Oklahoma Condo Assessment Liens Rank Behind Prior Mortgages and Taxes

Section 524 sits in the Unit Ownership Estate Act, 60 O.S. Section 501 and following, which reaches only property whose owner or co-owners have recorded an express declaration submitting it to the act under Section 502. Non-condominium subdivisions run on a different track entirely, the owners association provisions at 60 O.S. Section 851 and following, where Section 852(C) supplies the lien and foreclosure power for a general homeowners association and conditions it on the owner having been told in writing when joining about the restrictions, the rules and the potential for financial liability. Which statute governs your lien therefore depends on whether the community recorded a unit ownership declaration, not on what the association calls itself.

The priority ladder in Section 524(a) is the heart of the page. Assessed sums for common expenses that remain unpaid become a lien on the unit prior to all other liens except five listed claims: taxes past due and unpaid on the unit, judgments entered in a court of record before the date of the common expense assessment, mortgage instruments of encumbrance duly recorded before that date, mechanic's and materialmen's liens for work or material supplied to the unit before that date, and mechanic's and materialmen's liens on the common elements to the extent of the unit's proportionate share. Because the mortgage carve-out turns on recording date rather than on a fixed number of months of assessments, an Oklahoma association gets none of the six-month or nine-month priority window that super-lien states grant. The ordinary first mortgage on a unit was recorded long before any given month's assessment and outranks it.

Subsection (b) describes the remedy and its limits. The assessment lien may be foreclosed by suit instituted by the council of unit owners, which Section 503(m) defines as all the unit owners, or by a duly authorized agent, in like manner as an action for foreclosure of a mortgage upon real property. That is a district court action, not a private power of sale. Two features favour the association: if the bylaws so provide, the unit owner must pay a reasonable rental for the use of the unit during the proceedings and the plaintiff is entitled to the appointment of a receiver to collect it, and the association may bid in at the foreclosure sale and then acquire, hold, lease, mortgage and convey the unit ownership estate it buys, unless the declaration prohibits that. One feature favours the owner in practice: the last sentence of subsection (b) confirms that a suit for money judgment for unpaid common expenses is maintainable without foreclosing or waiving the lien, so an association that wants its money rather than the unit has a route that does not put the home at risk.

Subsection (c) handles a voluntary sale: on sale or conveyance of a unit encumbered by an assessment lien, the lien is paid first out of the sale proceeds or by the grantee, subject to the same priority carve-outs. Subsection (d) handles the involuntary one and is the real limit on what an association can recover. Where the holder of a first mortgage of record or another purchaser takes title as a result of foreclosure of the first mortgage, that acquirer is not liable for the association's assessments chargeable to the unit which became due before it acquired title, and the unpaid share is deemed a common expense collectible from all the unit owners, the new acquirer included. The neighbours absorb the loss.

Three neighbouring sections change the arithmetic. Section 525 makes the grantee of a unit jointly and severally liable with the grantor for unpaid assessments up to the time of the conveyance, but entitles the grantee to a statement from the manager or board of managers setting out the amount owed, and caps liability at the figure in that statement, so an accurate estoppel letter is the buyer's protection. Section 523 makes each unit a separate parcel for tax assessment so that one owner's tax delinquency cannot drag the others down. Section 522 provides that the laws on homestead exemption from attachment, execution or other forced sale apply to a unit ownership estate with the same force as to any other real property, and extends the benefit to a unit owner in every case where the owner of a single family dwelling would qualify.

Enforcement runs through the district court in the county where the unit sits. S. Section 524(b) in the same manner as a mortgage foreclosure, and may ask for a receiver to collect a reasonable rental from the delinquent owner where the bylaws provide for it. If the association prefers a money judgment, subsection (b) confirms it may sue for the unpaid common expenses without foreclosing or waiving the lien. A buyer at the association's own foreclosure sale, including the association itself, takes the unit ownership estate subject to whatever claims outranked the assessment lien in the Section 524(a) list, so a purchaser must still deal with a recorded prior mortgage and any past-due taxes.

Owners have two practical defences worth knowing. First, the amount claimed must be an assessment for common expenses as defined by Section 503(k), which covers administration, maintenance, repair or replacement of the common elements, expenses agreed common by all unit owners, expenses declared common by the act, the declaration or the bylaws, and expenses incident to limited common elements. Second, Section 522 applies Oklahoma's homestead exemption from forced sale to a unit ownership estate, so the homestead defences available to any other Oklahoma homeowner are available here.

S. Section 852(C) the prevailing party in a lien enforcement action is entitled to reasonable attorney's fees fixed by the court and taxed as costs, which cuts both ways.