499A.22 - LIEN FOR ASSESSMENTS.

        499A.22  LIEN FOR ASSESSMENTS.         1.  The cooperative has a lien on a member's interest in the      cooperative for all operating charges or other assessments payable by      the member pursuant to the member's proprietary lease from the time      the operating charge or other assessment becomes due.  If carrying      charges and assessments are payable in installments, the full amount      of the charge or assessment is a lien from the first time the first      installment becomes due.  Upon nonpayment of a carrying charge or      assessment, the member may be evicted from the member's apartment      unit in the same manner as provided by law in the case of an unlawful      holdover by a tenant and the lien may be foreclosed by judicial sale      in like manner as a mortgage on real estate, or may be foreclosed by      the power of sale provided in this section.         A lien under this section is prior to all other liens and      encumbrances on a member's cooperative interest except liens and      encumbrances on the cooperative's real property which the cooperative      creates, assumes, or takes subject to, and liens for real estate      taxes and other governmental assessments or charges against the      cooperative or the member's cooperative interest.         2.  The cooperative, upon a member's nonpayment of carrying      charges and assessments and the cooperative's compliance with this      section, may sell the defaulting member's cooperative interest.  Sale      may be at a public sale or by private negotiation, and at any time      and place, but every aspect of the sale, including the method,      advertising, time, place, and terms must be reasonable.  The      cooperative shall give to the member and any sublessees of the member      reasonable written notice of the time and place of a public sale or,      if a private sale is intended, of the intention of entering into a      contract to sell and of the time after which a private disposition      may be made.  The same notice shall also be sent to any other person      who has a recorded interest in the defaulting member's cooperative      interest which would be extinguished by the sale.  The notices      required by this paragraph may be sent to any address reasonable      under the circumstances.  Sale may not be held until five weeks after      the sending of the notice.  The cooperative may buy at a public sale,      and, if the sale is conducted by a fiduciary or other person not      related to the cooperative, at a private sale.         3.  The proceeds of a sale under the preceding paragraph shall be      applied in the following order:         a.  The reasonable expenses of sale.         b.  The reasonable expenses of securing possession before      sale, and the reasonable expenses of holding, maintaining, and      preparing the cooperative interest for sale.  These expenses include,      but are not limited to, the payment of taxes and other governmental      charges, premiums on liability insurance, and to the extent provided      for by agreement between the cooperative and the member, reasonable      attorney fees and other legal expenses incurred by the cooperative.         c.  Satisfaction of the cooperative's lien.         d.  Satisfaction in the order of priority of any subordinate      claim of record.         e.  Remittance of any excess to the member.         Unless otherwise agreed, the member is liable for any deficiency.         4.  If a cooperative interest is sold pursuant to this section, a      good faith purchaser for value acquires the member's interest in the      cooperative free of the debt that gave rise to the lien under which      the sale occurred, and free of any subordinate interest.         5.  At any time before the cooperative has disposed of the      cooperative interest or entered into a contract for its disposition      under the power of sale, the member or the holder of any subordinate      security interest may cure the member's default and prevent sale or      other disposition by tendering the performance due, including any      amounts due arising from the exercise of the rights under this      section, plus the reasonable expenses of proceeding to foreclosure      incurred to the time of tender, including reasonable attorney fees of      the creditor.         6.  The property of a member other than the member's membership      interest in the cooperative is not subject to claims of the      cooperative's creditors, whether or not the member's membership      interest is subject to those claims.  
         Section History: Recent Form
         91 Acts, ch 30, §12