Real Cases in Real Estate By Andrea Lee Negroni, Esq. – November 20, 2013 Update

Real Cases in Real Estate By Andrea Lee Negroni, Esq. – November 20, 2013 Update

Connecticut condominium association’s super-priority lien for unpaid assessments is not a one-time benefit -- it arises in every foreclosure. Connecticut amended its condominium super-priority lien law this year, with important consequences for lenders holding loans on condos.  Connecticut law (like those of a dozen or more other states) gives a condominium association’s assessment lien priority over a first mortgage on the condo unit for up to 9 months of unpaid dues. (Before June 24, 2013, the super-priority lien amount was six months dues.) The portion of unpaid dues that trumps the first mortgage loan is called the “superlien.”

Bruce and Barbara Burke were delinquent in their condo dues, so the Chatsworth Village Homeowners Association sought to foreclose their condo in 2009 to collect the delinquency. The first mortgagee, Bank of America, paid the Burkes’ delinquent dues in 2011 and the association withdrew its foreclosure complaint. After several years’ delay involving the Burkes’ unsuccessful attempts at foreclosure mediation and loss mitigation and their subsequent bankruptcy, they again accumulated unpaid condo fees. The unit owners association sued a second time to foreclose its lien for the unpaid assessments. At that point, Bank of America claimed the association’s superlien could only be filed once, and because the previous delinquency was paid, the association lien no longer had priority over the first mortgage.

The issue decided was whether a unit owners association can invoke a superlien more than once. The Connecticut court said yes, relying on an amendment to Conn. Gen. Stat. §47-258 [enhanced version available to subscribers], which both increased the superlien amount to 9 months’ assessments and clarified that the superlien does not affect the priority of other assessment liens by the association. The court observed that “whether … the statute allows a unit owners’ association to assert its superpriority lien only once in a foreclosure action, or in any number of them, is a matter of statutory interpretation,” concluding that the language of the law did not limit the superlien to one use in one foreclosure action. As a result, the association was permitted to assert its superlien a second time, even though its prior lien was paid in full by the mortgage lender.

Chatsworth Village Homeowners Assn v. Burke, No. HHDCV126030093S (Conn. Super. Oct. 22, 2013 (Unreported) [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.

Followers of Real Cases in Real Estate will learn and be entertained by lawsuits involving nuisance, trespass, zoning violations, deed restrictions, title insurance, public utilities, mechanics liens, construction defects, adverse possession, foreclosure and eviction, divorce and marital property rights, tenants' rights, and more. Real Cases in Real Estate uncovers the unpredictable, amusing, and sometimes outrageous disputes between next-door neighbors, contractors and homeowners, condo boards and residents, real estate brokers and homebuyers, and zoning administrators and developers.

Each fully cited case summary highlights the essential law of the case and explains the principal legal theories and concepts relevant to the outcome. Plain language treatment makes Real Cases in Real Estate accessible to lawyers and laymen alike.

Whether you follow real estate law professionally or as a hobby, you'll find something new and useful in every issue of Real Cases in Real Estate.

For more information about LexisNexis products and solutions connect with us through our corporate site