Condo associations are entitled to payments, known as assessments. These payments are necessary for maintenance, administration, and association responsibilities. New York law provides condo associations with powerful enforcement tools when a condo owner fails to pay these assessments. They can impose a lien or even foreclose upon the condo unit to ensure that they receive payment. This sometimes can lead to condo lien foreclosures.
Contact an NYC Condo Lien Foreclosures Attorney
If you are a condo association board member and need to file a lien against a delinquent condo owner or pursue foreclosure, Woods Lonergan is here to help. Our NYC condo attorneys have extensive experience handling condo liens and foreclosures. We also represent condo unit owners who are facing a lien or foreclosure. Contact Woods Lonergan today to discuss your case with an experienced condo attorney.
Condo Association Liens and Foreclosures
Under New York law, condo association agreements have enforcement tools such as foreclosures and primary liens to incentivize condo owners to make regular assessment payments. When delinquency occurs, the condo association can try to recover the unpaid assessment by placing a lien on or closing the condo unit. New York’s condo association laws and the condo associations governing bylaws and CC&Rs operate together. For example, New York law gives condo associations the power to place a lien on a condo owner’s property for unpaid assessments.
However, the condo association’s governing documents may prohibit these types of liens from being placed on properties. If you are a condo owner facing a lien or foreclosure, or you are a condo association who would like to take steps to recover delinquent assessments, discussing your case with an attorney can be helpful. At Woods Lonergan, our attorneys are experienced in handling a wide range of condo disputes. We will be able to outline your legal options after carefully reviewing the language of your condo association’s governing documents.
Condo Association Lien Foreclosures in New York
When a condo association has placed a lien on a condo, it may foreclose. Under New York law, a condo association lien may be foreclosed by a suit similar to a mortgage of real property. You will need to review the condo association’s governing documents, such as their CC&Rs, to find more about your condo association’s right to foreclose.
In some cases, the bylaws will prohibit liens on condo properties. In other cases, there is no such prohibition. Condo associations must take several steps to place a lien on the property. They will need to file a verified notice of lien that provides details about the property, the required charges, and the date that the charges were due along with other information.
The condo association also needs to state that it will continue until the unpaid charges are paid with interest or until 6 years since the lien was filed. Under New York law, a condo association can file a notice of lien within 60 days of non-payment of dues. If a condo owner does pay the unpaid charges and interest, the condo association must provide them with a certificate showing that they’ve completed the payment.
The Condo Foreclosure Process in New York
The condo association can initiate a foreclosure suit when the dues remain unpaid. The condo association can file a suit in the name of the board, acting on behalf of the other condo unit. However, the board can bring a foreclosure suit unless 6 years have passed from the filing date of the notice of lien. Up until that point, the condo owner has the right to pay the delinquent dues. After a foreclosure judgment has been successful, but before the sale of the foreclosed unit, the condo owner will be required to pay a reasonable rental fee to live in the unit.
Condo Foreclosure and Lien Priority
The priority of liens is important to determine who will get paid first when there is a foreclosure sale. In most cases, the “first in time, first in right” rule applies. The lien that was recorded first in the lien records will usually have a higher priority than those recorded later. The first lien will be able to obtain funds from the foreclosure sale proceeds first. After they’ve been paid in full, any excess proceeds will go to the second lien holder. New York’s Condominium Act states that a condo association lien takes priority over all other liens, except:
- Tax liens
- Unpaid amounts on a recorded junior mortgage owned by certain government entities, such as the New York Job Development Authority, and
- Unpaid amounts on a recorded first mortgage
If you would like to find out the priority of a condo association lien, you will need to examine the condo association’s governing documents.
Can a Condo Association Foreclose If I’m Current With My Mortgage Payments?
There is a common misconception that as long as a condo owner is current with his or her mortgage payments, the condo association can’t foreclose. Condo foreclosure is somewhat different from the foreclosure process for single-family homes. With single-family homes, the mortgage company can foreclose unless the owner has missed a certain number of payments. Condo associations have more authority, however.
The condo association’s right to foreclose on a condo unit is separate from the issue of whether the owner is current on mortgage payments. The lien priority determines what will happen in a condo foreclosure. Typically a foreclosure by a condo association won’t eliminate the first mortgage since the condo association’s lien is usually lower in priority.
Discuss Your Case With a Condo Lien Foreclosures Attorney Today
The laws governing condo association foreclosures are extensive and complicated. If you are facing a foreclosure in New York, consider consulting with one of the experienced condo foreclosure attorneys at Woods Lonergan. We will carefully review your case and help you understand all of your legal options. We also represent condo boards and associations in lien and foreclosure matters. Contact Woods Lonergan today to learn more about our legal services.
Woods Lonergan PLLC helps clients with condo lien foreclosures throughout NYC including the boroughs of Manhattan and Brooklyn.