In a stunning reversal of the holding of the D.C.
Superior Court, the D.C. Court of Appeals held that the foreclosure of a
condominium lien can extinguish the lien of a deed of trust. The case,
which was decided August 28, 2014, is Chase Plaza Condominium Association, Inc.
and Darcy, LLC, v. JP Morgan Chase Bank, N.A.,
primary issue in the case was whether the special 6 month priority given to
condominium association dues under D.C. Code § 42-1903.13 (a)(2) resulted in a
lien that if foreclosed, would extinguish all inferior liens, including deeds
of trusts and mortgages. The Superior Court had ruled that the liens were
not extinguished but the Court of Appeals reversed this ruling and held that
all subordinate liens were extinguished by the foreclosure. If this
holding is not further challenged by JP Morgan, the result will be that the
lien of all deeds of trust which are secured by condominium units are subject
to being extinguished when the unit holder fails to pay any condominium dues.
A copy of the opinion can be found at this link http://www.dccourts.gov/sites/default/files/pdf-opinions/13-CV-623plus.pdf