Missouri Condo Assessment Liens: Six-Month Priority Lost in a Nonjudicial Sale

The lien statute sits in the Uniform Condominium Act, Mo. Rev. Stat. §§ 448.1-101 to 448.4-120. Section 448.1-102 applies that act to every condominium created in Missouri after September 28, 1983, and separately lists § 448.3-116 among the handful of sections that also reach condominiums created before that date, for events and circumstances occurring after September 28, 1983. So the lien and foreclosure rules cover older Missouri condominiums too, even those still operating under declarations written for the 1963 Condominium Property Act. Missouri never enacted a common interest ownership act: the Revisor of Statutes' own index of Missouri acts lists only the Condominium Property Act and the Uniform Condominium Act. A subdivision, villa or lake development association that is not a condominium therefore has no statutory assessment lien, no statutory six-month priority and no statutory foreclosure procedure. It holds whatever the recorded declaration gives it and enforces the covenants as an ordinary contract creditor.

Under § 448.3-116(1) the lien attaches to a unit 'for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due.' Missouri is therefore a state where a condominium fine is foreclosable, not merely collectible. The same subsection pulls in the use fees, late charges and administrative charges authorized by § 448.3-102(1)(10) to (12), which are enforceable as assessments unless the declaration provides otherwise. Section 448.3-102(1)(11) supplies the only procedural brake: the board may levy 'reasonable fines' for violations of the declaration, bylaws and rules only 'after notice and an opportunity to be heard.' Where an assessment is payable in installments, the full amount becomes a lien as soon as the first installment falls due. Recording the declaration is itself record notice and perfection under subsection 4, so no separate claim of lien is filed and an owner will usually see no recorded lien document before collection starts.

Subsection 2 ranks the lien ahead of everything except four categories: liens and encumbrances recorded before the declaration, real estate taxes and other governmental assessments, a mortgage or deed of trust securing a purchase money loan recorded before August 28, 2014, and an earlier recorded mortgage, against which the association still keeps a limited priority. That limited priority is capped at six months of delinquent common expense assessments, measured on the periodic budget adopted under § 448.3-115(1), counted over the six months immediately preceding the petition to enforce the lien or the lender's own sale date, and calculated without acceleration. Subsection 7 keeps costs and attorney fees out of the priority amount, so a first mortgage holder never absorbs more than six months of budgeted assessments. Where two associations hold assessment liens on the same real estate, subsection 3 gives them equal priority unless the declaration says otherwise, and subsection 2(6) takes the lien outside the homestead exemption in § 513.475.

The choice of remedy decides whether the priority survives, and this is the trap for Missouri boards. Section 448.3-116(2)(5) provides that if the association forecloses its lien in a nonjudicial manner under chapter 443, the association 'shall not be entitled to the limited lien priority for common expense assessments.' A board that reaches for the quick trustee's sale surrenders the single advantage the statute gives it over the first mortgage holder. Boards that want the six months have to file a petition and foreclose judicially.

Where the association does use a chapter 443 power of sale, ordinary Missouri mortgage machinery applies. Section 443.320 requires the notice of sale to be advertised at least twenty times in a daily newspaper in counties containing a city of fifty thousand inhabitants or more, and in four successive issues of a weekly newspaper in other counties, with the last insertion not more than one week before the sale. Section 443.325(3) requires the foreclosing party to mail notice by certified or registered mail at least twenty days before the sale to every person who recorded a request for notice at least forty days before the sale. Section 443.410 supplies a one-year redemption right where the holder of the debt buys at the sale, but only if the person redeeming gives written notice of that purpose at the sale or within ten days before the advertised sale date, and then pays the debt, interest, any prior encumbrances, taxes and the costs of sale within the year.

Two deadlines matter to owners. Subsection 5 extinguishes the lien unless proceedings to enforce it are instituted within three years after the full amount of the assessments becomes due. Subsection 8 requires the association to furnish a recordable statement of unpaid assessments within ten business days of a written request by the unit owner or any mortgage holder, and that statement binds the association, the board and every unit owner unless the recipient knows it is false. Subsection 6 permits a deed in lieu of foreclosure, and subsection 9 gives associations a collection route that skips foreclosure altogether: once the record owner is delinquent by more than sixty days, the association may demand the rent directly from a tenant in writing, with a copy to the owner sent by first class mail or hand delivery, and may issue notice and evict under chapter 534 if the tenant does not pay. A tenant who pays the association is immune from a claim by the owner for that rent, but gains no owner rights to vote or inspect the books.

Nonpayment creates the lien automatically on the due date, with no advance notice and no recording required, because recording the declaration already perfected it. The association may sue for the money, foreclose judicially, hold a trustee's sale under chapter 443, or accept a deed in lieu. 3-116(7) says the association 'shall be entitled to recover any costs and reasonable attorneys' fees incurred in connection with the collection of delinquent assessments,' and that a judgment or decree in any action under the section 'shall include costs and reasonable attorney's fees for the prevailing party,' which cuts both ways if the owner wins.

3-102(1)(11) is not a valid charge in the first place. An owner facing enforcement started more than three years after the full assessment came due can rely on subsection 5, which extinguishes the lien on that timeline. 3-116(8) request, which the association must answer within ten business days. Owners in Missouri associations that are not condominiums have none of these statutory defenses and must read the declaration to learn what the association may do.