In Drummer Boy Homes Association Inc. v. Britton, the Massachusetts Supreme Judicial Court recently ruled that condominium associations can impose consecutive, rolling super-liens against units that are delinquent in paying the common or special charges owed to the association. Condominium law in Massachusetts has always included the ability to impose regular monthly charges and irregular special assessments against units – since 1992, the law has also authorized a “super priority lien” to be filed against any units that failed to pay those charges.
The so-called super-lien takes priority over any mortgages that are also on the condominium unit, meaning that the condominium association charges are paid before the loan is paid if the unit is foreclosed on. This provides the association a very important tool in collecting its fees, because lenders require that borrowers pay the fees, and will often pay the condominium fees on behalf of the borrower in order to maintain their priority in the chain of title. (The borrower doesn’t avoid the fees when that happens – the lender simply tacks the amount paid on behalf of the borrower onto the borrower’s loan with the lender.)
The super-lien used by condominium associations can only be created and perfected when the condominium association takes specific steps to provide notice to the borrower and the lender, and the condominium law only allows for these notices to cover a six month period of unpaid condominium charges.
The importance of the Drummer Boy case was the court’s approval of the practice by which a condominium association could create and perfect a super-lien for a six month period, and then create and perfect a super-lien for the following six month period. Previously, it was argued by lenders that the super-lien was limited to a total of six months, but that argument was rejected by the SJC.
As a result of this decision, a condominium association is even better equipped to impose common charges and special assessments necessary for the successful continued operation of the association. Nevertheless, specific steps and timelines still have to be met to perfect and enforce these liens. If you’re a member of a condominium association, or a property manager working with a condominium association, contact Michael Gove at email@example.com or 413-583-5196 to discuss how to make sure these steps are being taken.