1.
a.The cooperative has a lien on a member’s interest in the cooperative for all
operating charges or other assessments payable by the member pursuant to the member’s
proprietary lease from the time the operating charge or other assessment becomes due.
If carrying charges and assessments are payable in installments, the full amount of the
charge or assessment is a lien from the first time the first installment becomes due. Upon
nonpayment of a carrying charge or assessment, the member may be evicted from the
member’s apartment unit in the same manner as provided by law in the case of an unlawful
holdover by a tenant and the lien may be foreclosed by judicial sale in like manner as a
mortgage on real estate, or may be foreclosed by the power of sale provided in this section.
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1. a. The cooperative has a lien on a member’s interest in the cooperative for all
operating charges or other assessments payable by the member pursuant to the member’s
proprietary lease from the time the operating charge or other assessment becomes due.
If carrying charges and assessments are payable in installments, the full amount of the
charge or assessment is a lien from the first time the first installment becomes due. Upon
nonpayment of a carrying charge or assessment, the member may be evicted from the
member’s apartment unit in the same manner as provided by law in the case of an unlawful
holdover by a tenant and the lien may be foreclosed by judicial sale in like manner as a
mortgage on real estate, or may be foreclosed by the power of sale provided in this section.
b. A lien under this section is prior to all other liens and encumbrances on a member’s
cooperative interest except liens and encumbrances on the cooperative’s real property which
the cooperative creates, assumes, or takes subject to, and liens for real estate taxes and other
governmental assessments or charges against the cooperative or the member’s cooperative
interest.
§499A.22, MULTIPLE HOUSING 6
2. The cooperative, upon a member’s nonpayment of carrying charges and assessments
and the cooperative’s compliance with this section, may sell the defaulting member’s
cooperative interest. Sale may be at a public sale or by private negotiation, and at any time
and place, but every aspect of the sale, including the method, advertising, time, place, and
terms must be reasonable. The cooperative shall give to the member and any sublessees of
the member reasonable written notice of the time and place of a public sale or, if a private
sale is intended, of the intention of entering into a contract to sell and of the time after which
a private disposition may be made. The same notice shall also be sent to any other person
who has a recorded interest in the defaulting member’s cooperative interest which would be
extinguished by the sale. The notices required by this subsection may be sent to any address
reasonable under the circumstances. Sale may not be held until five weeks after the sending
of the notice. The cooperative may buy at a public sale, and, if the sale is conducted by a
fiduciary or other person not related to the cooperative, at a private sale.
3. a. The proceeds of a sale under the preceding subsection shall be applied in the
following order:
(1) The reasonable expenses of sale.
(2) The reasonable expenses of securing possession before sale, and the reasonable
expenses of holding, maintaining, and preparing the cooperative interest for sale. These
expenses include, but are not limited to, the payment of taxes and other governmental
charges, premiums on liability insurance, and to the extent provided for by agreement
between the cooperative and the member, reasonable attorney fees and other legal expenses
incurred by the cooperative.
(3) Satisfaction of the cooperative’s lien.
(4) Satisfaction in the order of priority of any subordinate claim of record.
(5) Remittance of any excess to the member.
b. Unless otherwise agreed, the member is liable for any deficiency.
4. If a cooperative interest is sold pursuant to this section, a good faith purchaser for value
acquires the member’s interest in the cooperative free of the debt that gave rise to the lien
under which the sale occurred, and free of any subordinate interest.
5. At any time before the cooperative has disposed of the cooperative interest or entered
into a contract for its disposition under the power of sale, the member or the holder of
any subordinate security interest may cure the member’s default and prevent sale or other
disposition by tendering the performance due, including any amounts due arising from the
exercise of the rights under this section, plus the reasonable expenses of proceeding to
foreclosure incurred to the time of tender, including reasonable attorney fees of the creditor.
6. The property of a member other than the member’s membership interest in the
cooperative is not subject to claims of the cooperative’s creditors, whether or not the
member’s membership interest is subject to those claims.