Condominium lien has priority over second recorded mortgage

In New Center Commons Condo. Assn v. Espino, et. al., the Court of Appeals held that a condominium lien had priority over a mortgage executed earlier in time but recorded later than a second-executed mortgage.

Mr. Espino purchased a unit and granted a mortgage to Quicken Loans, which was assigned to Green Tree.  He also later granted a second mortgage to PNC Bank.  The PNC bank was recorded first, then the Green Tree mortgage.

Mr. Espino subsequently defaulted in payment of assessments and the condominium association filed a lien and a judicial foreclosure.  Six years after the two mortgages were recorded and after the condominium association had filed a motion for summary disposition. PNC and Green Tree entered into a subordination agreement.  The trial court ruled that the Green Tree mortgage had priority over the condominium lien.

The court of appeals reversed, holding that under the plain language of MCLA §559.208, the PNC Mortgage was the first mortgage of record and the Green Tree mortgage was not entitled to priority.  The court of appeals reversed and remanded for entry of a judgment of priority in favor of the Condominium Association.

© Steve Sowell 2017