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Unpaid liens are settled in a closing, otherwise clear title is not guaranteed. I have never heard of a successful sale with a known, unsettled lien issue.
Every successful transaction I have closed (even foreclosures) have had clear title. The only exception I have heard about is with an auction property.
How did the hoa become owner of the 6 units? So you're paying taxes for them now and minimum care for the units as owners?
Not paying taxes as the poster below outlined. The primary lienholder (Bank) pays those and the original homeowner is still responsible for the mortgage.
The HOA has foreclosed on its lien and in some cases followed through with eviction on the unit. It is taking the banks years to foreclose so why not re-coup past dues for the HOA. On some units the HOA has had to fix them up a bit to get the rental going.
Not sure the HOA became the "legal owner" but they did get possession and will rent (as in collect/keep such) until someone shows up and challenges them.
I would be very nervous about this practice. I would need some very heavy/multi legal advice before I could recommend/agree my association do so.
Not sure the HOA became the "legal owner" but they did get possession and will rent (as in collect/keep such) until someone shows up and challenges them.
I would be very nervous about this practice. I would need some very heavy/multi legal advice before I could recommend/agree my association do so.
Very common in NC now. Our association has already obtained legal opinions from two of the top firms in NC .
It seems that investors have caught on to this and are now bidding on properties in an HOA foreclosure sale.
They are picking the properties up for the dues owed, getting the deed, and renting them out.
HOA's are evil, and they definitely could/would go that far if someone on the board decided they want to.
Most new housing developments have HOA's so they are pretty much unavoidable these days. And even if you play within the rules sometimes you get bitten. A couple months ago I received a letter and threat of a fine for having trash spilling out of my trash can, with trash strewn over the street making the neighborhood look messy. Sure, great, HOA's are in place to protect neighborhoods from this kind of eye sore- but the problem was, I never, ever, ever have trash spilling out of my trash can- my wife and I are neat freaks, we are the last people in the neighborhood who would ever let that happen. Our trash can is never more than half full, so the lid remains securely closed at all times, never one piece of garbage falls out. So I had to write several angry letters to the HOA about it, they stood strong at first saying that someone in the development reported it, so they tried the angle that maybe I just was unaware of the mess and should be more careful going forward. I stood my ground, kept laying into them in my letters insisting on how careful I am about that stuff and know for a fact I have not had one piece of trash falling/hanging out of my trash can, telling them it is insulting that they make accusations like that without verifying that the observation was accurate, and demanding that the citation be removed from my record. Finally they backed down and removed it from my record and apologized. It turns out the mess was my neighbors, and whoever made the report had the house number wrong.
Meanwhile those same neighbors who truly had the mess have loud parties a couple nights per week, with music at dance club volume levels until 1 or 2AM and the association says they can't really do anything about it when I email to complain about it. I have to keep searching to find any use at all for HOA's- they are completely, utterly useless and evil.
It seems that investors have caught on to this and are now bidding on properties
in an HOA foreclosure sale. They are picking the properties up for the dues
owed, getting the deed, and renting them out.
In out state, the HOA lien would be subordinate to the mortgage as well as many other types of liens. So it's rare for the association to foreclose because they'd end up with an encumbered property. I don't know how it works in your state, but it sure seems unusual that the HOA fee would be of a higher priority than the mortgage, and wipe it out.
HOA's are evil, and they definitely could/would go that far if someone on the board decided they want to.
Most new housing developments have HOA's so they are pretty much unavoidable these days. And even if you play within the rules sometimes you get bitten. A couple months ago I received a letter and threat of a fine for having trash spilling out of my trash can, with trash strewn over the street making the neighborhood look messy. Sure, great, HOA's are in place to protect neighborhoods from this kind of eye sore- but the problem was, I never, ever, ever have trash spilling out of my trash can- my wife and I are neat freaks, we are the last people in the neighborhood who would ever let that happen. Our trash can is never more than half full, so the lid remains securely closed at all times, never one piece of garbage falls out. So I had to write several angry letters to the HOA about it, they stood strong at first saying that someone in the development reported it, so they tried the angle that maybe I just was unaware of the mess and should be more careful going forward. I stood my ground, kept laying into them in my letters insisting on how careful I am about that stuff and know for a fact I have not had one piece of trash falling/hanging out of my trash can, telling them it is insulting that they make accusations like that without verifying that the observation was accurate, and demanding that the citation be removed from my record. Finally they backed down and removed it from my record and apologized. It turns out the mess was my neighbors, and whoever made the report had the house number wrong.
Meanwhile those same neighbors who truly had the mess have loud parties a couple nights per week, with music at dance club volume levels until 1 or 2AM and the association says they can't really do anything about it when I email to complain about it. I have to keep searching to find any use at all for HOA's- they are completely, utterly useless and evil.
Many cities/counties have a noise ordinance...a noise level they will allow. Check into yours.
Imagine an owner in an HOA is fined $25 fee, but s/he refuses to pay the ticky-tac fine. That owner continues to pay the set monthly HOA dues but ignores notices to pay that single fine. The owner is intent on not EVER paying that fine on principle alone; but s/he is pleasant and respectful otherwise.
If the HOA board wanted to pursue it, could they eventually force a sale of the home owner's property to collect that $25? There most likely would be late fees and legal expenses tacked on to the $25. Does the remaining balance from the sale go to that former homeowner?
Just wondering on this situation. Thx for sharing.
What state are you in?
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