10. Condominiums: Foreclosure of lien for common expenses

(May 1, 2000, revised February 27, 2009)

By statute, a condominium organization of unit owners has a lien for unpaid common expenses. G. L. c. 183A, §6. Such lien is prior to all other liens and encumbrances on a unit except:

1. Liens and encumbrances recorded before the recording of the Master Deed;
2. A first mortgage on the unit recorded before the date on which the assessment sought be enforced became delinquent, except there is a priority over such a first mortgage to the extent of (a) common expense assessments, based on the duly adopted condominium budget, which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce the lien and also (b) any costs and reasonable attorneys' fees incurred in the action to enforce the lien; and
3. Liens for real estate taxes and other municipal assessments or charges against the unit.

To enforce priority for the common expense lien over a prior recorded first mortgage, as described in 2 above, either a lawsuit brought by the organization of unit owners must be commenced or an agreement in writing must be entered into by the first mortgagee, as provided by G. L. c. 183A §6(c).

The lien is enforced in the manner provided in G. L. c. 254, §§ 5 and 5A. Enforcement is by a civil action brought by the organization of unit owners in either the local Superior Court or the local District Court. The complaint must name as a defendant or “party-in-interest” all persons with an interest in the unit. G. L. c. 254, §5. An attested copy of the complaint, containing a sufficient description of the unit and a statement of the amount due, must be recorded at the local registry of deeds or registry district of the Land Court within thirty (30) days of the commencement of the action. Id. Failure to do so results in dissolution of the lien. Id.

The Court establishes the amount of the lien and enters an order authorizing the sale of the unit. G. L. c. 254, §5A. The Court also establishes the priority of the respective liens on the unit for purposes of the lien-enforcement sale of the unit. (Such priorities should be consistent with the priorities noted on the Memorandum of Encumbrances for the unit.)

The organization of unit owners must publish, using the form set out in G. L. c. 254, §5A, once in each of three (3) successive weeks, the first publication to appear not less than 21 days before the date of the sale, in a newspaper published in the town where the property lies, or if no newspaper is published in such town, in a newspaper published in the county where the property

lies. G. L. c. 254, §5A. The unit owner organization, or its attorney, may (it is not required by statute) cause a copy of the notice and an affidavit, stating that the requirements of the Court order and the statute have been complied with, to be recorded at the proper registry. The Land Court requires such a filing and notation on the certificate of title for the unit.

A sale of the unit conveys it subject to, and with the benefit of, all restrictions, easements, improvements, outstanding tax title(s), municipal or other public taxes, assessments and the first mortgage of record, recorded prior to the complaint, except that the sale is free of the first mortgage, if, as of the date of the sale, there are unpaid common expense assessments, costs, or reasonable attorneys fees the lien for which is given priority over the first mortgage under 2, above.

The following instruments should be registered and noted on the appropriate Memorandum of Encumbrances:

1. An attested copy of the complaint containing a sufficient description of the unit and a statement of the amount due;
2. An attested copy of the order of the court that establishes the amount of the lien and the respective priority of the liens on the Unit, identifies the portion thereof entitled to priority over any first mortgage, and authorizes the sale and sets forth the terms of the sale.
3. A copy of the notice and an affidavit, stating that the requirements of the court order and the statute have been complied with; and
4. The deed given pursuant to the judicially ordered sale, conveying the property in accordance with the statute and the court order.

No new certificate of title, however, should be issued based on the above referenced instruments. If an attorney should request a new certificate of title based on the foreclosure, he/she should be advised to file a Supplemental Petition at the Land Court in Boston.

Caveat: If a subsequent 6(d) Certificate indicates there are no unpaid assessments outstanding, a complaint which was previously registered should be dropped upon conveyance of the unit, or a notation may be registered in accordance with Guideline 21, Expired and Obsolete Encumbrances.