§ 4315 — Lien for assessments

(a) General rule.--The association has a lien on a cooperative interest for any assessment levied against that cooperative interest, including payments to be made by declarant pursuant to section 4314(g) (relating to assessments for common expenses), or fines imposed against its owner from the time the assessment or fine becomes due. A judicial or other sale of the cooperative interest shall not affect the lien of a mortgage thereon if the mortgage is or shall be prior to all other liens upon the same property except those liens identified in 42 Pa.C.S. § 8152(a) (relating to judicial sale as affecting lien of mortgage) and liens for cooperative assessments created under this section. Unless the declaration otherwise provides, fees, charges, late charges, fines and interest charged pursuant to section 4302(a)(11) and (12) (relating to powers of association) and reasonable costs and expenses of the association, including legal fees, incurred in connection with collection of any sums due the association by the unit owner or enforcement of the provisions of the declaration, bylaws, rules or regulations against the unit owner are enforceable as assessments under this section. If an assessment is payable in installments and one or more installments is not paid when due, the entire outstanding balance becomes effective as a lien from the due date of the delinquent installment. Upon nonpayment of the assessment, the proprietary lessee may be evicted in the same manner as provided by law in the case of an unlawful holdover by a commercial tenant, and the lien may be foreclosed by judicial sale of the cooperative interest in like manner as a mortgage on real estate.

(b) Priority of lien.--

(1) A lien under this section is prior to all other liens and encumbrances on a cooperative interest except:

(i) Liens and encumbrances on the cooperative which the association creates, assumes or takes subject to.

(ii) (A) The first security interest encumbering only the cooperative interest and perfected before the date on which the assessment or the first installment payable on the assessment, if the assessment is payable in installments, sought to be enforced became delinquent.

(B) Judgments obtained for obligations secured by a security interest under clause (A).

(iii) Liens for real estate taxes and other governmental assessments or charges against the cooperative or the cooperative interest.

(2) The association's lien for assessments shall be divested by a judicial sale of the cooperative interest:

(i) As to unpaid common expense assessments made under section 4314(b) that come due during the six months immediately preceding the date of a judicial sale of a cooperative interest in an action to enforce collection of a lien against a cooperative interest by a judicial sale, only to the extent that the six months unpaid assessments are paid out of the proceeds of the sale.

(ii) As to unpaid common expense assessments made under section 4314(b) other than the six months assessment referred to in subparagraph (i), in the full amount of these unpaid assessments, whether or not the proceeds of the judicial sale are adequate to pay these assessments.

To the extent the proceeds of the sale are sufficient to pay some or all of these additional assessments, after satisfaction in full of the costs of the judicial sale, and the liens and encumbrances of the types described in paragraph (1) and the unpaid common expense assessments that come due during the six-month period described in subparagraph (i), they shall be paid before any remaining proceeds may be paid to any other claimant, including the prior owner of the cooperative interest.

(3) The lien is not subject to the provisions of 42 Pa.C.S. § 8123 (relating to general monetary exemption).

(c) Multiple liens on same property.--Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority.

(d) Notice and perfection of lien.--Subject to the provisions of subsection (b), recording of the declaration constitutes record notice and perfection of the lien. No further recordation or filing of any claim of lien for assessment under this section is required.

(e) Limitation of actions.--A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the date on which the full amount of the assessment becomes due or, if paid in installments, the date on which the first installment payable on the assessment becomes due.

(f) Other remedies preserved.--This section does not prohibit actions to recover sums for which subsection (a) creates a lien or prohibit an association from taking a transfer or assignment in lieu of foreclosure.

(g) Costs and attorney fees.--A judgment or decree in any action brought under this section must include costs and reasonable attorney fees for the prevailing party.

(h) Statement of unpaid assessments.--The association, upon written request, shall furnish to a proprietary lessee a statement setting forth the amount of unpaid assessments against his cooperative interest. The statement must be in recordable form. The statement must be furnished within ten business days after receipt of the request and is binding on the association, the executive board and every proprietary lessee.

(i) Application of payments.--

(1) Unless the declaration otherwise provides, any payment received by an association in connection with the lien under this section shall be applied:

(i) First to any interest accrued by the association.

(ii) Second to any late fee.

(iii) Third to any costs and reasonable attorney fees incurred by the association in collection or enforcement.

(iv) Last to the delinquent assessment.

(2) Paragraph (1) shall apply notwithstanding any restrictive endorsement, designation or instructions placed on or accompanying a payment.

Legislative History

(Nov. 30, 2004, P.L.1499, No.190, eff. 60 days) 2004 Amendment.Act 190 amended subsec. (b)(1) and (2) and added subsec. (i). Cross References.Section 4315 is referred to in sections 4102, 4302, 4319, 4405 of this title.