Louisiana condominium association held to strict compliance with lien statute.

Favored rights granted to condominium associations

Only a few types of creditors in Louisiana are granted the right to lien a debtor’s property prior to a judicial confirmation that a debt is in fact owed. This is a valuable right and should not be taken lightly.

Creditors afforded this preferred status include condominium associations, homeowners associations, general contractors and subcontractors.

Amounts to include in lien

For condominium associations, the lien amount includes at least:

• all unpaid assessments, including any amounts that have been accelerated,

• fines in excess of $250,

• late fees in excess of $250,

• interest at the rate proscribed in the condo documents, or if no such provision, then at the legal rate of interest, and

• reasonable attorney’s fees incurred by the association in collection of the assessment or enforcement of the privilege.

Arguably, if the condo documents provide for additional amounts of recovery, such as court costs, then the association can also recover those amounts as well.

Criteria for content of lien

The condo lien must:

• be in the form of an affidavit,

• be signed and verified by an officer or agent of the association,

• include the legal property description for the condo unit,

• include the name of each record owner,

• include the amount of the delinquent or accelerated amount,

• include the date on which the assessment became delinquent,

• disclose any fines in excess of $250,

• disclose any late fees in excess of $250, and

• be recorded in the mortgage records in the parish where the property is located.

Once recorded, the condo lien will prime all other liens and encumbrances except (1) mortgages recorded before either the condo declaration or condo lien, (2) property taxes and (3) government assessments in which the unit is specifically described. To preserve this ranking, a notice of the filing of a lawsuit must be recorded in the land records within one year of the recordation of the condo lien.

Failure to give the required 7 day advance notice of the filing of a lien can result in cancellation of the lien.

Louisiana law requires that seven days prior to the filing of a lien, the condo association must serve on the unit owner a statement that:

1.  details the amount of the delinquent or accelerated assessment,

2. discloses the date the assessment became delinquent or accelerated, and

3.  is executed before a notary public.

The condo association must  serve the statement on the unit owner either by personal delivery or registered or certified mail.  A court recently invalidated a lien because the unit owner was not given the seven day advance notice.

However, the mere cancellation of the lien does not mean the debt is extinguished. Whether a lien can be re-recorded depends on how much time has lapsed from the date the date of delinquency.