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Ahead of the Line Super-Lien Status Gives Associations A Better Shot at Collecting Fees

In most states, community associations have no special status when a unit owner  stops paying maintenance fees. But one by one, states have been adopting a  priority lien, or “super lien” provision into law, to give condominium associations and HOAs the first  priority [after municipal/tax liens] to the assets or collateral which the  property holds—allowing the association to initiate foreclosure.  

 “In the current economic climate, without a super-lien provision in place, many  communities would have been in deep trouble,” states Attorney Edmund Allcock, a partner in the Braintree, Massachusetts, firm  of Marcus, Errico, Emmer & Brooks. After a unit forecloses in a condo community, “without a super lien, you can’t recoup the unpaid fees, and remaining owners have to eat it,” he adds.  

 To date, 17 states and the District of Columbia have passed “super lien” legislation [see sidebar], but it’s been an uphill battle. Legal experts who advocate for associations point out  that resistance to the idea comes mainly from bankers and lenders—with their powerful lobbies.  

 But community associations also can wield plenty of clout. “Right now, 20 percent of the country lives in community or ‘common interest’ associations,” says Attorney Henry Goodman of Goodman, Shapiro & Lombardi, LLP, with offices in Dedham, Massachusetts and Providence, Rhode  Island. The original Massachusetts Condominium Act was passed in 1963, Goodman  points out, adding, “… in 1993 it was amended with enactment of a super-lien provision. This was  passed as an emergency act,” since the early 1990s were marked by all kinds of real estate foreclosures,  often paired with unpaid condo fees and dues.  

 Goodman notes, “Banks wanted to avoid paying the fees, taxes and assessments. These mortgage  lenders didn’t want to foreclose when unit owners walked away [from their properties]. As a  result, the association was left holding the bag. All the fees were left to the  remaining owners who were paying the debts of these deadbeats. However, there’s no law in this country [that says] people have to pick up their neighbors’ expenses.”  

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2 Comments

  • Six months is nothing to the bnks and they can drag it out mush longer knowing their liability is limited to six months. Who wrote that law the banks?
  • What about the hardships inflicted on the honest condo owner that moved out immediately, had to file bankruptcy thus destroying years of hard work building credit, and had a bank that did not foreclose for almost two years, a crooked hoa lawyer who purposely sent the court summons to a known wrong address and tried to stick the poor condo owner with thousands of dollars in legal fees in which they created. This and most hoa have an abundance of money and are managed by equally greedy companies that contributed to the initial problem by never helping the condo owner while they were in good standing for years. Don't be fooled by these hoa sob stories and their for profit management companies and lawyers. Decent human beings don't kick the little guy who has lost everything they go after the bank that is dragging their feet.