If you live in a condominium or single-family home that is part of a common interest development in New York, you are most likely responsible for paying dues and assessments to a condominium association (COA) or homeowners’ association (HOA). If you fall behind in payments, in most cases the COA or HOA can get a lien on your home that could lead to a foreclosure.
Read on to learn about the particular requirements for COA and HOA foreclosures in New York.
New York COA and HOA Lien Laws
New York’s Condominium Act (N.Y. Real Prop. Law §§ 339-d through 339kk) governs COAs, while HOAs are often incorporated as nonprofit corporations and are subject to New York’s Not-for-Profit Corporation Law.
The rules regarding the operation of an HOA (including those regarding assessments liens) can be found in the association’s governing documents, such as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. (Find out more about what's in your HOA CC&Rs and other relevant documents in Nolo’s article Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
How COA and HOA Liens Work
Generally, a COA or an HOA has the power to place a lien on your property if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as assessments).
Charges the COA or HOA May Include in the Lien
State law and the COA or HOA’s governing documents will usually set out the type of charges that may be included in the lien. An HOA, for example, is often allowed to include the following in its lien:
- past-due assessments
- late charges
- interest, and/or
- attorney’s fees and costs.
In New York, a COA’s lien may include unpaid common charges plus interest, and is effective from and after the date that a verified notice of lien is recorded in the county records (N.Y. Real Prop. Law § 339-z, aa).
Lien priority determines what happens to other liens, mortgages, and lines of credit if your HOA or COA lien is foreclosed. (To learn more about lien priority and its importance in HOA foreclosures, see What happens to my mortgages if the HOA forecloses on its lien?)
New York’s Condominium Act states that a COA lien is prior to all other liens, except for:
- tax liens
- unpaid amounts on a junior mortgage held by certain government entities (such as the New York Job Development Authority) if it has been recorded, and
- unpaid amounts on a first mortgage that has been recorded (N.Y. Real Prop. Law § 339-z).
To find out the priority of an HOA lien, check the association’s governing documents.
COA and HOA Foreclosures in New York
A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)
If you default on the assessments, the COA or HOA can foreclose. (Learn more about general foreclosure laws and procedures in New York.)
Statute of Limitations for COA Liens
A COA must initiate an action to enforce the lien within six years after the date of filing (N.Y. Real Prop. Law § 339-aa). This is called the statute of limitations.
What to Do if You Are Facing Foreclosure by a COA or HOA in New York
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in New York to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)