Superlien Legislation: Is Ohio Next?

Generally speaking, superlien legislation allows associations to recoup at least six months worth of unpaid common expenses over pre-existing first mortgages on units. That is, the association could be paid from the proceeds of any foreclosure action against the unit, regardless of who filed, out of the sale proceeds ahead of the lender (who normally holds priority rights).

Such legislation ensures that associations have a stronger, enforceable remedy for collection of common expenses. HB 7512 (of Rhode Island), for example, now allows associations to foreclose on delinquent units, wipe out the first mortgage, and collect up to six months unpaid common expenses from the sale proceeds. However, the Colorado Common Interest Ownership Act (CCIOA) provides that a portion of the association’s lien statutorily survives a foreclosure. The CCIOA also limits the superlien to an amount equal to six months unpaid common expenses.

Superlien legislation has only been passed in a handful of states, including Connecticut, Massachusetts, Pennsylvania, Washington, West Virginia, Rhode Island and the District of Columbia.

Ott & Associates Co., LPA, is encouraging Ohio State Legislators to enact superlien legislation in Ohio during the next General Assembly Session.

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