lease agreements, and taking all necessary steps to protect the interest of plaintiffs' security. The condominium units were vacant at the time the Receiver was appointed, because the tenant of record, Psychiatric Institutes of America ("PIA"), had vacated the premises.
On January 17, 1995, the Receiver negotiated a settlement with PIA, which paid the Receiver $ 587,272.20. Defendant J.I. Sopher & Co., Inc. ("Sopher"), the owner of the premises, deposited an additional $ 438,871.95 with the Receiver representing PIA's security deposit, plus interest. PIA paid this money in lieu of rent for the balance of its lease term, which would have run through August 31, 1998. In an order dated February 25, 1995, I approved the Surrender of Lease Agreement, in part because the Agreement served to protect and preserve the property in question. I noted that "fifteen months of rent will be realized from PIA and the property can be relet, thereby producing a future income stream to meet ongoing property expenses." The Receiver sought tenants after the Surrender Of Lease Agreement was approved, but to date, has not been able to relet the premises.
At the time this motion was filed, sixteen months of unpaid common charges, totaling $ 122,976, had accrued. The parties agree that a foreclosure sale will not produce proceeds sufficient to pay both the accrued maintenance charges and the unpaid amounts on the first mortgage.
Plaintiffs rely on N.Y. Real Prop. Law § 339-z (McKinney 1989) in opposing the motion. In pertinent part, § 339-z provides:
The board of managers, on behalf of the unit owners, shall have a lien on each unit for the unpaid common charges thereof, together with interest thereon, prior to all other liens except only (i) liens for taxes . . . and (ii) all sums unpaid on a first mortgage of record . . . . Upon the sale or conveyance of a unit, such unpaid common charges shall be paid out of the sale proceeds or by the grantee . . . .