New York Law Review

Tag: Alaska Seaboard Partners Ltd. v. Remsen Gardens Condominium

  • Alaska Seaboard Partners Ltd. v. Remsen Gardens Condominium, 670 N.E.2d 402 (N.Y. 1996): Condominium Lien Expiration and Third-Party Foreclosure

    Alaska Seaboard Partners Ltd. v. Remsen Gardens Condominium, 670 N.E.2d 402 (N.Y. 1996)

    A condominium lien for unpaid common charges expires six years from the date of filing, and the commencement of a mortgage foreclosure action by a third party (e.g., a bank) does not toll the running of this six-year period.

    Summary

    This case addresses whether a third-party mortgage foreclosure action tolls the six-year expiration period for a condominium’s lien on a unit for unpaid common charges under New York’s Real Property Law § 339-aa. The Remsen Gardens Condominium Board filed liens against a unit for unpaid charges. Subsequently, a bank initiated a foreclosure action on the unit’s mortgage. The Board argued that the foreclosure action tolled the lien’s expiration. The New York Court of Appeals held that the third-party foreclosure action did not toll the lien’s six-year expiration period because the statute concerns the lien’s duration, not the time to commence an action on it, and because no provision exists for such a toll in the Condominium Act or the CPLR. Therefore, the Board’s lien lapsed.

    Facts

    1. The Remsen Gardens Condominium Board of Managers filed liens for unpaid common charges against a condominium unit in December 1988, September 1990, and February 1991.
    2. The unit owner, Mark Levine, gave a first mortgage to Chemical Bank in December 1989, which was recorded in June 1991.
    3. Levine defaulted on the mortgage, and Chemical Bank (later Alaska Seaboard Partners) commenced a foreclosure action on November 12, 1993.
    4. The Condominium Board was named as a defendant because of its asserted lien for unpaid common charges. The Board argued its lien had priority over the bank’s mortgage.

    Procedural History

    1. Alaska Seaboard moved for summary judgment, arguing that the Board’s liens had expired because they were more than six years old.
    2. The Supreme Court granted the motion, holding that the bank’s mortgage was superior to the Board’s liens.
    3. The Appellate Division affirmed, but on the separate ground that the Board’s liens had lapsed.
    4. The New York Court of Appeals granted the Board leave to appeal.

    Issue(s)

    Whether the commencement of a mortgage foreclosure action by a third party (the bank) tolls the running of the six-year expiration period for a condominium lien for unpaid common charges under Real Property Law § 339-aa.

    Holding

    No, because Real Property Law § 339-aa refers to the duration of the lien itself, not the time for commencing an action on the lien, and there is no provision in the Condominium Act or the CPLR for such a tolling.

    Court’s Reasoning

    1. The Court stated that Real Property Law § 339-aa dictates that a common charge lien “shall continue in effect until all sums secured thereby, with the interest thereon, shall have been fully paid or until expiration six years from the date of filing, whichever occurs sooner.”
    2. The Court distinguished § 339-aa from statutes of limitations, noting that it addresses the lien’s duration, not the time to sue on it. Statutes of limitations suspend the judicial remedy, while § 339-aa operates as a “qualification” to the right itself.
    3. Even if § 339-aa were treated as a statute of limitations, there is no legal basis for tolling its expiration based on a third-party foreclosure action. Neither the Condominium Act nor the CPLR contains such a provision, and there is no indication that the legislature intended such a result.
    4. The Court rejected the Board’s analogy to Lien Law § 17, which states a mechanic’s lien expires unless the lienholder commences a foreclosure action, stating that the Legislature knows how to make specific provisions for tolling when intended.
    5. The Court stated that even under Lien Law § 17, an action commenced by a party other than the lienholder would not satisfy the statutory requirements.
    6. The Court emphasized that the Board’s assertion of its lien’s priority in its answer to the bank’s complaint did not advance its position because asserting an interest in foreclosure proceeds is not equivalent to foreclosing on the lien.
    7. Since the Board did not independently foreclose its liens within the six-year period, the liens lapsed and cannot be used to claim a share of the foreclosure proceeds.
    8. Because the liens were extinguished by time, the Court deemed the issue of priority between the mortgage and the liens to be moot.