Requires notice to be provided ninety days prior to commencement of a foreclosure action by a homeowners' association or condominium board to enforce a lien for unpaid common charges, assessments, fines or fees.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3470
SPONSOR: Lavine TITLE OF BILL:
An act to amend the real property law and the real property actions and
proceedings law, in relation to the foreclosure of liens for unpaid
assessments due to a homeowners' association or condominium board
PURPOSE OR GENERAL IDEA OF BILL:
To require homeowners' associations and condominium boards to provide at
least ninety (90) days' notice prior to the commencement of a foreclo-
sure action to enforce a lien for unpaid common charges, assessments,
fees, or fines owed to a homeowners' association.
SUMMARY OF PROVISIONS:
§ 1: Amends Section 339-aa of the Real Property Law to require the board
of managers to provide at least 90 days' notice of a foreclosure
proceeding commencing and requires what is to be stated on that notice.
§ 2: Adds a new article 20-A to the Real Property Actions and
Proceedings Law to require a notice 90 days prior to a foreclosure
proceeding commencing from a homeowners' association in order to enforce
a lien for unpaid common charges, assessments, fees, or fines owed to a
homeowners' association and requires what is to be stated on that
notice.
§ 3: Provides the effective date.
JUSTIFICATION:
According to the United States Census Bureau, roughly 84% of newly
built, single-family homes sold in 2022 belonged to homeowners' associ-
ations. These associations can promote unity within a community. Howev-
er, they can issue fines, assessments, common charges, and fees for
various areas, pursuant to that associations' by-laws. If these go
unpaid, a homeowners' association may decide to put a lien on the prop-
erty. If enough time has passed with these charges going unpaid, a home-
owners' association may decide to commence a foreclosure proceeding on
the property.
Currently, homeowners' associations are not statutorily required to give
notice of the commencement of a foreclosure proceeding. For context,
when dealing with a mortgage foreclosure proceeding, mortgage lenders
are statutorily required to give ninety days' notice prior to the
commencement of one (RPA § 1304). To the homeowners' surprise, they may
suddenly lose their home or get paid out considerably below market value
due to the HOA's foreclosure auction. A common misconception is resi-
dents can sometimes think even though they are up to date on their mort-
gage payments, they cannot be foreclosed on, but they can.
Owning a home is a great achievement in our society. It should not be
risked due to unpaid fines that a homeowner may not have known about or
may not have been able to tend to right away (potentially because of
loss of employment, physical injury, etc.). By requiring homeowners'
associations to give notice of foreclosure proceedings to residents
pursuant to a lien for unpaid charges, it allows for additional due
process for the resident, as well as notification of the charges and the
amount owed.
PRIOR LEGISLATIVE EISOTRY:
2024: A9780 Judiciary
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the state.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to actions
commenced on and after such date.
STATE OF NEW YORK
________________________________________________________________________
3470
2025-2026 Regular Sessions
IN ASSEMBLY
January 27, 2025
___________
Introduced by M. of A. LAVINE -- read once and referred to the Committee
on Judiciary
AN ACT to amend the real property law and the real property actions and
proceedings law, in relation to the foreclosure of liens for unpaid
assessments due to a homeowners' association or condominium board
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 339-aa of the real property law, as amended by
2 chapter 104 of the laws of 1992, is amended to read as follows:
3 § 339-aa. Lien for common charges; duration; foreclosure. The lien
4 provided for in [the immediately preceding] section three hundred thir-
5 ty-nine-z of this article shall be effective from and after the filing
6 in the office of the recording officer in which the declaration is filed
7 a verified notice of lien stating the name (if any) and address of the
8 property, the liber and page of record of the declaration, the name of
9 the record owner of the unit, the unit designation, the amount and
10 purpose for which due, and the date when due; and shall continue in
11 effect until all sums secured thereby, with the interest thereon, shall
12 have been fully paid or until expiration six years from the date of
13 filing, whichever occurs sooner. In the event that unpaid common charges
14 are due, any member of the board of managers may file a notice of lien
15 as described herein if no notice of lien has been filed within sixty
16 days after the unpaid charges are due. Upon such payment the unit owner
17 shall be entitled to an instrument duly executed and acknowledged certi-
18 fying to the fact of payment. Such lien may be foreclosed by suit
19 authorized by and brought in the name of the board of managers, acting
20 on behalf of the unit owners, in like manner as a mortgage of real prop-
21 erty pursuant to article thirteen of the real property actions and
22 proceedings law, without the necessity, however, of naming as a party
23 defendant any person solely by reason of his owning a common interest
24 with respect to the property. The board of managers shall be required
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07202-01-5
A. 3470 2
1 to provide notice to the unit owner at least ninety days prior to the
2 commencement of a foreclosure proceeding at the property address and any
3 other address of record. Such notice shall be in fourteen-point type and
4 shall inform the owner that the board intends to file an action for
5 foreclosure to enforce the lien and shall state the address of the prop-
6 erty and the specific amount due. In any such foreclosure the unit owner
7 shall be required to pay a reasonable rental for the unit for any period
8 prior to sale pursuant to judgment of foreclosure and sale, if so
9 provided in the by-laws, and the plaintiff in such foreclosure shall be
10 entitled to the appointment of a receiver to collect the same. The board
11 of managers, acting on behalf of the unit owners, shall have power,
12 unless prohibited by the by-laws, to bid in the unit at foreclosure
13 sale, and to acquire and hold, lease, mortgage and convey the same. Suit
14 to recover a money judgment for unpaid common charges shall be maintain-
15 able without foreclosing or waiving the lien securing the same, and
16 foreclosure shall be maintainable notwithstanding the pendency of suit
17 to recover a money judgment.
18 Notwithstanding any other provision of this article, if a municipal
19 corporation acquires title to a unit as a result of tax enforcement
20 proceedings, such municipal corporation shall not be liable for and
21 shall not be subject to suit for recovery of the common charges applica-
22 ble to such unit during the period while title to such unit is held by
23 the municipal corporation or for the payment of any rental for the unit
24 under the provisions of this section, except to the extent of any rent
25 arising from such unit received by such municipal corporation during
26 such period.
27 Except as herein specifically provided, nothing contained herein shall
28 affect or impair or release the unit from the lien for such common
29 charges or impair or diminish the rights of the manager or the board of
30 managers on behalf of the unit owners under this section and section
31 three hundred thirty-nine-z.
32 § 2. The real property actions and proceedings law is amended by
33 adding a new article 20-A to read as follows:
34 ARTICLE 20-A
35 ENFORCEMENT OF LIENS BY A HOMEOWNERS' ASSOCIATION
36 Section 2010. Enforcement of liens by a homeowners' association.
37 § 2010. Enforcement of liens by a homeowners' association. At least
38 ninety days prior to the commencement of a foreclosure action to enforce
39 a lien for unpaid common charges, assessments, fees or fines owed to an
40 incorporated homeowners' association, which is permitted pursuant to the
41 governing documents of such association, the board or other entity
42 representing the association shall provide notice to the owner at the
43 property address and any other address of record, in at least fourteen-
44 point type, that the association intends to file an action for foreclo-
45 sure to enforce the lien and shall state the address of the property and
46 the specific amount due.
47 § 3. This act shall take effect immediately and shall apply to actions
48 commenced on and after such date.
