Mass. Ct. Says HOA Priority Lien Status is Limited to a Total of Six Months

Massachusetts Appellate Court decision (November 7, 2014)

Homeowners withheld payment of monthly HOA dues because of a dispute with their HOA over parking rules and associated fines. The association filed a court action to recover the unpaid dues and establish a priority lien in accordance with the applicable statute that allows for a lien that is superior to the first mortgage to the extent of the common expense assessments due during the six months preceding the suit. Because the homeowners continued to withhold payment of their dues, the association filed two more actions in succession. As a result, the association had three actions against the homeowners and thereby claimed that it had three six-month periods of priority lien status over the first mortgage holder.

The appellate court disagreed with the HOA’s interpretation of the governing law and affirmed the lower court’s rulings that the six-month priority period was intended as an “equitable balance between the need to enforce collection of unpaid assessments and the obvious necessity for protecting the priority of the security interests of mortgage lenders.” Thus, the association’s contention that it had enforceable liens with priority status against the homeowners’ property in an amount equal to 18 months of assessments, based on its filing of three successive lawsuits, was rejected and the HOA was limited to a total of six months of priority lien status.

See case decision: Drummer_Boy_Homes_Ass’n,_Inc