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DC Court of Appeals: Condo Lien Super-priority Trumps First Deed of Trust.

August 29, 2014 5:07 PM | Anonymous


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.,  


The 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

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