Condo Lien

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Priority
Facts

A unit owner stopped paying assessments.  The condominium association properly recorded and perfected a lien against the unit for those assessments.  Under the applicable Oregon statute, the condo association lien is prior to all other liens, except tax liens and a first mortgage or deed of trust.  An exception exists, such that the condominium association can gain priority over the first mortgage if (among other things) “the association gives the first lienholder formal notice of the unpaid assessments, and the lienholder ‘has not initiated judicial action to foreclose the mortgage * * * prior to the expiration of 90 days following the notice[.]’”  In this case, five days after the association recorded its lien, the bank filed a judicial foreclosure action against the unit, but did not name the association as party, and therefore the foreclosure suit would not have terminated the lien rights of the association.  To correct this issue, the bank filed an amended complaint naming the association as a party.  Five months later the trial court issued a dismissal of the claim against the association, without prejudice, for failure to prosecute.  Five months after that the association sent the bank notice of the unit owner’s default on assessments.  The bank took no action in the next 90 days to reinstate the dismissal or file a new action against the association.
Continue Reading Lien Priority Statutes and Why They Make Sense

Right, Left, Wrong
Summary

Each owner of a lot in a planned community with multiple subdivisions was required to be a member of the master association – Holly Lake Ranch Association (HLRA).  Some of the owners voted to amend their particular subdivision’s respective deed restrictions.  The effect of which was to add a voting requirement for assessments, mandatory waiver of duplicate fees for additional lots, and restricted HLRA’s lien rights.  In this particular Texas case, Roddy v. Holly Lake Ranch Association, Inc., __ S.E.2d __ (2019), the court found that the amendments were “illegal” and therefore void.  In addition, the court remanded the case to the trial court to determine the reasonableness and necessity of the attorney fees it awarded to HILRA.
Continue Reading Doing Things Wrong can be VERY Costly, Which is Why Using an Experienced Association Attorney Matters

By Golly
Summary

Declarant owned nine of 10 units, controlled the board and association, failed to have an association bank account, intermingled the assessments that were paid into his business account, never held elections or annual meetings and kept no separate corporate records.  Yet, the Court held that these failures could not be used as an excuse for not paying assessments that were due under the condominium documents.  In other words, you bought into an association, pay your assessments.
Continue Reading Owners are Liable for Assessments, Even When Corporate Formalities Not Perfectly Followed

Pointing Fingers
Summary

In Florida, mere ownership of a condominium makes you liable for all assessments which come due while you are an owner AND all assessments of previous owners.

The Facts

Defendant, Fla Trust Services, bought the condominium in question on July 26, 2016 by quit claim deed. The seller was Homes HQ, LLC who had bought it on June 13, 2016 at a judicial sale held as a result of a final judgment of foreclosure obtained by JPMorgan Chase Bank, NA. After Defendant took ownership, the plaintiff association filed suit based on a lien foreclosure and for damages. The parties agreed that the sole issue was whether the was Defendant liable for unpaid assessments back to June 13, 2016 or back to 2007, when the purchasers bought the condominium.
Continue Reading Owner Liable for Prior Owners Assessments – Who Knew?

Hour Glass
Summary

The United States District Court held that a prior recorded condominium lien had priority over a federal tax lien but only to the extent of the amount stated in the lien notice. SO make sure you get everything you should in your lien filing.

I want to thank attorney William Z. Kolobaric and Hirzel Law, PLC in Michigan for bringing this case to my attention and for allowing me to reprint large portions of their blog on this subject.

The Facts

Defendant Pamela Norwood (“Norwood”) bought a condominium unit in March 2015 in the Yarmouth Commons Condominium project (“Condominium Unit”).  On April 6, 2015, the IRS made an assessment of past due income taxes against Norwood for the 2009 tax year she failed to pay but it was not until February 8, 2016 that the IRS recorded a Notice of Federal Tax Lien with the Macomb County Register of Deeds against Norwood’s property in Macomb County, which included the Condominium Unit.  About 10 days earlier, on January 28, 2016, Yarmouth Commons Association (“Association”) recorded a notice of lien with the Macomb County Register of Deeds in the amount of $1,490.00 for unpaid assessments, exclusive of interest, costs, attorney fees and any future assessments which may become due.
Continue Reading Your Condo Lien can be Prior to a Federal Tax Lien if you File it Correctly, Timely & for the Full Amount Due