## Facts

- Jon Michael Lucas bought a Washington, D.C. condominium unit in 2007 using a $589,750 mortgage loan secured by a recorded first deed of trust later held by U.S. Bank National Association.
- Lucas became delinquent on both condominium-association assessments and mortgage payments.
- The condominium association repeatedly scheduled foreclosure sales for unpaid assessments; U.S. Bank previously paid arrears to stop those sales.
- After at least six months of unpaid assessments accrued again, the association foreclosed under its statutory six-month “super-priority” lien.
- The foreclosure sale was advertised as being “subject to the first mortgage or first deed of trust.”
- Andrea Liu bought the unit at the association foreclosure sale for $17,000.
- The day after the sale, U.S. Bank tendered payment of the assessments, but the association returned the payment because the unit had already been sold.

## Issues

1. Under the pre-2017 version of D.C. Code § 42-1903.13, could a condominium association foreclose its six-month super-priority lien while selling the unit “subject to” the first deed of trust, leaving that lien intact?
2. Was a “subject to” super-priority sale consistent with the rule that a super-priority foreclosure extinguishes unsatisfied liens, including a first deed of trust?

## Decision

- The Court of Appeals reversed summary judgment for U.S. Bank and remanded.
- The court held that, before the 2017 amendment, an association could not foreclose the six-month super-priority lien and also sell the unit “subject to” the first deed of trust.
- A super-priority foreclosure extinguished the first deed of trust to the extent it was not satisfied by the foreclosure proceeds, notwithstanding sale advertisements or claimed equities.

## Legal Principles

- Under pre-2017 D.C. law, foreclosure of a condominium association’s six-month super-priority lien operates according to statutory lien priority and extinguishes liens not satisfied from sale proceeds, including a first deed of trust.
- An association may not alter the statutory consequences of super-priority foreclosure by marketing or structuring the sale as “subject to” a first deed of trust.
- Equitable considerations and notice language in sale advertisements cannot override statutory priority and extinguishment rules.
- The 2017 amendment requiring foreclosure notices to specify whether a sale is “not subject to” or “subject to” a first deed of trust did not retroactively authorize pre-amendment “subject to” super-priority foreclosures.

## Conclusion

The court held that, for foreclosures occurring before the 2017 statutory amendment, a condominium association enforcing its six-month super-priority lien could not preserve a first deed of trust through “subject to” sale terms; any unsatisfied portion of the first deed of trust was extinguished by the super-priority foreclosure.


Liu v. U.S. Bank Nat’l Ass’n, 179 A.3d 871 (D.C. 2018)