What the preconditions actually are

The requirements at issue are real and they are substantive. Section 3-116(m) bars an association from commencing a foreclosure action unless:

• the unit owner, at the time the action is commenced, “owes a sum equal to at least three months of common expense assessments based on the periodic budget last adopted”;
• “the unit owner has failed to accept or comply with a payment plan offered by the association”; and
• “the executive board votes to commence a foreclosure action specifically against that unit.”

The court's ruling does not soften any of them. It holds they are things the association must prove, not things it must recite in its complaint. An owner who wants to contest them does so with evidence rather than with a motion to dismiss.

The second holding: the “notwithstanding” clause

The court read § 3-116(a)'s opening clause as meaning that a judgment plus a perfected judgment lien is required only where the sums due contain no unpaid assessment at all — the situation § 3-116(o) addresses.

That is the line between a collections file that includes delinquent assessments and one that is purely fines, late charges or fees. An association pursuing a fines-only balance cannot use the statutory lien to foreclose; it must first sue, get a judgment, and perfect a judgment lien. An association with unpaid assessments in the mix proceeds directly.

The third holding: who is a proper defendant

The LLC's sole member, operating a restaurant in the units without owning them, was properly joined as an “interested person” under V.R.C.P. 80.1(b)(1). A non-owner in possession is a party to a Vermont assessment foreclosure.

Where the proof burden falls

The pleading point is a relief; the proof point is the work. The three elements of § 3-116(m) are each documentary:

The three months. The measure is common expense assessments “based on the periodic budget last adopted” — not fines, not special assessments outside the budget, not interest. A ledger that lumps everything together does not establish it.

The payment plan. The statute requires that one was offered and that the owner failed to accept it or comply with it. An association that never made an offer has not met the condition, however delinquent the owner.

The vote. Not a general collections policy, and not a vote to pursue delinquencies. A vote “specifically against that unit”, recorded in minutes the association will have to produce — minutes that 27A V.S.A. § 3-118(a) requires the association to retain and make available to owners.

The service problem that precedes all of it

A different Vermont association learned the harder lesson first. In Village Square at Pico Condominium Owners' Association v. Henigman, No. 23-CV-05212, the Rutland Unit denied the association's motion to deem service effective or for alternate service on an absent unit owner in an assessment foreclosure.² In a state whose condominium stock is heavily second-home, reaching the owner is frequently the binding constraint.

What to watch next

Hotel Sugarbush survived a motion to dismiss; it has not been tried. The preconditions the court declined to treat as pleading requirements are still live defences on the merits.