John owns a condo unit in Philadelphia, PA. This unit is part of a
single building, which houses 3 total units. John owns A, Janet owns
B, and Chris owns C. John and Janet both bought their units from
Chris, who is the builder. Chris was looking to sell C, but found no
buyer and thus rents this unit out.
Chris informed John and Janet that he would 'set up' the condo
association once all units were sold/moved into. Despite John and
Janet having purchased the units in late 2019, and all of the units
being currently occupied, Chris has still not set up the association.
John and Janet have both asked repeatedly about this formation, but it
still has not happened.
Condominiums can only be formed with the consent of all owners of the property made a part of it at the time that the property is divided into units. Generally, this will set forth the rights of the parties (although there are statutory rules governing what the can and must say to be valid).
Frequently, the governing documents will provide that the developer who formed it is a one person home owner's association (HOA) until further actions is taken or all units are sold to third parties. But, one has to see what the documents actually say. Some obligations are self-executing, others simply authorize an HOA once formed to do something.
If the obligations aren't self-executing, and no HOA takes action or is formed and an HOA is required to impose fees, then the HOA can't generally retroactively impose assessments unless the declarations establishing the condominium partition of the building say so.
It might be that some charges are automatic under the governing documents, and other are not.
If/when Chris sets up the association, is he entitled to demand
back-pay to the association? Ie fees that would have been incurred had
the association been set up at the onset?
This depends upon what John and Janet expressly agree to in writing when the condominium is formed with their consent, if it is really formed after they purchase their units.
However, this scenario doesn't make a lot of sense. Normally, it would not be possible, as a commercially practical manner, to sell a condominium to someone without a declaration of record forming the condominium. In that case, the governing documents of record would have to be interpreted to determine what fees, if any, are owed by virtue of those documents even in the absence of a functioning HOA organization, or in a period of initial developer control.
Additionally, what about payments for water? At the moment the water
is on a shared meter and is being paid, presumably, by Chris. John and
Janet have never seen a water bill, nor has there been an explicit
discussion regarding this.
This depends upon the governing documents forming the condominium units that were recorded, if any.
If there are no governing documents, then there is a a horrible mess because it isn't clear what anybody owns. As a result, a court would have to fashion some sort of remedy in equity to determine the rights of the parties, which is highly discretionary and fact specific and could be done many different ways.
