16 Feb

            While MCIOA provides for a perfected and secured lien without the necessity of filing a physical lien statement with the county recorder or registrar of titles, and even provides for the six-month “super lien” following foreclosure of a first mortgage, the statute also provides for priority of a first mortgage over the Association’s lien. So, if a property is sold without a Resale Disclosure Certificate being requested, and a new first mortgage is recorded against the property, the new mortgage will have priority over the Association’s lien whether said lien was for amounts due for several years or, just the MCIOA-super lien amounts.

            Our office is seeing a significant increase in re-sales without Resale Disclosure Certificates being requested from the Association. Several months later a new owner is startled to find out there is an unpaid lien against the property. However, if a new first mortgage has been recorded, and, the first mortgage equals or exceeds the value of the property, the value of that Association lien is significantly diminished, if not worthless as a collection tool.

            To avoid this result, file a physical lien statement with the appropriate county index. I have yet to meet a lender who funds a loan without requiring the release of a filed lien statement against the property (not extinguished through mortgage foreclosure). 

            Thomsen & Nybeck can assist you in this regard and strongly advises spending the money to secure an Association in light of the growing trend to re-sell property without obtaining or providing a Resale Disclosure Certificate, especially re-sales by foreclosing mortgage and/or HUD. 

          Entry byGretchen Schellhas.  Gretchen is a shareholder at Thomsen & Nybeck, P.A. and Chief Executive Officer of the firm.  She practices primarily in the areas of real estate, collections, community association law and family law.


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