A mortgage lien on condominium units in foreclosure takes precedence over the condo board’s lien for unpaid common charges, Manhattan Supreme Court Justice Lucy Billings ruled on Oct. 30 and as reported in the NYLJ. The case involves three residential units and one commercial garage unit in a condo building at 455 Central Park West. The units are owned by the condo’s sponsor, 455 CPW, LLC. The sponsor defaulted on the mortgage in September 2009. AMT CADC Venture, LLC, which acquired the mortgage from now-defunct lender Amtrust Bank, initiated a foreclosure proceeding.
The condo board filed a motion in the case saying that its lien for unpaid common charges on the units should take precedence over the mortgage lien. Billings ruled that, under New York’s condo law, the “first mortgage of record,” must take precedence. The condo law does not define “first mortgage of record,” and the condo board argued that the mortgage did not count as a “first mortgage” because it was not issued for the purchase of the units.
Billings, however, said that a straightforward reading of the statute meant that AMT’s was the first mortgage and that it must be given precedence. “The legislature’s expression most indicative of its intent, its unambiguous statutory terms, leaves no reason to resort to statutory construction,” she said.