Legislative Update: Boards Must Be Aware of New Requirements When Foreclosing Liens for Unpaid Common Charges

The Governor recently signed Bill A3470/S7413, requiring that condominium Boards provide a pre-commencement 90-day notice to unit owners against whom a lien foreclosure will be commenced. This new mandate was effectuated by amending §339-aa of the Condominium Act. The legislation also adds that such foreclosures shall be brought “pursuant to article thirteen of the real property actions and proceedings law.” As a result, the amended law may demand a host of other notices and procedures, which will slow the process and increase the costs of collection and litigation.

Article 13 of the Real Property Actions and Proceedings Law governs bank foreclosures, and it includes notice and procedural requirements not currently required of foreclosing Boards.

Section 1304 of that Article maintains its own 90-day notice requirement, instructing banks to send notices containing statutory language in a specific font size. The new provision of §339-aa, however, does not require a condo Board to employ any specific language. Instead, under the law’s new language, a Board’s 90-day letter will simply have to convey to “the owner that the board intends to file an action for foreclosure to enforce the lien and shall state . . . the specific amount due,” leaving it to the lienor to draft a notice that may or may not hold up to a challenge in court. Practitioners and Boards are reasonable to ask if these notices should be drafted and served in accordance with RPAPL §1304 since Courts have consistently upheld dismissals of foreclosure actions upon a Bank’s failure to strictly comply with the §1304 notice requirement.

If so, a condo’s foreclosure action for unpaid assessments could be dismissed due to an error, for example, failing to print the required notice in 14-point font. The action could also be dismissed for other reasons, including a failure to send separate notices to all owners. It is worth noting that even if a defendant in a mortgage foreclosure does not raise strict compliance with the §1304 notice requirement in their answer, the foreclosing Bank’s failure to strictly comply with the notice provision can be raised as a defense anytime during the proceedings until entry of a judgment of foreclosure and sale. It needs to be seen if this defense will also be available to unit owners under this new law.

Article 13 requires not just additional notices, but regulatory filings and settlement mandates. If the Legislature expects condominiums to follow Article 13 in its entirety, the Courts will likely be left with the task of carving out those directives that are impossible to meet or that conflict with Declaration terms, such as Department of Finance filings, good faith negotiations, and vacant property maintenance.

The legislation also creates a new Article 20-A within the Real Property Actions and Proceedings Law. This new law mimics the language added to §339-aa and applies it to the Boards of homeowner associations -- but without any reference to Article 13. HOA lien foreclosures are generally litigated under the same decisional law controlling condominium foreclosures. The omitted reference to Article 13 in the new 20-A will likely lead to new questions of law.

Unlike a bank’s commitment process, and due to the terms of the Declaration or a lack of funds to exercise a right of first refusal, condos and HOAs generally lack the power to deny a purchase in their association based on a purchaser’s inability to pay common charges or assessments. The association’s operating funds are limited and contingent on those collected from its members or unit owners. Ultimately, the new costs resulting from the new laws’ added burdens and lengthier proceedings will likely trickle down to the unit and homeowners.

Case Law Update: Despite Dismissal of Discrimination Claims, Board’s Actions Nonetheless Leave Them Exposed to Liability Arising from Possible Retaliation

At first blush, a court’s recent determination that a co-op Board did not discriminate against a shareholder on the basis of her disability seemed like a victory. The sting: the retaliation claims are sustained.

The parties did not dispute that the plaintiff is a person with disabilities under the State’s Human Rights Law. Her mental impairment results in severe panic attacks, depression, seizure-like events, mania, and generalized anxiety disorder, which require that she have a friend or family member stay with her at night.

After a failed attempt to sublet the unit based on her plans to obtain medical treatment in California, the plaintiff made two accommodation requests to allow a “live-in helper” and a “roommate” live in the unit due to her disability. The co-op Board denied her request based on the clear terms of the governing documents and the law allowing her to have a roommate or live-in employee as long she, too, lives in the unit – thus no approval or accommodation was needed.  In light of those responses, the shareholder commenced an action claiming discrimination, failure to provide an accommodation, and retaliation. 

The court dismissed the plaintiff’s discrimination claims, reasoning that letters between the parties establish that the plaintiff was informed, correctly, that she was permitted to have a live-in Home Health Aide to provide disability-related assistance or have a roommate, pursuant to RPL §235-f, if the Apartment was her primary residence, agreeing in substance that an accommodation was not necessary. Since the plaintiff is able to obtain the relief she seeks, i.e., have a roommate or live-in employee, the Board was “not obligated to accommodate her in the precise manner she desires,” meaning allowing the shareholder to effectively sublet her apartment.  A “modification of the House Rules to permit [the plaintiff’s] guest to remain in the Apartment when she is away would, by definition, not affect [her] use and enjoyment of the Apartment, since [she] would not be there. Neither would this accommodation be related to her disability, which, per the complaint, requires that someone is present when she is there.”

However, the court sustained the plaintiff’s claims of retaliation. She alleged that the Board retaliated against her by “barring her from subletting the Apartment; placing a security camera outside her apartment to track her movements; improperly assessing legal fees or penalties; failing to make requested repairs to the Apartment; and failing to respond to a COVID-19 Hardship Declaration she filed.” The plaintiff further alleges that the Board President told her she did not want her in the Building, and that she should move out. Whether determined to be true or later dismissed, the Board is left having to continue their defense despite a finding of non-discrimination.

The takeaway… In addition to remaining cognizant of the laws pertaining to discrimination, Boards should consider ways to manage relationships and encounters with owners and shareholders in a way that minimizes residents’ opportunities to easily allege a basis for retaliation claims – claims that could linger well after the underlying discrimination claims have been dismissed.

New York State Div. of Human Rights v. 229 E. 28th St. Owners Corp. (2025 NY Slip Op 33230)

If you have questions on this or other issues that may impact your coop/condo operations, please contact

If you have questions on this or other issues that may impact your coop/condo operations, please contact Beth Gazes at bmg@gdblaw.com or 212-935-3131.