PRIORITY LIEN LIMITED TO SIX MONTHS PLUS ATTORNEY’S FEES

Published on: January 22, 2015

Over the past twenty years or so, Massachusetts condominiums were able to collect six months of unpaid condominium fees and attorney’s fees.  In addition, they were able to collect on-going condominium fees by filing a second or third lien action, etc.  Unfortunately, on Friday, November 7, 2014 the Appeal’s Court decided that Condominium Associations are only allowed to have one priority lien at a time.

Condominium Associations must now be aware that they may not always collect all of their outstanding fees, even if they do bring an action to collect those fees within six months.  Therefore, we believe that Condominium Associations should take the following actions:

First, Associations should budget for a potential loss of unpaid condominium fees.  This line item does not have to be too great; however, it should at least be contemplated.

Second, the lien enforcement process should be started earlier.  Many Condominium Associations wait until a unit owner is five or six months behind to take action.  The lien process under Massachusetts law requires notice at sixty days.  Condominium Associations should not ignore this timeframe any longer.  The earlier the lien process starts, the less likely the Association is to lose as much in condominium fees if the owner does not pay and the unit is foreclosed upon.

Although this is a major decision and a legal blow to Condominium Associations, those Associations that react to the decision by keeping on top of the delinquent owners should not suffer any great losses.

This case may be further appealed so the outcome could possibly change in the future.  In addition, CAI will be putting together a seminar to explain the implications of this case.   Please contact Richard Brooks at rbrooks@meeb.com or Janet Aronson at jaronson@meeb.com with any questions.