are made by all the tenants in the building.

These funds are intended for the day-to-day operating expenses of the common facilities, including cleaning the entrance and elevators, electrical expenses in common areas and ongoing maintenance and repairs. In addition, there may also be exceptional expenses such as renovating mailboxes or painting the walls of the building.

And what does the law say?

This law is part of the Real Estate Law which legally regulates issues related to individual and group property. The various sections of the law concern the tenants’ obligation to participate in the joint expenses and address how the amount to be paid is determined: by an agreement within the specific Resident’s Association or as pre-agreed terms.

The main provision in this matter is section 58(a) of the Real Estate Law, which concerns joint expenses, for example, the participation of the apartment owners or tenants in the expenses required for the management and maintenance of the common space. Usually, the participation rate is divided equally between the tenants. In other cases, the fee is relative according to the size of ​​the apartment in which each tenant lives.

How is the amount paid to the Resident’s Association determined and who must pay?

The amount of the payment to the Resident’s association can be determined through a pre-agreed contract, which is also regulated in the Real Estate Law. The payment can be made monthly or annually to the building fund. The required amount can also be determined at a tenants’ meeting, provided that everyone is in agreement.

The Resident’s Association sections in the Real Estate Law also address the issue of agreeing on the payment rate and protects tenants from imposing payments at higher than agreed. In addition, the law also regulates the payments that can be included in the framework of the “ Resident’s Association” and these only concern the expenses required for the operation and maintenance of the common property in the residential building.

Even if one of the tenants thinks that the amount required to pay the Resident’s Association is unreasonably high, he cannot refuse to pay the fee. A tenant’s refusal to pay as pre-agreed, constitutes a violation of the law and puts him at risk of prosecution for unpaid fees and compensation to the Resident’s Association.

Have you had to deal with a similar situation? We at Bllink specialize in handling tenants who refuse to pay the Resident’s Association fee. As part of our services, we provide professional guidance in these situations and invite you to contact us for personalized assistance.