Condominium and Cooperative Law

A recent change in law delays the commencement of common charge lien foreclosure actions, complicating the collection of arrearages. The adverse effects of this change, however, can be minimized by careful management of the foreclosure process.

Real Property Law Section 339-aa was amended on October 17, 2025 to require, for the first time, that condominium boards provide to unit owners notice of at least 90 days prior to commencement of a common charge lien foreclosure action (in fourteen-point type), informing them of its intent to initiate such legal action. Failure to serve such a pre-commencement notice will subject any foreclosure action to dismissal. This forced delay impedes distressed condominium associations’ cash flow.

The statutory language is ambiguous as to the earliest date on which a board can serve the notice in order to start the 90-day clock running. The earlier the notice is served, the earlier a foreclosure action can be filed, minimizing the forced delay. The most aggressive tack a board can take would be to serve the notice on the day any given unit owner falls into arrears. However, that position will inevitably invite litigation which would delay any Judgment of Foreclosure because the foreclosure action is dependent upon the existence of a lien, and liens may not be filed before the arrearage has become 60 days aged. Moreover, a lien is not “effective” until it has been recorded with the County Clerk. Since a foreclosure action requires the existence of a lien, and a lien cannot be filed until the arrearage is more than 60 days old and the filing is not “effective” until recordation, service of the 90 day notice prior to recordation would arguably be premature. A less aggressive and perhaps more legally defensible stance therefore would be to serve the 90 day notice simultaneously with recordation of the lien. Either way, expeditious service of the notice at the incipient stage of the legal action will minimize the adverse financial effects of this forced delay in prosecuting lien foreclosure actions. This is consistent with our oft repeated advice to condo boards to act expeditiously in the collection of common charge arrearages so that delinquent units do not lie indefinitely fallow.

Real Property Law Section 339-aa explicitly permits condominium boards to recover from a unit owner in a foreclosure action Use and Occupancy fees for his occupancy of the unit through the date of the foreclosure sale provided that the recovery is authorized in the association by-laws. Boards should therefore review their governing document provisions to ascertain whether this authority exists, and if it does not, they should consult counsel about a by-law amendment.

Finally, Real Property Law Section 339-aa specifically permits maintenance of a money judgment action against a delinquent unit owner simultaneously with a foreclosure action. While such an aggressive strategy may end up “throwing good money after bad,” it might also provide the Board with enhanced leverage in its pursuit of arrears. Each case should be evaluated on its own particular circumstances to determine if such a strategy would be effective. 

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For more information on condominium and cooperative law matters, please contact:

Bruce A. Cholst at +1 212 592 1621 or [email protected]
Andrew J. Wagner at +1 212 592 1622 or [email protected]
Philip Tucker at +1 212 592 1482 or [email protected]

© 2025 Herrick, Feinstein LLP. HERRICK® is a registered trademark of Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.