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In NC, we either clear the title to convey, or the buyer takes it "as is, where is" with all liens in place. This is one reason we don't have any such thing as "as is" sales, except colloquially.
Of course, title insurance excludes the liens from coverage. And banks will not lend with unsatisfied liens in place.
It isn't a matter of who is in what place, as long as the person seizing title covers any superior liens, or clears liens from a superior position.
I would like to see an NC attorney put a finer point on it, but I think I have covered it.
At least in Florida it works just like Suncc49 said:
"You are 100% incorrect.
HOA is not responsible for the first mortgage - that remains the original mortgagee's responsibility
Insurance? Townhouse or condo HOA's usually pay for the exterior building insurance anyways, so adding a foreclosed unit is very cheap. My HOA pays around $60.00 to insure a foreclosed unit.
Property Taxes? This is a gray area. I can tell you that the city here chases after the primary mortgagee.
HOA Liens are third in line behind the mortgage company, taxes, IRS.
Also HOA foreclosures are more common than you think. Several HOA's now foreclose and rent out the properties to assist in recovering for lost dues."
The HOA DOES NOT make mortagage payments, taxes, etc. but is responsible for both the upkeep and HOA fees after they foreclose.
How can an entity that is-------third in line--- leapfrog over the other two and take title ?
How does the HOA secure the title w/o paying off the first mortgage? I thought first mortgage takes precedent over any liens.
The title is granted to the HOA by a judge/sherriff/etc (depends on state) at the foreclosure lawsuit. The title is separate from the mortgage. The mortgage is simply a lien, and still exists. If the bank wants the property, they now must foreclose on the HOA who is the current title holder, this process can take years, because banks are slow. I recently saw one house and they made 2 payments and then stopped. The bank foreclosed six years later!
A foreclosure suit is different than a normal house sale. Liens do not need to be cleared to transfer title.
How can an entity that is-------third in line--- leapfrog over the other two and take title ?
By accepting responsibility for payment of the liens.
Foreclosure by superior lienholders is not a mandate, just their right and only if they choose to exercise those rights.
In our HOA after an owner is 120 days behind (they have gotten 3 requests from the association to settle it by then) we turn the account over to a law firm that files a lien and tells the owner unless cleared up in 30 days, foreclosure will commence. If no arrangements are made within 30 days, the law firm files some paper work saying that foreclosure has begun and outlines a plan to stop it which is basically pay the HOA back dues a legal fee to the law firm..
We have never gone to nor do we intend to ever go to foreclosure. We have decided it is not in the best interest of our HOA to do so. I believe in some cases (depending on state laws, type units, financial condition, etc.) that foreclosure could be in the best interest of the association.
I'm in a little different situation. I have recently received a notice stating that we have a lien on our home due to not paying HOA dues. Strange, we had set up a auto-bill pay with the association just for this purpose. Why did we get a notice??? Okay, here it is -
Apparently, a previous tenant a couple years back broke a rule and was given a fine. We do have a management company that manages our place by the way, so we never knew about this.. Anyway, he/she never paid it but sent a letter to the association contesting it. This never was followed up on it seems. So, the association used our auto-bill pay for the association dues to pay for the fine (never informed us) in which the association dues were short and continue to be short for the next few years. Why they never sent a letter or called or even told our management company, i do not know, until now (which makes me believe they could have contacted us right away but waited). Anyway, they had been charging a monthly late charge, monthly interest, and legal fees which comes to a whooping $14K. I mean, I'm no lawyer but this really does not seem right at all... any ideas? I really could use some advise.
I'm in a little different situation. I have recently received a notice stating that we have a lien on our home due to not paying HOA dues. Strange, we had set up a auto-bill pay with the association just for this purpose. Why did we get a notice??? Okay, here it is -
Apparently, a previous tenant a couple years back broke a rule and was given a fine. We do have a management company that manages our place by the way, so we never knew about this.. Anyway, he/she never paid it but sent a letter to the association contesting it. This never was followed up on it seems. So, the association used our auto-bill pay for the association dues to pay for the fine (never informed us) in which the association dues were short and continue to be short for the next few years. Why they never sent a letter or called or even told our management company, i do not know, until now (which makes me believe they could have contacted us right away but waited). Anyway, they had been charging a monthly late charge, monthly interest, and legal fees which comes to a whooping $14K. I mean, I'm no lawyer but this really does not seem right at all... any ideas? I really could use some advise.
You need to pay attention to annual and monthly statements better on property that you own. Also I find it quite odd that your tenant was also paying HOA dues and that you never received any notices on the fine. Did the HOA not mail the fine to your current address or did you guys not notify your HOA that it was a rental property and you didnt live there? They most likely didn't know and served the notices to your rental property. The best advice here is to figure out how much of that 14k is actual late dues/fine and go from there with a settlement offer.
Legal fees on collection are capped... in my state it cannot be more than 20% of the original debt charged to the late payer. So $1,000 in late dues, cannot have more than $200.00 in allowable legal charges.
I'm in a little different situation. I have recently received a notice stating that we have a lien on our home due to not paying HOA dues. Strange, we had set up a auto-bill pay with the association just for this purpose. Why did we get a notice??? Okay, here it is -
Apparently, a previous tenant a couple years back broke a rule and was given a fine. We do have a management company that manages our place by the way, so we never knew about this.. Anyway, he/she never paid it but sent a letter to the association contesting it. This never was followed up on it seems. So, the association used our auto-bill pay for the association dues to pay for the fine (never informed us) in which the association dues were short and continue to be short for the next few years. Why they never sent a letter or called or even told our management company, i do not know, until now (which makes me believe they could have contacted us right away but waited). Anyway, they had been charging a monthly late charge, monthly interest, and legal fees which comes to a whooping $14K. I mean, I'm no lawyer but this really does not seem right at all... any ideas? I really could use some advise.
How much communication with you was the mgt co supposed to have for what you paid? Are they still in existence? People need to know not to trust them if they are. What is their excuse to you now?
How much communication with you was the mgt co supposed to have for what you paid? Are they still in existence? People need to know not to trust them if they are. What is their excuse to you now?
Cully HOA's are required to send out annual budgets and notifications of any increase in dues. Also attending HOA meetings always helps.
This sounds like a situation where they didn't provide a new address to the HOA/management company and didn't attend or review any information from the HOA.
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