Condo Media - July 2015 - 40

The Region

RHODE ISLAND

Lien on This

Boards Must Understand
(and Use) the Statutory
Relief Available
[by Mary-Joy Howes, Esq.]

Almost every condominium association at one time or another will be
faced with unit owners who fail
to timely pay their assessments.
It is frustrating, annoying, and causes
boards a lot of grief. Ensuring the
payment of assessments is necessary
to keeping community associations
fiscally stable by having a regular and
predictable stream of revenue-similar
to the dependency a municipality has
on its tax revenues. When unit owners
are not paying, it threatens the financial
health of the entire association.
The Rhode Island Condominium Act,
however, gives associations great power
to collect these assessments. Boards
need to understand the statutory relief
that is available and utilize it timely to
prevent unnecessary and preventable
financial hardship to the association.
The association's assessment lien is
not only statutory, but it's contractual in
nature, as the payment of assessments
is also mandated by the condominium's
declaration. With respect to the
contractual element, a unit owner is
agreeing not only to the lien on his or
her unit but to the personal responsibility for the assessment lien. Pursuant
to Section 3.15 of the act, common
expenses must be assessed at least
annually against all unit owners in accordance with the allocations set forth
in the declaration. Pursuant to Section
3.16(a) of the act, the condominium association has an automatic lien for any
assessments levied against the property
"from the time the assessment or fine
becomes due."
Section 3.16(b)(4) of the act allows
for enforcement of the associations' lien
once any portion of the lien has been

CONDOMEDIA

delinquent for at least 60 days. The
first step is to send notice, in the manner provided in the statute, to the unit
owner and the first mortgage of record.
If assessments remain unpaid, pursuant to Section 3.16(a), the association
may foreclosure on the unit in the same
manner as a mortgage on the property
would be foreclosed. Section 3.21 outlines the notice and advertising requirements that must be complied with in
order to proceed with foreclosure of the
unit at public auction.
Section 3.16(b) provides that the
condominium's lien is prior to all liens
on a unit except for those liens recorded
prior to the declaration and not subordinated thereto, first mortgages re-

corded before the date the assessment
became delinquent, and liens for real
estate taxes and other governmental
assessments or charges against the unit.
As to first mortgages, however, there
is an exception to the exception, and
a portion of the condominium's lien
remains superior to a first mortgage.
Pursuant to Section 3.16(b) of the
act, the condo's lien is ahead of a first
mortgage to the extent of six months
of common assessments and up to
$7,500 of costs incurred in enforcing
the delinquency (not to exceed $5,000
expenses and $2,500 attorney's fees).
This amount is commonly referred to as
the "super-priority lien." This amount
does not include assessments, such as

Condo Media - July 2015

Table of Contents for the Digital Edition of Condo Media - July 2015