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Questions & Answers by John H. Gettinger, Esq.

Question:

Does the New York State Condo Act require that mortgagees are responsible for prior delinquent HOA dues for greater than 0-6 months?

Answer:

While many other state's condominium statutes provide condominiums with a "super" lien for unpaid common charges for a period of 6 months or more, unfortunately for condominiums situated in New York, Article 9-B of the Real Property Law of the State of New York does not provide a condominium with a "super" lien for any period of time. Practically, this means that mortgagees are not responsible for any delinquent common charges.

Under New York law, where multiple liens attached to the same property, each lien is granted priority based on the order in which the lien was recorded. The more senior the lien, the more likely it is that the lien holder will be paid from the proceeds of the sale of the property. Where a condominium records a lien for unpaid common charges, it will always be doing so subsequent to the recordation of a mortgage. As such, unless there are surplus funds available above the amount necessary to satisfy the mortgage being foreclosed, a condominium lien will be extinguished in a bank's foreclosure sale without the condominium recovering any funds.

In states that have adopted a "super" lien statue, the condominium's lien for unpaid common charges for a stipulated period of time (typically 6 months) is given priority over previously recorded liens, including mortgages. As such, the statutory conferred priority of a lien for unpaid common charges assures that, in the event of a foreclosure sale, the condominium will be paid back first, even before a mortgage lender.

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