In 2002 the Town of Campton acquired a number of properties within a condominium by tax deed. The plaintiffs purchased one of the units at auction from the town by means of a deed that contained no covenants of title. Thereafter, the condominium association sought to collect association dues and assessments that had been assessed after the town acquired the property by tax deed. The plaintiffs denied any obligation to pay the funds and filed a petition seeking a ruling that the tax deed had wiped out the covenants of the condominium declarations. The trial court granted summary judgment to the defendant association, and the plaintiffs appealed to the Supreme Court.
The Court held that the tax lien process did not destroy the condominium, or any of the covenants which the declaration imposed upon the individual units. Thus, although the tax deeding process extinguishes prior liens for condominium fees, the property remains subject to liens for condominium fees assessed after the town takes a tax deed.
This ruling is a reminder to municipal officials that the potential for substantial dues and assessments on a condominium unit may influence the governing body’s decision whether or not to accept a deed from the tax collector. Pursuant to RSA 80:76, II-a, a governing body may refuse the tender of a tax deed if ownership of the property would subject the municipality to undesirable obligations under real estate covenants. If the tax collector tenders a deed to a condominium unit, the governing body should, in addition to determining its environmental condition, ascertain the amount of fees that are likely to be assessed during the period the town owns the property while attempting to return it to productive status.