Justice Barbara Jaffe
Board of Managers of a condominium sought to appoint a temporary receiver for a vacant condo unit owned by Robert and Susan Sacher. US Bank sought summary judgment in this action to foreclose on a mortgage executed by the Sachers. The board argued that due to the lack of equity in the unit, and the Sachers’ bankruptcy, its junior lien would go unsatisfied, noting also the lien grew to $30,000 because of the bank’s failure to proceed on the foreclosure action for five years. The court ruled the appointment of a receiver did not circumvent the priority of the bank’s lien, stating while the foreclosure was pending, a receiver may rent out the unit, use the income to pay common charges and remit the balance to the first mortgage holder. Thus, the court stated, contrary to the bank’s assertion, it would not suffer any undue prejudice as it would receive rental income while the foreclosure action was pending, and the receiver would be directed to rent out the unit for a limited time period to avoid future eviction proceedings and costs. Therefore, the court granted the board’s motion to appoint a receiver.
