Overdue condominium fees: collection, penalties and the owner’s rights

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Few debts are as misunderstood as condominium fees. On one side, owners shocked to learn the property can be seized even as the family’s only home. On the other, building managers charging penalties above the legal cap or barring debtors from the lift — two practices courts routinely strike down.

This article sets out both sides: what the condominium may do to collect, and which rights the owner keeps while in arrears.

Why condominium debt “sticks” to the property

The condominium fee is an obligation propter rem — plainly, it follows the thing. It does not matter who owned the unit when the debt arose; it is tied to the unit. So whoever buys a flat with overdue fees assumes the debt, even without having caused it.

Hence a practical tip worth its weight in gold when buying: request the condominium clearance statement, signed by the manager or administrator, before closing. It is a simple document that avoids a loss which can reach tens of thousands of reais.

How much the condominium may charge in penalty and interest

Article 1,336, §1 of the Civil Code is clear: the late-payment penalty is at most 2% of the debt. Older by-laws providing for 10% or 20% do not prevail on this point — the statutory cap applies.

Beyond the penalty, default interest applies (as set in the by-laws; if silent, 1% per month) plus indexation. The correct reading is this: collection may be firm, but it is capped. When the statement exceeds that limit, the amount charged is questionable — and reviewing it usually reduces the debt.

Penalties for antisocial behaviour: a different matter

Do not confuse the late-payment penalty (2%) with penalties for breach of duties — noise, misuse of common areas, irregular works. Those follow a different rule: up to five times the fee (art. 1,336, §2) and, for a repeatedly antisocial owner, up to ten times (art. 1,337). They require, however, a basis in the by-laws and a regular resolution in a meeting, with a right of defence.

The property can be seized — even as a family home

This is what surprises people most. Law 8.009/1990 protects the family home from seizure, but it contains exceptions. Article 3, IV allows seizure for taxes, rates and contributions owed in respect of the property — which includes condominium fees.

The rationale is understandable: if condominium debt could not be enforced against the unit, the other residents would indefinitely fund whoever does not pay. In plain terms: condominium debt is one of the few that reaches the family home — which is why it should not be left to accumulate.

What the condominium may NOT do

• Cut off water, power or gas to the unit as pressure — prevailing case law treats this as abusive, as it affects dignity and health.
• Bar the use of essential common areas (lift, garage, lobby, access to the unit). The STJ holds firmly that restricting use is not a legitimate collection method.
• Publicly expose the debtor’s name on notice boards, lifts, chat groups or posted minutes — this may amount to moral damages.
• Charge a late penalty above 2%, even if older by-laws say otherwise.
• Bar attendance at meetings — an owner in arrears may attend; what is lost is the right to vote (art. 1,335, III).

How judicial collection works

The condominium fee is an out-of-court enforceable instrument (art. 784, X, of the Civil Procedure Code). In practice, the condominium does not need a lengthy declaratory action to establish the debt: it may proceed straight to enforcement, with seizure of assets — including the unit itself.

For the condominium, it is a fast route. For the owner, it is a warning: a defence requires concrete grounds (calculation error, charges above the cap, fees already paid, defective notice of the meeting that approved the expense), not merely financial hardship.

A practical example: the review that cut the debt

An owner received a demand for R$ 38,000 in overdue fees, with a 10% penalty from an old by-law and compound interest. On review, two points stood out: the penalty was reduced to the statutory 2% cap and interest was recalculated on a simple basis, per the by-laws. The real debt became substantially smaller, and a settlement finally fit the budget — which served both sides, because the condominium got paid.

Checklist for the owner

• Request the detailed statement of the debt (periods, penalty, interest, indexation).
• Check that the penalty is within the 2% cap and how interest was applied.
• Verify that expenses were approved at a properly convened meeting.
• Keep receipts — fees paid but not credited are more common than you would think.
• If use is restricted or your name exposed, document it (photos, screenshots, minutes).
• Before buying a property, require the condominium clearance statement.

Frequently asked questions

What is the maximum late penalty on a condominium fee?

The cap is 2% of the debt, under article 1,336, §1 of the Civil Code. Older by-laws providing for 10% or 20% do not prevail on this point. Beyond the penalty, the condominium may charge default interest (as per the by-laws, or 1% per month if silent) and indexation. If the demand exceeds that cap, the amount is questionable and a recalculation is worth requesting.

Can the condominium cut off water or bar the lift for someone in arrears?

No. Prevailing case law treats cutting essential services such as water as abusive, and the STJ holds firmly that restricting the use of essential common areas — lift, garage, lobby — is not a legitimate collection method. The condominium has proper avenues: judicial collection, including enforcement, since the fee is an out-of-court enforceable instrument.

Can my flat be seized over condominium debt if it is my only home?

It can. Law 8.009/1990 protects the family home, but article 3, IV, excepts debts relating to the property itself — which includes condominium fees. Unlike most debts, condominium arrears reach the family home. That is precisely why the debt should not be left to accumulate: enforcement is fast, as the fee is an enforceable instrument.

I bought a flat with condominium debt. Do I have to pay it?

As a rule, yes. The fee is an obligation propter rem: it follows the property, not the person who incurred it. The new owner answers for prior fees and may then seek recovery from the seller, depending on the contract. That is why, before closing, you should require the condominium clearance statement signed by the manager or administrator.

Can an owner in arrears attend and vote at meetings?

Attend, yes; vote, no. Article 1,335, III of the Civil Code conditions voting rights on being current with condominium obligations. The owner in arrears keeps the right to attend, follow the discussion and speak, and may challenge irregular resolutions. Barring entry or publicly exposing the debtor’s name may give rise to liability for moral damages.

Condominium debt has a feature that makes it more serious than it looks: it follows the property and reaches the family home. In return, collection has clear limits, and checking them usually reduces the amount owed. At Falchet e Marques Sociedade de Advogados, a São Paulo firm on Avenida Paulista, we act on both sides — condominiums that need to collect and owners who need collection done correctly.

Talk to our team on WhatsApp: +55 11 95901-1854 — received a fee demand, or are you a building manager needing to structure collection? Send the statement and the by-laws so we can assess.