On April 29, 2019, Governor Murphy signed into law a package of foreclosure bills designed to help owners keep their homes, shorten the time a house sits vacant, and prevent abandoned properties from becoming eyesores. Of specific interest to community associations was the expansion of the statutory “lien priority.” The new law now provides that both condominium and homeowner associations are eligible to receive a six-month “rolling” lien priority. This means that instead of having a priority for only six months of assessments, an association may be eligible to claim a six-month priority for every year that it has a recorded lien (up to five years).
On April 29, 2019, Governor Murphy signed into law a package of foreclosure bills, all of which were all passed by the New Jersey Legislature on March 25, 2019. Among these new laws are provisions lawmakers promise will help owners keep their homes, shorten the time a house sits vacant, and prevent abandoned properties from becoming eyesores.
The big news for community associations, however, is that the new law expands the scope of lien priority for community associations. This new provision will create for the first time a lien priority for homeowner associations, and will provide both condominium associations and homeowner associations a six (6) month “rolling” lien priority. This means that instead of having a priority for six months of assessments once every five years, associations will have a six month priority once each year.
Prior to today, only condominiums in New Jersey were able to claim limited lien priority. As previously enacted, the lien priority statute entitled a condominium association to six (6) months of “aggregate customary assessments” following a mortgage lender’s Sheriff’s sale so long as the association has a lien recorded prior to the mortgage lender’s initiation of the foreclosure process. Put simply, even though this limited priority existed, it could only be exercised once every five years. So in most cases associations were forced to write off years of unpaid assessments, which increased the assessment burden for the paying owners and adversely affected associations’ budgets and the ability to make necessary repairs and/or capital replacements. Of course, homeowners associations were not even entitled to those six months of fees.
On March 25, 2019, the New Jersey Legislature passed a bill that will enhance the lien priority for condominium associations and, for the first time, give the same lien priority to homeowners associations.
If this legislation is signed by Governor Murphy, both condominium and homeowners associations will enjoy a limited priority over all other liens (except for municipal liens or liens for federal taxes). The legislation would amend the lien priority provisions already contained in the Condominium Act and add the lien priority provisions in the Planned Real Estate Development Full Disclosure Act (PREDFA).
Jonathan H. Katz, Esq., a partner in Hill Wallack’s Community Associations Practice Group, will be speaking at this year’s CAI-PA/Del Val – New Jersey Regional Council 2018 Legal & Legislative Update.
Join CAI as we review legislation and regulations that became law in the past year and will provide an update on legislation pending in the current legislative session in Trenton. We will also review relevant case law decided in the past year, including cases involving transition, dispute resolution, and collection issues. Then join us for a Happy Hour immediately following the program.
P.J. Whelihan’s Pub + Restaurant
1854 Marlton Pike East
Cherry Hill, NJ 08034
This Course is approved by the Community Association Managers International Certification Board (CAMICB) to fulfill continuing education requirements for the CMCA® certification. This course will earn managers two (2) continuing education credits, which also help satisfy the requirements to apply for the PCAM designation.
Happy hour is included with your registration! Enjoy appetizers and drink tickets following the program.
For more information or to register, click here.
Hill Wallack’s Community Associations Practice Group Is CAMICB Approved to Provide Continuing Education Courses
Hill Wallack‘s Community Associations Practice Group is proud to announce that it has been approved by the Community Association Managers International Certification Board (CAMICB) to provide continuing education courses and offer manager continuing education (CE) credits
CAMICB administers the Certified Manager of Community Associations (CMCA®) and is the professional accreditation body for more than 16,000 community association managers worldwide.
Hill Wallack has been approved to provide one (1) CE credit for each of the following courses:
- What You Should Know About the Radburn Legislation
- What You Should Know About Community Association Collections
- Community Associations & Joint Employer Liability
- Community Associations – Civility in the Workplace
If you are interested in participating in or hosting a CAMICB approved course, please contact Jonathan Katz at firstname.lastname@example.org.