Condo Media - February 2016 - 43

* In Rhode Island, which follows the Uniform
Condominium Act, a condominium association has a
super priority lien ahead of a first mortgage for six
months of condominium assessments (with the
exception of late fees, interest, and special assessments)
and for up to $7,500 in collection costs ($2,500 attorney
fees and $5,000 expenses).
argued that nothing in the plain reading
of the statute stated the mortgage is
extinguished and the super priority lien
only creates a payment preference.
Marking a huge victory for condo associations in Rhode Island, the opinion
reversed the Superior Court decision.
The Rhode Island Supreme Court held,
"[A]t best, the right of redemption
creates a conditional foreclosure: foreclosure of the super-priority lien extinguishes the first mortgage (and any
other junior liens on the unit) unless
the first mortgage redeems within the
statutory period. Here, defendant did
not redeem and, as such, relinquished
its last chance to save its security interest in the property."
The court acknowledged, "This
statutory scheme may result in a lien
for relatively minimal condominium
assessment fees nullifying a security
interest on a much larger loan, as is the
case here."
To this point, the court made reference to the Uniform Condominium
Act and the practical solutions and
safeguards that exist for lenders to
protect their security interest, such as
paying the super priority portion prior
to foreclosure or requiring assessments be paid into an escrow account.
In its conclusion, the court cited the
ancient maxim "dura lex sed lex,"
which plaintiff quoted in its brief. It
means although the law may be harsh,
it is still the law.
This victory follows, as the Rhode

Island Supreme Court noted, the recent
decisions in Nevada and Washington,
D.C., (where CAI also filed successful
amicus curiae briefs), which held the
association's lien is a true priority lien
capable of extinguishing a first mortgage
by foreclosure. The high court of Rhode
Island has spoken, and the association's
super lien is truly superior.

See the full text of the opinion at
https://www.courts.ri.gov/Courts/
SupremeCourt.
■ MARY-JOY HOWES, ESQ., IS
AN ASSOCIATE WITH THE LAW
FIRM GOODMAN, SHAPIRO
& LOMBARDI, LLC.

CAI-NE SILVER PARTNER PROFILE

Swerling Milton Winnick
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February 2016

https://www.courts.ri.gov/Courts/SupremeCourt https://www.courts.ri.gov/Courts/SupremeCourt http://www.swerling.com http://www.swerling.com

Condo Media - February 2016

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