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CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN.

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, determined a lien for unpaid (condominium) common charges did not take priority over the second of two Citibank mortgages which were consolidated. Plaintiff was the winning bidder in a foreclosure action commenced by the condominium board for unpaid common charges. Plaintiff took the property subject to the “first mortgage of record.” Years before the common charges lien two mortgages taken out by the previous condominium owner had been consolidated. Plaintiff argued the second of those two consolidated mortgages should be extinguished by the foreclosure action because, by statute, the lien for the common charges was subject only to the “first mortgage of record.” The Court of Appeals held the two consolidated mortgages should be considered the “first mortgage” in this context:

Given the practical realities of this case, … the agreement between Citibank and the previous unit owner to consolidate the mortgages “into a single mortgage lien,” recorded years before the common charges lien, qualifies as “the first mortgage of record.” To hold otherwise places form over substance. Indeed, the ease with which a formulaic application of the term “first mortgage of record” can be manipulated demonstrates that such holding would not promote the statutory purpose. Plotch v Citibank, N.A., 2016 NY Slip Op 03648, CtApp 5-10-16

FORECLOSURE (CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/REAL PROPERTY LAW (CONDOMINIUM COMMON CHARGES, CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/MORTGAGES (CONDOMINIUM COMMON CHARGES, ​CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)/CONDOMINIUMS (COMMON CHARGES LIEN, ​CONSOLIDATED MORTGAGES CONSIDERED FIRST MORTGAGE OF RECORD WITH PRIORITY OVER COMMON CHARGES LIEN)

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Individual Condominium Owners Are Not Responsible for Conditions in the Common Elements of the Condominium, Which Are Under the Control of the Board of Managers—In a Case Stemming from a Slip and Fall in a Vestibule (a Common Element) the Individual Owners’ Motions for Summary Judgment Were Properly Granted

Plaintiff slipped and fell in a vestibule, one of the common elements of a condominium.  The common elements of a condominium are under the control of the board of managers, not the individual condominium owners.  Therefore the condominium owners’ motions for summary judgment were properly granted:

As a general rule, liability for a dangerous or defective condition on real property must be predicated upon ownership, occupancy, control, or special use of that property … . “[C]ondominium common elements are solely under the control of the board of managers” … . Here, the defendants, moving separately, each established their prima facie entitlement to judgment as a matter of law by demonstrating that as individual unit owners of the condominium, they had no duty to maintain the vestibule where the accident occurred, as it was one of the condominium’s common elements … . In opposition, the plaintiff failed to raise a triable issue of fact as to, inter alia, whether the defendants created the alleged wet condition that caused the plaintiff to slip and fall … . O’Toole v Vollmer, 2015 NY Slip Op 05655, 2nd Dept 7-1-15

 

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Condominium Unit Owner Has Common Law Right to Examine Books

Although a condominium unit owner is not entitled under the Business Corporation Law to examine the books and records of a condominium, an unincorporated association governed by the Real Property Law, there is a common law right of a stockholder to examine the books and records of a corporation. Because the unit owners of a condominium own the common elements of the condominium and are responsible for common expenses, the common law right of a stockholder to examine the books applies to a unit owner of a condominium.  Pomerance v McGrath, 650129/11, 9454, 1st Dept. 3-7-13

 

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Successful Challenge to Property Tax Assessment Affirmed,

The board of managers of a condominium complex successfully challenged the town valuation of the property for real estate tax purposes.  The town appealed and the Fourth Department affirmed (with two justices dissenting).  The lengthy decision includes detailed discussions of the nuts and bolts of commercial property tax assessments, including the determination of the capitalization rate, the necessary documentation for an appraisal, the necessary qualifications for an appraiser, and the use of opinion evidence. In the Matter of French Oaks Condominium v Town of Amherst, et al, 1040, CA 12-00434 Fourth Dept. 2-1-13

 

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