BILL NUMBER: S7413
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the real property law and the real property actions and
proceedings law, in relation to the foreclosure of liens for unpaid
assessments due to a homeowners' association or condominium board
 
PURPOSE OR GENERAL IDEA OF BILL:
To require homeowners' associations and condominium boards to provide at
least ninety (90) days' notice prior to the commencement of a foreclo-
sure action to enforce a lien for unpaid common charges, assessments,
fees, or fines owed to a homeowners' association.
 
SUMMARY OF PROVISIONS:
Section 1 amends Section 339-aa of'the Real Property Law to require the
board of managers to provide at least 90 days' notice of a foreclosure
proceeding commencing and requires what is to be stated on that notice.
Section 2 adds a new article 20-A to the Real Property Actions and
Proceedings Law to require a notice 90 days prior to a foreclosure
proceeding commencing from a homeowners' association in order to enforce
a lien for unpaid common charges, assessments, fees, or fines owed to a
homeowners' association and requires what is to be stated on that
notice.
Section 3 sets forth the effective date.
 
JUSTIFICATION:
According to the United States Census Bureau, roughly 84% of newly
built, single-family homes sold in 2022 belonged to homeowners' associ-
ations. These associations can promote unity within a community. Howev-
er, they can issue fines, assessments, common charges, and fees for
various areas, pursuant to that associations' by-laws. If these go
unpaid, a homeowners' association may decide to put a lien on the prop-
erty. If enough time has passed with these charges going unpaid, a home-
owners' association may decide to commence a foreclosure proceeding on
the property.
Currently, homeowners' associations are not statutorily required to give
notice of the commencement of a foreclosure proceeding. For context,
when dealing with a mortgage foreclosure proceeding, mortgage lenders
are statutorily required to give ninety days' notice prior to the
commencement of one (RPA § 1304). To the homeowners' surprise, they may
suddenly lose their home or get paid out considerably below market value
due to the HOA's foreclosure auction. A common misconception is resi-
dents can sometimes think even though they are up to date on their mort-
gage payments, they cannot be foreclosed on, but they can.
Owning a home is a great achievement in our society. It should not be
risked due to unpaid fines that a homeowner may not have known about or
may not have been able to tend to right away (potentially because of
loss of employment, physical injury, etc.). By requiring homeowners'
associations to give notice of foreclosure proceedings to residents
pursuant to a lien for unpaid charges, it allows for additional due
process for the resident, as well as notification of the charges and the
amount owed.
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill in the Senate.
2024: A9780 (Lavine) Judiciary
 
FISCAL IMPLICATIONS:
None to the State.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to actions
commenced on and after such date.

Statutes affected:
S7413: 339-aa real property law