District of Columbia Court of Appeals finds that a lien covering a period in excess of six months prior to the 2017 amendment to D.C.Code § 42-1903.13 maintains its super-priority status as a split-lien.
In a decision from the District of Columbia Court of Appeals on September 13, 2018, the Court addressed the issue of whether a condominium lien covering more than the most recent six months of condominium assessments is properly conceptualized as a split-lien.
In 4700 Conn 305 Trust v. Capital One, N.A., No. 16-CV-977 (2018), the Court stated, the statute effectively splits condominium-assessment liens into two liens of differing priority,'" which in turn dictates how the proceeds of a sale to recover the most recent six months and additional assessments will be distributed". With respect to a lien covering condominium
assessments in excess of the most recent six months, the portion of the lien covering the assessments above and beyond the most recent six months is considered a separate lien junior to the first mortgage while the portion of the lien covering the most recent six months retains its super-priority status, which has the ability to extinguish the first mortgage or Deed of Trust.
This decision supports case law where a condominium lien retains its super-priority status extinguishing the first mortgage or Deed of Trust, despite a condominium associations representations that its intent was to sell the property subject to the first mortgage or Deed of Trust and not to extinguish the first mortgage or Deed of Trust. This case further reiterates the idea that the super-priority lien status may not be waived making it likely that the amendments made to the statute in 2017 will have little to no effect on a condominium association’s super priority lien status or its inability to foreclose on a property subject to the first mortgage or Deed of Trust.
Click here for a copy of the 4700 Conn 305 Trust, Appellant, v. Capital One, N.A., Appellee.
Appeal from the Superior Court of the District of Columbia (CAR-593-15)