Condo Media - May 2010 - 16

MAINE N e w s R e g i o n a l

Mediation Program for Foreclosures
Law Raises Questions About Condominium Lien Foreclosures
n June 15, 2009, some provisions of Maine Public Law 2009, chapter 402, which established a mediation program for residential foreclosures, took effect. In some ways, the law complicates and extends the process of foreclosure by requiring mediation prior to foreclosure, but the bigger question for condominium associations is “Does the mediation requirement extend and apply to condominium lien foreclosures?” The remedy of foreclosure is provided to condominium associations where owners do not pay their assessments, and since the Maine Condominium

C A I

O

Act states that an “association’s lien may be foreclosed in like manner as a mortgage on real estate,” the determination as to whether or not the law applies to associations is unclear; condominium lien foreclosures are not specifically included or excluded in chapter 402.

Statute Clarification Efforts
Over the past several months, members of the Maine Legislative Action Committee (MELAC) have been in contact with the Maine State Bar Association (MSBA) and the Maine Bureau of Consumer Credit Protection

Your Property Management Partner
Ask about our:
Online Services using our “Smart Technology” Paperless initiatives Complete Disaster Recovery System Comprehensive approach to project management World-class ﬁnancial reporting AMO® and AAMC® designations

“Redeﬁning association management through innovation, painstaking attention to detail and an unwavering commitment to excellence and client satisfaction.”

The Dartmouth Group
800.260.5808
info@TheDartmouthGroup.com www.TheDartmouthGroup.com

to support amendments to the law and seek clarification on the question. After much debate, an amendment sponsored by the MSBA was passed and signed by the governor on Feb. 24, 2010, but the amendment did not include language that would exclude condominiums and, as a result, provides no answer. In addressing their concerns with the Bureau of Consumer Credit Protection, MELAC members were assured that officials are aware of the issue and concerns, but at this point in time the bureau has issued no formal rulings or advisory opinions on the question of whether or not the new law applies to condominium association lien foreclosures. So, the issue remains an open question for a court to decide. The mediation program was clearly not designed with condominium lien foreclosures in mind but rather to create the opportunity for lenders and borrowers to reinstate mortgages with modified loans. The program also is limited to foreclosures of “owner-occupied residential property with no more than four units that is the primary residence of the owner-occupant,” which could exclude all condominiums with more than four units or only multiunit condominium buildings with more than four units, depending on how it is interpreted. Associations are advised to contact legal counsel before initiating foreclosure proceedings as a violation of the law constitutes a violation of the Maine Unfair Trade Practices Act, which may impose severe penalties. The MELAC will continue to monitor the legislation as it relates to condominium lien foreclosures. CM

16

CONDO MEDIA • MAY 2010
Condo Media - May 2010

Table of Contents for the Digital Edition of Condo Media - May 2010
