NEW SUPERLIEN LAW HELPS CONDO ASSOCIATIONS AND HOAs
June 28th, 2019 | Community Association Law Blog
By Mary Wynn Seiter, Esq.
Even condominium association boards that do everything right when it comes to pursuing unit owners for unpaid assessments can find themselves in a tough spot when a lender forecloses on a unit. Until recently, the best a condo association could do with regard to getting paid on its lien against the unit was to receive 6 months= worth of assessment charges from the lender – even if the unit owner had failed to pay for years while the foreclosure dragged on! And homeowner associations got even less!
This all changed with a new bill that was signed into law on April 29, 2019. The law, which amends the NJ Condominium Act as well as the Planned Real Estate Development Full Disclosure Act, allows both condominium associations and homeowner associations to assert a priority lien B a claim that is superior to the foreclosing lender=s mortgage lien B of 6 months of assessment charges for each year that the unit is in foreclosure (technically, for each year after the lender files its initial lis pendens or foreclosure complaint, whichever is filed first). This is terrific news for condo associations and homeowner associations, which now can assert and collect these superlien claims against whomever purchases the unit at the foreclosure sheriff’s sale. Instead of losing nearly all of those assessment fees, associations can now make claims for 50% of the assessment charges while the unit or lot was in foreclosure.
Connect with our law firm to learn how best to protect your association’s interests using these new statutory superlien powers! With a few simple steps in your association’s collection policy, you can protect against losing years of assessment fees when a unit or property is foreclosed!