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# 149-G, Esprit, A Condominium and Klingaman v. Waters Landing Association, Inc. (August 3, 1993) (Panel: Axelson, Blumberg, Fox)

A condominium owner (CO) filed a complaint on her own behalf, and on behalf of her condominium association (of which she was the president), against the master association (MA) to which they both belonged.  She complained that the MA was improperly assessing each condominium unit owner a monthly fee of $2.90 as its expenses in collecting the regular assessments from those owners.

The condominium association withdrew as a party before the public hearing was held.

The evidence at the hearing showed that that the MA imposed a fee of $2.90 per month on all members of the Esprit Condominium to reimburse itself for its costs in collecting the monthly assessments directly from those owners.  The MA did not charge such a fee to unit owners in other associations belonging to the MA.  The Declaration of the MA stated that the general assessments included "the cost of necessary management and administration"; and the MA's Bylaws stated that its annual budget shall reflect the cost of operating and maintaining the neighborhood facilities, and that the assessments would be based on that budget.  The Condominium Association's Bylaws stated that each owner must pay monthly assessments equal to 1/12th of the owner's share of the association's annual expenses.

The hearing panel held that under the various provisions in the Declaration and the Bylaws, the MA could only bill the Condominium Association's members for the costs of maintaining the neighborhood facilities, and not for the MA's costs in carrying out its administrative duties.  The hearing panel noted that the governing documents required the MA to collect assessments, not the condominium association; and that therefore the condominium owners "are entitled to pay their assessments directly to the party collecting those assessments without incurring additional costs for doing so."  The MA can only add additional charges for maintaining facilities, and that the costs of collecting assessments are a common expense that must be part of the general assessment to be paid by all the unit owners who make up the MA.  The panel further held that if the MA delegated its assessment collection duties to any subsidiary member, it must grant that member a credit or pay a fee for its services.