In Oregon, the statutory language used in regard to condominium assessment liens, and HOA assessment liens is nearly a word-for-word match in most respects. One place where the controlling law has the potential to be quite different, however, is lien priority. In this respect, a condominium association has the opportunity to be in a much more advantageous situation than any other homeowners’ association.
In general, liens follow the “first-in-time, first-in-right” rule. That is, a lien that was perfected before another lien has priority (is paid first) in a foreclosure action. It’s not always that simple, however. Sometimes, an assessment lien is perfected “retroactively” to the time the declaration was recorded, or, the lien may be deemed to have been perfected when the assessment becomes due, or, the lien may become perfected when it is recorded. Adding to the possible confusion is that in some cases, the specific priority of liens is set out by statute.
In Oregon, the priority of condominium assessment liens is set out by the lien statute. Generally, an assessment lien is prior to all other liens other than tax liens and a first mortgage or deed of trust. However, if notice is given and certain circumstances are met, a condominium lien may have “super priority” even ahead of a first mortgage or deed of trust. In order for the assessment lien to get this “super priority” 90 day advance notice must be given to the lender, among other requirements. The specific content and language required in this notice is set out in the statute.
This “super priority” is an exceptionally powerful tool to get condominium associations paid. Even if the property is foreclosed on by the original lender, the association may be protected and paid first.