Can a Condo Board Put a Lien on My House?
If you are a condo owner, it is advisable to pay condominium special assessments and other common expenses to ensure that the condo lien is not registered against your unit. Notably, a lien is a security interest which is granted over your property to secure your debt payment or performance of other obligations. The person granting the lien is known as the lienee, and the beneficiary is the lienor. Below are a few facts about liens.
In case your condo unit falls into arrears, the manager of that property will write to you requesting for special assessment or common expenses fee. If you don’t make the payments after the request, the next step is likely to be a notice of lien.
According to the regulations of the condominium act, before registering a certificate of lien, it is mandatory to give a notice of lien to the unit owner. This will give them a chance of redeeming themselves before a lien is issued. Usually, this notice will give the owner ten days to clear the amount secured by the lien which might include collection expenses, legal costs, interest charges, and the common expenses.
A condominium corporation is required to take not more than three months to register condo liens from the date of your arrears. After this period, their right to do so will expire. Notably, if the arrear balances pass three months, it is no longer lienable. It is important to note that having a lien is a very serious issue and if it is registered against your unit, there is a high probability of losing the rights to vote in an owner’s meeting.
It is important to note that if condominium liens are not paid in full, the condo corporation can file a lawsuit with the aim of selling your unit after giving notice to the mortgage financiers. Notably, the lien always takes the priority and hence a mortgagee is required to first pay the lien amount before demanding reimbursement from the unit owner. This reimbursement can include interests and other reasonable costs. In case you fail to pay the required mortgage within the required period, the said amount will be considered due and payable according to the law.
In such a scenario, the corporation can request the court to lawfully enforce the condo lien which can jeopardize your financing and mortgage, and in the long run, it can also lead to the sale of your unit. Also, if you have rented out your unit, the condo corporation can deduct their fee from the tenant’s rent. This fee can include the cost of collection and interest charges.
Regardless of whether you have a dispute with your condominium corporation or their board members due to lack of agreement regarding the special assessments the number of common expenses, it is recommendable that you continue making payment while waiting for the issue to be resolved.