Assessment collection in stock cooperatives is a little confusing because members own shares of stock rather than title to a particular unit. The Davis-Stirling Act provides for the collection of delinquent assessments from the owners of separate interests, which includes shareholders in cooperatives.
Lien and Foreclose. The delinquent assessments of shareholders apply to their units (separate interests). As such, a lien can be filed against their unit and foreclosed if assessments remain unpaid. The legal description of the unit should include the legal description of the entire property plus a reference to the shareholder’s share certificate, occupancy agreement, proprietary lease, or any other document giving the owner exclusive use of a certain unit. And to the extent that any interest in the unit is evidenced by personal property, i.e. shares of stock, such property will be included in the foreclosure sale.
Thank you to Richard Witkin, Esq. of the collection company Witkin & Neal, Inc. for this information.
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