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Condominium Liens and Tax Sales

On Behalf of | Jun 1, 2011 | Community & Condominium Associations

Over our many years of practice, we have assisted numerous condominium associations in matters relating to the enforcement of covenants and collection of assessments.  The New Hampshire Condominium Act allows association to file liens on units as security for unpaid assessments.  The value of the lien is dependent on its priority in relation to other lines and encumbrances.  New Hampshire RSA 356-B.  Despite legislative efforts to change the law, the statutory condominium lien is subordinate and junior to purchase money mortgages.  In the event of a first mortgage foreclosure, the condominium lien is usually extinguished, as there is insufficient equity in the property.

Recently the New Hampshire Supreme Court addressed whether a tax sale extinguishes a condominium lien.  The case presented an issue of first impression in the State of New Hampshire.  In a favorable decision for condominium associations, the Court held that a tax deed does not extinguish a condominium lien and the buyer of a property by tax deed is obligated to pay the unpaid assessments secured by a statutory condominium lien.  If a unit in your association is sold in connection with a tax sale, remember that you may purse the new owner for payment of past due fees that are secured by a valid lien.