New York Condo Lien Foreclosure: Notice of Lien, Six Years, 90-Day Warning

The lien comes from Real Property Law § 339-z, inside the Condominium Act at Article 9-B. It attaches to each unit for that unit's unpaid common charges plus interest, and it ranks ahead of all other liens except three carve-outs the statute lists in order: taxes on the unit in favor of any assessing unit, school district, special district, county or other taxing unit; all sums unpaid on a first mortgage of record; and all sums unpaid on a subordinate mortgage of record held by the New York job development authority, the New York state urban development corporation, the division of housing and community renewal, the housing trust fund corporation, the New York city housing development corporation, or, in a city having a population of one million or more, the department of housing, preservation and development. That last clause reaches New York City only, so a Buffalo or Yonkers board reads a shorter list than a Manhattan board does. New York is not a super-lien state: on a residential unit the board never jumps ahead of a first mortgage. The one exception sits in the same section and is narrow. The declaration of an exclusive non-residential condominium may provide that the lien for common charges will be superior to any mortgage liens of record.

The lien is not self-executing. Under § 339-aa it is effective only from and after the filing, in the office of the recording officer where the declaration is filed, of a verified notice of lien, and the statute dictates its contents: the name (if any) and address of the property, the liber and page of record of the declaration, the name of the record owner of the unit, the unit designation, the amount and purpose for which due, and the date when due. Two clocks run off that filing. The lien continues only until the secured sums and interest are fully paid or until expiration six years from the date of filing, whichever occurs sooner, so a notice filed and forgotten simply lapses. And if no notice of lien has been filed within sixty days after unpaid charges become due, any individual member of the board of managers may file one, which stops a divided board from sitting on a delinquency. On payment, the unit owner is entitled to an instrument duly executed and acknowledged certifying to the fact of payment.

Foreclosure runs through the mortgage machinery. Section 339-aa lets the board foreclose by suit brought in its own name on behalf of the unit owners, in like manner as a mortgage of real property under Article 13 of the Real Property Actions and Proceedings Law, with one shortcut: nobody need be named as a defendant solely because he owns a common interest in the property. First the board must give the unit owner at least ninety days notice, sent to the property address and any other address of record, in fourteen-point type, stating that it intends to file a foreclosure action, the address of the property, and the specific amount due. During the case the board may collect a reasonable rental for the unit for any period before the sale if the by-laws so provide, and the plaintiff is entitled to a receiver to collect it; unless the by-laws prohibit it, the board may bid the unit in at the sale and then hold, lease, mortgage and convey it. Section 339-aa also removes the usual election-of-remedies problem: a money-judgment suit for unpaid common charges is maintainable without foreclosing or waiving the lien, and foreclosure is maintainable while that suit is pending.

The owner-side limits sit in the same Article 13 the board must use. RPAPL § 1341 lets a defendant pay into court the amount due for principal and interest plus the costs of the action and the expenses of the proceedings to sell. If that payment comes before the judgment directing sale, the court shall dismiss the complaint without costs against the plaintiff; if it comes after judgment but before the sale, the court shall stay all proceedings on the judgment. RPAPL § 1371 then governs a sale that does not cover the debt: the board must move for leave to enter a deficiency judgment simultaneously with the motion confirming the sale and within ninety days after the sale is consummated by delivery of the proper deed of conveyance to the purchaser. If no such motion is made, § 1371(3) provides that the proceeds of the sale regardless of amount shall be deemed to be in full satisfaction of the mortgage debt and no right to recover any deficiency shall exist.

All of that is condominium law, and that is the practical answer to the New York homeowners association question. There is no Davis-Stirling-style act here and no statute handing a subdivision association a lien on a member's house. Article 9-B reaches a board of managers and each unit under a filed declaration of condominium; New York's only Real Property Law article addressed to homeowners associations by name, Article 9-D, the Electric Vehicle Rights Act, consists of the single section § 343 and says nothing about assessments, liens or foreclosure. A non-condominium association's collection power is whatever its recorded declaration created, enforced as a contract claim or, where the declaration expressly creates a lien enforceable like a mortgage, through the same RPAPL Article 13 route but without § 339-aa's six-year cap and without its ninety-day fourteen-point notice. The association's own conduct is governed by the Not-for-Profit Corporation Law, which is why a New York HOA records or meetings dispute cites N-PCL § 621 rather than anything in Article 9-B.

One transfer rule caps what a buyer inherits. Under § 339-z, on the sale or conveyance of a unit the unpaid common charges are paid out of the sale proceeds or by the grantee, and any grantor or grantee is entitled to a statement from the manager or board of managers setting forth the unpaid common charges accrued against the unit. Neither is liable, and the unit is not subject to a lien, for pre-conveyance charges in excess of the amount stated, so that statement is worth demanding at closing.

An owner who falls behind on common charges first sees a verified notice of lien recorded against the unit in the recording office where the condominium declaration was filed. That filing is what makes the lien effective, and it starts the six-year clock. If the board escalates, it must serve a ninety-day notice in fourteen-point type at the property address and any other address of record, naming the specific amount due, before commencing a foreclosure suit under RPAPL Article 13, and it may sue for a money judgment at the same time without waiving the lien.

Once the case is pending, the board can obtain a receiver and collect a reasonable rental if the by-laws provide for it, and may bid the unit in at the sale unless the by-laws forbid it. The owner can end the action under RPAPL § 1341 by paying the amount due, interest, costs and sale expenses into court. If the sale does not clear the debt, the board loses any deficiency claim unless it moves within ninety days of delivery of the deed. Enforcement is judicial throughout; there is no non-judicial or trustee sale route for a New York common-charge lien.