Bulletin: CT2016001

Dear Associates:

In its April 26, 2016, decision, the Supreme Court of Connecticut held in The Neighborhood Association, Inc. v. Jill M. Limberger et al, 321 Conn. 29 (Conn. 2016), that the standard foreclosure policy required by an association to commence an action to foreclose a lien is a rule that requires notice and comment before adoption. Because the condominium association in this case adopted a standard foreclosure policy by resolution as an internal business operating procedure, and not as a rule in accordance with the notice and comment requirements of Connecticut General Statues Section 47-258 (m), it deprived the Court of subject matter jurisdiction, and the case was remanded to grant the defendant's motion to dismiss and render judgment dismissing the plaintiff's action.

Connecticut General Statutes Section 47-258 m (1) (c), effective July 1, 2010, provides that a condominium association may not commence an action to foreclose a lien on a unit unless "... the executive board has either voted to commence a foreclosure action specifically against that unit or has adopted a standard policy that provides for foreclosure against that unit."

The Limberger decision holds that an association does not have subject matter jurisdiction if it fails to comply with 47-258(m). More specifically, a condominium association must have either voted to commence a foreclosure action against the unit or have adopted a standard policy that provides for foreclosure against that unit.That standard policy, according to the court, must be adopted in the same manner as any rule would be.

If you are asked to insure title to a unit in a common interest community, and the chain of title reveals that the common interest community association commenced a foreclosure action after July 1, 2010, please confirm that the common interest community either specifically voted to foreclose against your particular unit, or that the association properly adopted a rule governing standard foreclosure policy. If you are not able to confirm either, please contact a Stewart underwriting counsel for guidance. 

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