The Massachusetts Section 6(d) Certificate
If you own a condominium in Massachusetts or are thinking of buying a condominium in Massachusetts you want to be aware of something called a Section 6(d) Certificate. A 6(d) certificate is a report card, for lack of a better visual, on the condominium owner’s payment of condominium fees or lack of payment of these fees. The 6(d) certificate is signed by the trustees of the condominium and is their statement that there are no outstanding condo fees or that there are outstanding condo fees. Without this statement, where the condominium owner owes the condo association unpaid fees, a new owner could be responsible for payment of these unpaid fees after the ownership of the condominium has been transferred.
How do I get a Section 6(d) Certificate?
Your attorney or real estate agent, if you are the seller of the condominium, will reach typically be the individual who contacts the condominium association for the purpose of obtaining a 6(d) certificate. The person responsible for completing 6(d) certificate requests at the condominium association will obtain the necessary signatures along with noting any condo fees owed (if there are any) and will send this important document along to the seller’s attorney. Your attorney will give the condo owner enough notice to complete the 6(d) certificate, about 2 – 4 weeks on average.
What Happens if I can’t get a 6(d) Certificate?
Without a 6(d) certificate, most lenders will not allow a buyer to purchase the property. The lender holds back funds when a 6(d) certificate is not present because this Massachusetts law was established to ensure that condominium owners pay their condo dues timely and in full. The Massachusetts law, M.G.L. Chapter 183A, section 6(d), allows condominium associations to place a lien on the property with the intent to force the condominium owner to pay any back owed condo fees or dues and penalties. However, if a person comes along wishing to buy the condominium from the original owner, and the sale is made, the new owner would be liable for the amount unpaid condominium fees of the old owner. This is a bad situation which is easily avoided by having the condominium owner produce a 6(d) certificate proving that no fees are owed to the condominium association.
What if the 6(d) Certificate Shows Condo Fees Due?
If the previous owner of a condominium in Massachusetts owes back condo fees or dues on their condominium it is unlikely that a new lender will loan a new prospective buyer any money to complete the purchase. As previously mentioned, a bank or lender is unlikely to get involved in a mortgage on a condominium where back fees are due. In a case where condo fees are still owed under the previous owner, the matter will need to be resolved before proceeding further with a purchase, unless the buyer of the condominium is in a position to pay for the condo fees of the original owner (which would be a rare, but possible outcome).
What is the Big Issue with Condo Fees?
Condominium fees in Massachusetts, or anywhere else for that matter, are the foundation of the condo association. These fees are used to maintain the property and pay the management staff, insurance on the property, and other common area expenses. Because condo fees are integral to the operation of a condominium association, Massachusetts developed M.G.L. Chapter 183A, section 6(d) as a method for condo association trustees to recover money owed to them. Because a condominium association in Massachusetts can place a lien on a condo owner’s property where the condo owner has failed to make regular and complete condo fee payments, making such payments is high priority for condominium owners. Additionally, a condominium association can foreclose on an owner’s property due to failure to pay condo fee as a means of recovering monies owed the association.
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