What Is A Super Lien & Is NJ A Super Lien State
Q: Gerald, I have owned my condo for years. My building only has 6 condo units and the owners manage the building ourselves to save money. One of the owners is way behind on their monthly condo fees. Is there anything the other owners can do? Jackie, Elizabeth, NJ
A: The simple answer to your question is yes, there is something you and the other owners in your building can do–you can record a lien for the unpaid condo fees on the unit owned by the delinquent owner. After you record a lien, you have the option of foreclosing on the condo unit in question. However, if the delinquent owner has a mortgage on their condo unit, your lien for unpaid condo fees will be of secondary priority to the 1st mortgage lien. Also, it normally costs several thousand dollars to foreclose and depending on how much money the delinquent owner in your building owes in unpaid condo dues, it may not make good financial sense to foreclosure. The good news for you is that NJ is one of 20 super lien states. Super liens make sure homeowners and condominiums associations recover some of the money that they might otherwise have lost from unpaid maintenance fees.
A super lien is a level of priority assigned to an existing lien. It means that certain liens, like condo association liens, will have a level of priority for debt recovery in the event of a foreclosure on a property, ignoring priority normally given to recording dates.
To understand super liens, think about people lining up to see a concert. The first one in line is the first one allowed in the concert, and there is no cutting the line. But there might be a VIP list. And someone on the VIP list can show up at any time and walk right in no matter who got there first. The same is true for liens because you could be the first in line, but another lien can cut ahead of you if they’re on the super lien list.
Since NJ is a “super lien state,” the lender in a foreclosure action must pay the condo association for a set amount of past due assessments upon foreclosure. If your condo association has a properly recorded lien for unpaid condo fees, you can collect this amount upon a bank foreclosing. Thanks for your question, Jackie.