HOA and condo association foreclosure in New York

HOA and condo collection rules in New York, step by step

• Which law covers your community

  Check your declaration, offering plan or proprietary lease

  Condominiums are governed by the Condominium Act, Article 9-B of the Real Property Law. We did not find a New York statute that sets lien or foreclosure rules for homeowners associations that are not condos, so their collection rights come from the recorded declaration. In a co-op you own shares and hold a proprietary lease, not a deed, so the lease and bylaws decide what happens when you fall behind.

  N.Y. Real Prop. Law § 339-z

• The condo lien and when it starts

  From the day a verified notice of lien is filed

  The board has a lien on your unit for unpaid common charges plus interest. It takes effect only when a verified notice of lien is filed with the county recording officer, listing the unit, the owner, the amount, the purpose and the due date. The lien lasts until paid or for 6 years from filing, whichever comes first, and when you pay you are entitled to a signed paper saying so.

  N.Y. Real Prop. Law §§ 339-z, 339-aa

• A 90-day warning before the board sues

  At least 90 days before a foreclosure case is filed

  The board must send you a notice at the unit address and any other address on record, in 14-point type, saying it plans to file a foreclosure to enforce the lien, with the property address and the exact amount due. Use those 90 days to ask for an itemized ledger and a payment plan in writing. The Act does not require the board to offer a plan, so check your bylaws.

  N.Y. Real Prop. Law § 339-aa

• Foreclosure only through the court

  After the 90-day notice

  The board forecloses by a lawsuit in its own name, in the same way as a mortgage foreclosure under RPAPL Article 13, so you will be served and can answer. It can also sue you for a money judgment without giving up the lien. If the bylaws allow, the court can make you pay a reasonable rent for the unit until the sale and appoint a receiver to collect it, and unless the bylaws forbid it, the board can bid at the sale.

  N.Y. Real Prop. Law § 339-aa

• No priority over your first mortgage

  At any sale

  The condo lien comes ahead of other liens except property taxes, the first mortgage of record and certain state or city housing agency mortgages. That means a board foreclosure sale is taken subject to your first mortgage, and you still owe the lender. When a unit is sold, unpaid charges are paid from the sale money or by the buyer, and either one can ask the board for a statement of what is owed.

  N.Y. Real Prop. Law § 339-z

• Fines and rule violations

  When a violation is claimed

  The Act lets the board sue to recover sums due, for damages or for a court order when an owner breaks the bylaws or rules. It does not say whether fines become part of the common charge lien. Ask for a ledger that separates common charges from fines, fees and interest, and read what your bylaws allow.

  N.Y. Real Prop. Law § 339-j

Common questions in New York