The Adage “you snooze, you lose” Applies to Claims for Surplus Funds

In Moon Lake C. A. v RBS Citizens, an unpublished Court of Appeals opinion, a condominium association applied to the circuit court when foreclosure of the first mortgage on the condominium unit resulted in surplus funds.  However, a second mortgage had already applied for the surplus funds and the circuit court had already ordered them disbursed to the second mortgagee.  The association’s claim was dismissed as untimely.

On appeal, the court of appeals upheld the dismissal.  The statute does not require an applicant to provide notice to other potentially interested parties.  The association did not explain why it waited over six weeks before making the application, or why it could not have determined the status of the funds much earlier.

The association raised the argument on appeal that its lien took priority over the second mortgagee who received the funds; however, the court did not address the isssue, finding that the claim had been properly dismissed as untimely.

© Steve Sowell 2017