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BLOG / 10.31.25 /Kenneth R. Jacobs

New “90-Day Notice” Required to Start Condo and HOA Foreclosures

Last month Governor Hochul signed into law A3470, requiring Condo and HOA’s to give a separate 90-day “Notice of Intent to Foreclose” to owners in arrears before they can start foreclosure proceedings. The law amends Section 339-aa of the Real Property Law (for Condos) and adds a new Section 20A to the Real Property Actions and Proceedings Law (for HOA’s).

The new law “just” delays HOA foreclosure actions for at least 90 days after the letter is sent. In contrast, the new law could have a significant negative impact on condo associations. As a threshold problem, the law is ambiguous as to whether the 90-day notice period is measured from the date that the lien of the Condo “arises” under RPL Section 339-z, the date that the lien is “effective” under RPL Section 339-aa (i.e., when the Condo records a Notice of Lien), or even some other date occurring 90 days after the actual Notice is sent.

When Can Condos Send the Notice? We strongly hope that the 90 days will be measured from the date that the lien arises, as it would for HOA’s. In support of that argument, we would assert that it would make sense for the start dates for the notice periods for Condos and HOA to be consistent. Recording a condo Notice of Lien doesn’t provide any additional notice to a unit owner, who already knows they owe the money. The unit owner also receives a separate warning and offer of assistance from the Condo under RPAPL Section 1303 when a foreclosure starts.

If the 90-day notice period ran from the recording of a Notice of Lien, many Boards would be unable to start legal action against a defaulting owner until almost six months after the default occurs. Many By-laws do not authorize recording a condo lien for at least 30 days after payment is overdue (if not longer). And in practice, most condo associations do not instruct counsel to record a Notice of Lien until more than 60 days after the lien arises. If this Notice could only be sent at that time, then (even assuming the Notice itself was sent on day 61) legal action might not begin until 150-180 days had passed.  Add to that the already torturous timetable for Condo and HOA foreclosures, and a typical foreclosure could take 15 months or more to complete.

Meanwhile the other owners still have to pay the defaulting owner’s common charges.

When Should the Notice be Sent?  In theory, the 90-day Notice should be sent as soon as legally possible. If the law allows it to be sent when the lien arises, the Condo could send it out as early as the day after common charges are due and payable. Recall that Condos can’t start foreclosure anyway until the Notice of Lien has been recorded, so as a practical matter, at least 90 days would likely elapse from the due date of a common charge installment before the Condo would ever start a foreclosure. (Of course, unit owners may not react well if they receive a 90-day Notice of Intent to Foreclose five days after their common charges were due, even with an explanation attached; Boards must consider the political consequences.)

If Boards decide that they will (or must) wait, Boards should send out the 90-Day Notice immediately after the Notice of Lien has been recorded.

Are there Useful Alternatives or Complements to Foreclosure? The Condo Act allows Boards to seek a money judgment against a Unit Owner as well as to maintain foreclosure proceedings. (Lenders have to choose their remedy.) Commencement of a money judgment action might persuade an owner to pay before a foreclosure is started. Even though money actions are faster and easier than foreclosures, a money judgment has to be collectable to be effective, which means locating bank accounts or docketing a judgment that may come behind multiple mortgages with higher lien priority. Therefore we have discouraged money actions in favor of foreclosure. Boards may need to revisit that option, though.

Boards also should overhaul their By-laws to maximize their options. For example, Section 339-aa of the Condo Act also provides in part, “In any… foreclosure the unit owner shall be required to pay a reasonable rental for the unit for any period prior to sale pursuant to judgment of foreclosure and sale, if so provided in the by-laws, and the plaintiff in such foreclosure shall be entitled to the appointment of a receiver to collect the same.” [Emphasis added.]  Boards should make sure that the By-laws provide that they have the right to collect rent and to appoint a receiver to facilitate enforcement. The By-laws also should be amended to allow collection of interest at the maximum rate permitted by law or a stated interest rate, together with late charges high enough to hurt but low enough to remain enforceable, and to permit the Condo to demand rent and appoint a receiver to collect it.

In sum, Boards need to reexamine their collection policies to ensure that they have the legal right to act as soon as possible, even if they may decide not to do so as a policy matter. Otherwise they will remain stuck with the slow, complex condo foreclosure process that the new law promotes.