New Jersey Condo Act 46:8B-21: Assessment Liens and Six-Month Mortgage Priority

Quick Answer

N.J.S.A. 46:8B-21 gives a New Jersey condominium association a lien on a unit for unpaid assessments, and a limited priority over earlier mortgages. P.L.2019, c.68 (approved April 29, 2019, effective immediately) kept the priority at six months of regular assessments and added a parallel lien statute, N.J.S.A. 45:22A-44.1, for other planned real estate developments such as homeowners' associations. The most important point for a board: the lien exists only after a signed, verified claim of lien is recorded in the county, and a lien made up solely of late fees cannot be recorded.

At a Glance

What the Law Says

The lien

Under 46:8B-21(a), the association "shall have a lien on each unit for any unpaid assessment duly made by the association," including other money duly owed, "upon proper notice to the appropriate unit owner." The lien also secures interest, late fees, fines, expenses and reasonable attorney's fees "imposed or incurred in the collection of the unpaid assessment."

The lien takes effect "from and after the time of recording" in the county public records of a claim of lien. The claim must state:

• the description of the unit;
• the name of the record owner;
• the amount due; and
• the date when due.

The claim may include "only sums which are due and payable when the claim of lien is recorded" and must be "signed and verified by an officer or agent of the association." An association "shall not record a lien in which the unpaid assessment consists solely of late fees." On full payment, the payer is entitled to a recordable satisfaction of lien.

Limited priority over mortgages

A recorded lien is generally subordinate to property tax liens, the mortgage on the unit, and other liens recorded earlier. Subsection (b) carves out a limited priority over prior recorded mortgages, except for municipal liens and federal tax liens:

• The priority is limited to "customary condominium assessments," capped at the aggregate customary assessment "for the six-month period prior to the recording of the lien," and "cumulatively renewed on an annual basis as necessary."
• The priority applies to a lien recorded before the association receives a summons and complaint to foreclose the mortgage, or before a lis pendens for that foreclosure is filed.
• If several association liens are filed, the total given priority cannot exceed the six-month amount, and earlier-recorded liens use it first.
• Apart from the annual renewal, the priority expires on the first day of the 60th month after recording.
• When recording a lien that may get priority, the association must notify any first mortgage holder in writing. An association that makes a good faith effort but cannot identify the holder is "deemed to be in substantial compliance."

"Customary condominium assessment" means periodic payments for "regular and usual operating and common area expenses pursuant to the association's annual budget." It excludes reserves for contingencies, late charges, penalties, interest, and collection fees or costs. Payments must be due monthly, or no less often than quarterly.

Sales, certificates and foreclosure

• On a voluntary conveyance, grantor and grantee are "jointly and severally liable" for unpaid assessments up to the conveyance date. The grantee alone is liable for assessments accruing during their ownership.
• An owner or purchaser before a voluntary sale may require a certificate of unpaid assessments, and the association "shall provide such certificate within 10 days after request." A mortgage or lien holder may request one too. A non-owner who relies on the certificate is limited to the amounts it states.
• A first mortgagee or other purchaser that takes title through foreclosure of the first mortgage is not liable for assessments that came due before it took title. Remaining unpaid assessments, other than those from late fees or fines, "shall be deemed to be common expenses collectible from all of the remaining unit owners."
• Liens may be foreclosed by suit in the association's name. The association may bid at the sale unless the master deed or bylaws prohibit it. A suit for a money judgment may proceed "without waiving the lien."

Other planned real estate developments

P.L.2019, c.68, section 2 created a parallel section (codified at 45:22A-44.1) with the same lien, six-month priority, 60-month limit, buyer and seller liability, certificate and foreclosure rules, using the term "assessment" instead of "customary condominium assessment." It states that it does not apply to cooperatives and does not diminish a cooperative issuer's lien or security interest in shares and the appurtenant lease.

What This Means in Practice

For boards

The statute is procedural. Recording a defective claim of lien is the easiest mistake to make. Check that the claim is signed and verified by an officer or agent, includes only sums due when recorded, and is not built on late fees alone.

Our reading: because the priority covers only "customary" assessments, a lien that mixes regular assessments with special assessments, fines, interest and legal fees will have a priority amount that is smaller than the full lien. Ledger entries should separate those categories so the priority figure can be shown.

The 60-month limit and the written notice to the first mortgage holder are separate dates to calendar. Both come from the statute text, not from the association's documents.

For owners and buyers

A buyer can ask for the unpaid assessment certificate and should do so before closing. The association has 10 days to respond. A buyer who relies on the certificate is limited to the amounts stated, but the seller and buyer remain jointly liable to the association for unpaid assessments through the conveyance date.

Open questions

Our reading is that the 2019 amendment removed the earlier phrase "if authorized by the master deed or bylaws" from the lien paragraph. Section 46:8B-15(e) still says late fees and attorney's fees may be levied "if authorized by the master deed or bylaws." How those two provisions fit together is a question for counsel. This page does not resolve it.

The statute does not say how long after recording an association must wait before filing a foreclosure suit, and this page does not address foreclosure procedure in court rules. Confirm with counsel.

Timeline

Related New Jersey Law

• N.J.S.A. 46:8B-15, association powers, fines and fees (see our page on association powers and fines)
• N.J.S.A. 45:22A-43 and 45:22A-45.2 on association membership and elections, which use a "good standing" test tied to unpaid charges (see our page on membership and elections)
• New Jersey HOA laws and regulations overview

Board Checklist

• Confirm each claim of lien is signed and verified by an officer or agent and states the unit, record owner, amount and due date.
• Do not record a lien where the unpaid amount is only late fees.
• Include only sums due and payable on the recording date.
• Track customary assessments separately from reserves, special assessments, interest, fines and collection costs.
• Send the written notice to the first mortgage holder when recording a lien that may have priority, and keep proof of the effort to identify the holder.
• Calendar the 60th-month priority expiration for each recorded lien.
• Answer assessment certificate requests within 10 days.
• Ask counsel to review the collection policy against the statute before any foreclosure filing.

Frequently Asked Questions

When does a New Jersey association's lien become effective?

Under 46:8B-21(a), the lien is effective from and after the time a claim of lien is recorded in the public records of the county where the unit is located.

Can an association record a lien for late fees alone?

No. The statute says an association "shall not record a lien in which the unpaid assessment consists solely of late fees."

How much of the lien has priority over the first mortgage?

The limited priority is capped at the customary assessments for the six-month period before recording, renewed cumulatively on an annual basis as necessary. It excludes reserves for contingencies, late charges, penalties, interest and collection costs, and it expires on the first day of the 60th month after recording (apart from the annual renewal).

Does a foreclosure buyer owe the old assessments?

A first mortgagee or other purchaser who takes title through foreclosure of the first mortgage is not liable for assessments that came due before it took title. Remaining unpaid amounts, except those from late fees or fines, are treated as common expenses shared by the remaining owners, including the new owner.

How fast must an association give an unpaid assessment certificate?

Within 10 days after request, under 46:8B-21(d).

Does this lien law apply to homeowners' associations that are not condominiums?

Yes, through 45:22A-44.1, created by P.L.2019, c.68, for planned real estate developments. It does not apply to cooperatives.

Was the priority period increased to nine months?

No. The text of P.L.2019, c.68 shows a nine-month figure struck out and "six-month" kept. The enacted priority is six months.

Where This Comes From

We read the current text of N.J.S.A. 46:8B-21 (2025 Revised Statutes edition) and the First Reprint of P.L.2019, c.68 (Assembly No. 5002), which creates 45:22A-44.1. The chaptered bill is at pub.njleg.gov. Section 45:22A-44.1 was read as it appears in the session law, not separately in the codified edition.

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Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed New Jersey attorney before acting.