Daily Development for
Monday, February 17, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

CONDOMINIUMS; ASSESSMENTS; LESSEES: A tenant of an owner of a condominium unit who received the benefit of the condominium's common areas is required to pay common area expenses and charges where the non-occupying owner of the unit failed to pay them, filed bankruptcy and permitted tenant to remain in possession without charging rent or assigning rent to his creditors.

Foxwood Square Condominium I v. Albert, 643 N.Y.S.2d 912 (Civ. Ct. 1996).

Here the court determined that the non-occupying tenant must pay the common charges as a third party beneficiary for services rendered to the tenant by the condominium. In New York, there is a section of the general business law which specifically authorizes a remedy to the condominium for the payment of common charges by a non-occupying owner following the owner's default. As the condominium was created before this section of the General Business law was passed, however, the court had to find another basis for granting relief to the condominium.

Note that the statute provides that the non-purchasing occupant of a condominium must pay the total rent to the association when the non-resident owner is in default. The portions of the statute excerpted by the court do not indicate that the association must pay any surplus over common assessments back to the landlord. If the statute does not so provide, it appears to have the elements of a forfeiture.

The common law remedy approved by the court here relates only to the assessments, and not to the rental from the unit.

Comment 1: "Third party beneficiary?!!" As the term "beneficiary" suggests, this concept normally is used to establish a non-contracting party's right to receive the benefits of a contract. Here the concept is being used to impose liability for compliance with the condominium assessment contract. Although there may be some equitable basis upon which the tenant should be made to pay, the concept that there is a basis for such result in the law of third party beneficiaries strikes the editor as a bizarre thought.

Comment 2: If we are still imposing traditional servitudes law, we might be able to find a basis in for liability in the concept that the tenant, as a possessor of the land, is liable for the performance real covenants that bind the land. There is some disagreement as to whether economic covenants ought to be treated as "real covenants," but decades-old New York authority in the subdivision area seems to have crossed that bridge successfully. There is some problem with this concept in that it is unclear that the parties to a condomium declaration really intend that the lessee of a condominium owner have the personal responsibility to pay the assessements. But this is probably a better theory than "third party beneficiary" notions.

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