If registered land is subject to a mortgage at the time a condominium Master Deed is filed, the Master Deed may be accepted for filing without a discharge, subordination agreement, partial release or consent by the mortgagee. In such case the mortgage must be noted on the Master Condominium Certificate of Title and noted (on the encumbrance sheet) on the Memorandum of Unit Ownership resulting from a unit deed.
A “Subordination Agreement” or “Consent to the Condominium Regime” or similar instrument is to be noted on the Master Condominium Certificate of Title and may, but need not be, noted on any Memorandum of Unit Ownership.
If a subordination agreement or consent by the mortgagee is filed without a discharge or partial release of the mortgage, the mortgage must still be noted (on the encumbrance sheet) on the Memorandum of Unit Ownership resulting from a unit deed as set forth in the first paragraph above, until such time as the mortgage is discharged or partially released.
Note that this is a change in practice. Until August 1999, the court would approve Master Deeds subject to a prior unsubordinated mortgage, but would not approve unit deeds until the mortgage was discharged or subordinated to the Master Deed. Attorneys are cautioned to review the Master Condominium Certificate of Title as well as the relevant Memorandum of Unit Ownership.