499A.22 Lien for assessments.
1. a. 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.
b. 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 subsection 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. a. The proceeds of a sale under the preceding subsection shall be applied in the following order:
(1) The reasonable expenses of sale.
(2) 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.
(3) Satisfaction of the cooperative’s lien.
(4) Satisfaction in the order of priority of any subordinate claim of record.
(5) Remittance of any excess to the member.
b. 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.
91 Acts, ch 30, §12; 2012 Acts, ch 1023, §97