Real Estate Law

Real Cases in Real Estate By Andrea Lee Negroni, Esq. – August 19, 2014 Update

A Missouri condominium association’s lien for an unpaid assessment was superior to a deed of trust securing the owner’s refinance loan. In 2004, Trish Carcopa bought a condominium at Parkway Towers in Kansas City, Missouri. In 2006, she refinanced her purchase money loan. After she bought the condo, Parkway Towers approved an assessment for major repairs totaling $2.7 million, of which Trish’s share was $78,144. When Trish did not pay the assessment, Parkway Towers Condominium Association sued to judicially foreclose its assessment lien.

The trial court held that the association’s lien for the unpaid assessment was superior to the mortgage lien, because Missouri statutes give priority to assessment liens with four exceptions only. The exceptions are: (1) liens recorded before the date of the [condo] declaration; (2) mortgages and deeds of trust for purchase of a [condo] unit, recorded before the assessment became delinquent; (3) liens for real estate taxes and government charges; and (4) a maximum of 6 months’ assessments or fines coming due before a refinancing of a unit or for a subsequent second mortgage.

Here, the statutory exception giving priority to the lien of a mortgage on the unit was inapplicable because the lender did not hold a purchase-money mortgage; Trish had refinanced. The Missouri appeals court rejected the refinance lender’s claim that Missouri law on assessment lien priority was unconstitutionally vague and ambiguous. The condominium’s lien achieved priority over the refinance lender’s deed of trust.

Board of Managers of Parkway Towers Condominium Association, Inc. v. Carcopa, 403 S.W.3d 590 (Mo. 2013), [enhanced version available to subscribers].

Real Cases in Real Estate is a periodic update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.

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