Lien Beef
Raymond Harrison, Esq., has written legislation over the years to strengthen and expand the lien provided to our associations by the Rhode Island Condominium Law. The catchy phrase “lien beef” was coined by a creative newspaper reporter to describe the opposition of mortgage lenders and other commercial interests to pro-condo legislation written by Ray in the 1990s. Ray has been engaged in a David vs. Goliath legislative contest throughout his career as an unpaid volunteer advocate with no legislative budget. Ray advocates for condo associations against financially formidable business interests with budgets for contributions to legislators and paid lobbyists. This blog contains the history of an early legislative accomplishment that continues to help our associations receive the assessments necessary to operate associations.
What is a Condo Lien?
The condo association lien, created by the Rhode Island Condominium Law, provides our associations with a necessary and effective tool to help executive boards operate associations. Association assessments are created by boards for planned association expenses and are paid by unit owners. Condo units are subject to the condo lien held by associations to enforce the obligation of all unit owners to pay association assessments. The condo lien is a security interest held by associations on condo units.
Governmental Liens on Units
Real estate tax liens on condo units are held by municipalities to enforce the real estate tax obligations of all unit owners. In some communities, other entities, such as fire districts, water supply boards, and sewer authorities, have liens on condo unit owners to enforce obligations to pay for those services. Governmental liens existed before condominiums first appeared in Rhode Island in the 1960s. Governmental liens were the models that our condominium association liens were based upon because our associations are private forms of government.
Mortgage Liens on Units
Unit owners who borrow money and obtain mortgage loans, give mortgage liens on condo units by agreement with mortgage lenders. The agreement is in a mortgage deed signed by a borrower before receiving mortgage loan proceeds. Most buyers need mortgage financing to purchase condo units. All condo units are subject to association liens and governmental liens, and most but not all condo units are subject to mortgage liens.
How Long Does a Condo Lien Last?
When enacted in 1982, the Rhode Island Condominium Law stated that the condominium association lien was good for two years. In the early 1990s, Ray wrote legislation to increase the duration of the association lien to ten years. Ray advocated for this pro-condo legislation in the General Assembly, and it became law. In the next legislative session, mortgage lenders opposed the new law, and a competition to persuade legislators ensued. Ray negotiated with lobbyists of mortgage lenders on behalf of all Rhode Island condo associations, and it became law after a compromise was achieved. Since then, the condominium association lien has been good for six years.
Why Six Years is Better Than Two Years
Most unit owners make mortgage payments and pay association assessments in a timely fashion. When some unit owners stop making mortgage payments and paying association assessments, this results in both mortgage holders and associations acting to enforce their liens. There is an inherent conflict between condominium associations and mortgage holders when unit owners default on both obligations. Mortgage holders are in business to make profits, and condominium associations need to collect all assessments in order to pay association expenses. A mortgage lien on a condo unit is good for the term of the loan, which is often 30 years. Condominium associations have condo unit liens for six years, which gives executive boards an additional four years and helps in the collection of assessments in difficult default situations.
We Value Mortgage Lenders
Without mortgage lenders, we would not have the numerous and ever-increasing number of condominium communities in our state. Mortgage lenders provide vital services to all of us, and Ray works with them regularly while collecting delinquent assessments for associations. He respects their interests, and he advocates on behalf of his association clients while keeping that respect in mind. Over the years, Ray has established professional rapport with countless mortgage lender representatives who respect the job he does for his association clients. Ray works with mortgage lenders who often pay delinquent assessments and do so to protect their mortgage liens.
State Representative Rene Menard
Rep. Menard of District 45 sponsored the legislation referenced in this blog on behalf of all condominium associations in our state. He also sponsored many other pro-condo pieces of legislation during his time of service in the House of Representatives from 1989 to 2013. Rene was our champion in the General Assembly who devoted a great deal of time, energy, and legislative expertise to produce results that continue to benefit all of us. Thank you Rene for all that you accomplished for Rhode Island condominium communities.
