Important Breaking News for Community Associations and Property Managers

If you are involved with condominiums, you have been awaiting news regarding the infamous case of Drummer Boy Homes Association, Inc. v. Britton.  The slip opinion of the decision of the Appeals Court has issued.  Unfortunately, the decision and order of the lower courts was upheld and the association was denied the ability to claim priority lien status for six-month periods in three successive actions.  It is imperative that associations and property managers understand this decision and take appropriate action with respect to delinquent balances.

The Appeals Court, in a decision from a three-justice panel, treated the issue as one of statutory interpretation.  The justices determined that the appropriate balance between the interests of the associations and those of the lenders is reached when the priority lien amount is limited to a six-month period without the extension of additional six-month periods presented by successive actions.

What does this decision mean for Massachusetts condominium associations?  In short, it means that the practice known as “rolling the lien” will not be supported by the courts.  Practically speaking, the decision means that once an association files a court complaint against a unit owner, to the extent that the case continues in the absence of payment, every month of assessments between the complaint and the ultimate foreclosure of the unit will not take precedence over the mortgage.

What can condominium associations and property managers do pending a further court decision or a statutory amendment?  First and foremost, initiate lien enforcement procedures with your legal counsel as soon as the law allows.  Next, prosecute lien enforcement cases (in the absence of payment) to foreclosure as soon as possible.  Finally, thoughtfully consider choice of legal counsel.  Under present circumstances, it will be critical for associations to be represented by attorneys well-versed in this area of law, experienced in the conduct of foreclosures and with the capacity to prosecute all lien enforcement cases with no delay.

Please feel free to contact Gary M. Daddario of this firm for assistance.

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