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CAI LAWYERS LEAD EFFORTS TO PROTECT STATE PRIORITY LIEN LAWS

5/4/2017  -  Falls Church, VA

Community Associations Institute (CAI) endorses new amicus curiae brief supporting community association priority lien rights

May 4, 2017 — Falls Church, VA — Community Associations Institute (CAI), the leading international authority in community association governance, management, and education, announced that Jaime Fraser Carr, Esq., and Marvin J. Nodiff, attorneys with The Community Association Lawyers in Missouri, filed the first amicus curiae brief on behalf of CAI with the Supreme Court of the United States in the case:

BOURNE VALLEY COURT TRUST,
Petitioner,
v.
WELLS FARGO BANK, N.A,
Respondent

Mr. Nodiff is a fellow of the College of Community Associations Lawyers. Ms. Carr and Mr. Nodiff have been leading the efforts to file amicus curiae briefs with the courts in Nevada specifically on cases related to limited lien priority for community association assessments. 

Uniform Common Interest Ownership Act (UCIOA) — along with its predecessor acts, the Uniform Condominium Act, the Model Real Estate Cooperative Act, and the Uniform Planned Community Act (collectively, the "Uniform Laws") — facilitate an association's ability to collect common expense assessments by providing that, subject to limited exceptions, the association's lien is prior to all encumbrances that arise after the recording of the declaration. The rationale for this approach lies in the realization that the association is an involuntary creditor that is obligated to advance services to owners in return for a promise of future payments; and the owners' default in these payments could impair the association's financial stability and its practical ability to provide the obligated services. The priority of the association's lien is critical because if there is insufficient equity in a unit/parcel to provide a full recovery of unpaid assessments, the association must (as explained above) either reassess the remaining unit owners or reduce maintenance and services. The potential impact of these acts on the community and the association's status as an involuntary creditor argue in favor of providing the association lien with priority vis-à-vis competing liens.

Carr and Nodiff argue in support of the Petitioner and in support of the 21 states and the District of Columbia with statutory right for an association to have a true priority in their lien rights.

"CAI is extremely grateful to the attorneys leading the efforts to protect state statutory priority lien rights for community associations. Priority lien is critical for the financial stability of homeowners associations and condominiums," said Thomas M. Skiba, CAE, CAI's chief executive officer.

CAI continues to pursue efforts to protect priority lien states to enable community associations to perform their role in maintaining critical services. CAI encourages at a minimum for states to adopt the 2014 revised version of UCIOA Section 3-116 priority lien language. Statutes that do not reflect the UCIOA language may be strengthened by increasing the period for which associations are given a lien, explicitly stating priority lien is a priority in right and not merely a priority to payment, and including in the priority lien, reasonable attorney's fees and costs associated with collection.

CAI is hopeful the supreme court will hear this case and that CAI's brief helps to protect the financial stability of the community associations in which 68 million Americans reside.

Access the full amicus curiae brief here.

 

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About Community Associations Institute (CAI)
Since 1973, Community Associations Institute (CAI) has been the leading provider of resources and information for homeowners, volunteer board leaders, professional managers, and business professionals in more than 338,000 community associations, condominiums, and co-ops in the United States and millions of communities worldwide. With more than 34,000 members, CAI works in partnership with 62 affiliated chapters within the U.S, Canada, and South Africa, as well as with housing leaders in a number of countries including Australia, Spain, Saudi Arabia, United Arab Emirates, and the United Kingdom.  

A global nonprofit 501(c)(6) organization, CAI is the foremost authority in community association management, governance, education, and advocacy. Our mission is to inspire professionalism, effective leadership, and responsible citizenship—ideals reflected in community associations that are preferred places to call home. Visit us at www.caionline.org and follow us on Twitter and Facebook @CAISocial.

About the College of Community Association Lawyers
The College of Community Association Lawyers (College or CCAL) includes lawyers who have demonstrated skill, experience and high standards of professional and ethical conduct in the practice of community association law, and who are dedicated to excellence in the specialized practice of community association law.

The College provides advanced professional educational programs to its fellows and identifies and contributes to the solution of community association legal challenges. It is a collegial forum for the exchange and development of ideas by some of the most knowledgeable attorneys in community association law at www.ccalonline.org


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