Condo and subdivision fees: Are Association fees dischargeable?

In short the debtor is responsible for association assessments as long as the debtor is the owner of the property.

In a chapter 13, the debtor who wants to keep his property must add the prepetition assessment fees into his plan if they are delinquent. The assessment is normally secured by the property. State law often creates a lien for the association when the assessment becomes due.

The post petition fees have to be paid when they become due.

Smart debtors (or their attorneys) made the argument that the assessments are based on a contract and are discharged (pre- and post petition assessments) through the bankruptcy. One of their supporting arguments was that the exception of discharge in a chapter 13 (section 1328) does not refer to the section 523(a)16 of the bankruptcy code that excludes assessments from discharge. However, the courts held (most recently In re Foster 435 BR 650) that the assessment is not a contract, it runs with the land and cannot be discharged through the bankruptcy.