Pot of Gold (Chargebacks) – Pre and Post Amlani

The Amlani v. YCC 473 case brought attention to the issue of condominium corporations recovering legal compliance costs through indemnification provisions in their Declarations. The court's ruling emphasized the importance of seeking cost-effective solutions before resorting to litigation and criticized the condominium corporation's actions as not acting in good faith. Subsequent cases and decisions have caused confusion over the use of indemnity clauses to recover costs through condominium liens. To avoid disputes, condominium corporations should seek legal opinions on chargebacks, review their Declarations for indemnity language, and consider augmenting indemnity provisions to cover specific costs. Best practices include sending preliminary letters outlining chargebacks, providing details in demand letters, avoiding payment plans, and maintaining a healthy operating surplus.