New Jersey – Condo and HOA Liens

In a New Jersey mortgage foreclosure action Condominium liens and Homeowner Association liens are governed by a different set of rules. More specifically, Condominium liens are governed by N.J.S.A. 46:8B-21 whereas Homeowners association liens are governed by their own internal documents.

Condominium Liens

Pursuant to N.J.S.A. 46:8B-21, where a condominium files a lien for “any unpaid assessment” for a “share of common expenses or otherwise” it shall have priority over prior recorded liens (including prior recorded mortgages) for the total amount outstanding not to exceed the “customary condominium assessment against the unit owner for the six-month period prior to the recording of the lien.” (See N.J.S.A. 46:8B-21(a).

The aforementioned priority is limited to liens recorded prior to the Condominium association’s receipt of a summons and complaint filed in a foreclosure action OR the filing of a lis pendens with the proper county giving proper notice. (See N.J.S.A. 46:8B-21(b)(1) & (2).

When filing a lien that may receive the aforementioned priority the association is directed to notify “any holder of a prior record mortgage on the property.” (See N.J.S.A. 46:8B-21(b)(6).

Where the unit in question is purchased as the result of a foreclosure of the first mortgage the purchaser shall not be liable for any unpaid common charges or other expenses. Further, any “remaining unpaid share of common expenses and other assessments, except assessments derived from late fees or fines, shall be deemed to be common expenses collectible from all of the remaining unit owners including such acquirer, his successors and assigns.” (See N.J.S.A. 46:8B-21(e).

In practice this means that Condominium lien may have priority over a first mortgage for a total of six (6) months of common charges. In order to receive this priority the lien must have been filed prior to the commencement of a mortgage foreclosure action. Should a mortgage foreclosure action be filed prior to the recordation of a Condominium lien and Plaintiff’s counsel serve a copy of the Summons and Complaint on the Condominium Association OR file a proper Lis Pendens that provides notice of the action the contemplated priority will be cut off and non-existent.

Homeowner’s Association Liens

Homeowner’s Association liens are not governed by statute and are instead governed by their own internal documents. Therefore, it is difficult, if not impossible, to determine the priority of a Homeowner’s Association lien without reviewing said documents.

Written By Adam J. Friedman