HOA associations have options for collecting unpaid HOA fees (Sarasota: short sales, foreclosures)

[Sunshine Rules]

I came across the following story in today's Sarasota Herald Tribune:
http://www.heraldtribune.com/article/20110618/ARTICLE/306189990/2416/NEWS?Title=Foreclosure-fees-haunt-homeowner-associations

It explains how condo and homeowner associations are now using new tactics to collect delinquent fees from foreclosures and short sales through the use of aggressive law firms and collection agencies.


Although FL law sets limits on how much the lender has to cough up to the association (currently 12 months' worth of payments or 1 percent of the amount of the original mortgage, whichever is less), the article explains the cap is valid only if the lender followed the letter of the law in the entire foreclosure process. Law firms are now offering their services to review foreclosure documents to the HOA or condo associations.

One of the most important things I took away from the article is that homeowner and condo associations can ask the court for a deficiency judgment against the defaulting homeowner that is valid for 10 years and can be renewed for another 10 years. The HOA can then use that judgment to garnish the person's wages, seize bank accounts or assets at a future date to cover the unpaid HOA fees, plus interest.

So if you're home or condo is in foreclosure or you're considering doing a short sale, you may want to make sure to either keep your HOA fees paid up or work out a settlement with the condo or homeowner association -- or those unpaid fees may show up when you least expect them at a later date.

[d4g4m]

Not only are the HOA/condo associations looking to get paid for money owed but consider also the properties in foreclosure that are in a CDD
An HOA has to hope that residents will voluntarily send a monthly/quarterly check. If the property is in a CDD, the developer gets their fees collected by the County Tax Collector as part of the residents tax bill. If the developer is not getting their money to pay the bonds for the development, you can be sure they have a law firm on retainer to persue legal actions to get their money. And I'll bet they will get preference over an HOA. But an HOA/Condo association should do what ever they have to do to collect money owed. It's not fair to those who are paying to have their maintenence fees increased to make up the difference for those who aren't paying.

[gettinoutofjersey]

i was on the board of an hoa up north. we had the problem in collecting and the times and economy were good. we would send notices. we would send newsletters that had a status of who paid and who didnt to try and embarass the cheap ones. the dues were only 150 a year. they knew that when they bought and then later said they didnt want any part of that. unfortunately there were common areas to maintain as well as a frequently vandalized tot lot. we found that the legal fees would be more than the dues that would be collected. what we did was put a lien on the house. that was inexpensive. some paid because of the stigma. others did not. so unless they go sell and not get foreclosed on they will one day have to satisfy that lien. wait till a buyer does tittle work and sees that, may kill a deal.

[d4g4m]

It's too bad that a potential buyer in a HOA community or condo association now has to ask an additional questions. How many residents are in arrears of the monthly fee? Have liens been filed? Is the board thinking of raising the fee to make up the difference?
Liens can be collected easily if the mortgage payments are current and the home value is more than what is owed. If a foreclosure/short sale, the HOA lien claim goes to the bottom of the pile of claims.

[JAMESLIM]

Since 3 out of 11units in foreclosure/short sale in our condo,we had to pay $2,000. supplemental association due individually last year alone.those 3 unit owners have been renting their units for past 2 to 3 years without paying single dime of H.O.A dues.any advice for situation like this?

[FLSnowbirds]

Originally Posted by JAMESLIM

Since 3 out of 11units in foreclosure/short sale in our condo,we had to pay $2,000. supplemental association due individually last year alone.those 3 unit owners have been renting their units for past 2 to 3 years without paying single dime of H.O.A dues.any advice for situation like this?

Speak with the Law Firm of Dewey Suem & Howe ASAP

[SoFLGal]

That's exactly why I pointed out some of the condo associations that had/have a high rate of foreclosures and short sales on this thread:

//www.city-data.com/forum/saras...mer-ranch.html

I'm curious as that what condo complex you are referring to. Would you DM the name?

[bbronston]

It's fashionable these days to walk away from bank debt because there's been so much negativity surrounding the banking system. And, the banks and the government seem to be complicit in this by not pursuing borrowers' outstanding debt. Well...OK. But, HOAs and condo associations are not banks. They are friends and neighbors and individuals who are left holding the bag when fellow association members decide not to fulfill their personal obligations. That leaves everyone else with higher fees, assessments, and in some cases, fewer services plus it makes it harder for those who do pay their bills to sell their homes, and it brings down everyone's home value.

Our condo association has been using an attorney to go after deadbeat owners and those who've walked away. We've had some success but not enough. We've recently decided to use one of the companies mentioned in the article so we will see what happens. I don't like going after other people's money and assets but, really, we don't have any other choice. Our fees are too high, work has been deferred, it is harder for buyers to get loans here and enough is enough.

[roadwarrior11]

Some HOAs give you sidewalks for the dues. Or you get some grass Nazi who is paid to measure how tall your grass is and ticket you for now clipping your grass. Some give you a pool or play ground, the latter is easily taken care of. It depends on what you are getting vs what they charge. I think that people walking away from loans is excellent. Banks gave out predatory loans and did little to explain the possible problems to people who are very unsophisticated in this area. When you have a choice of putting hamberger helper on the table or pay some idiot for a pool boy the choice is easy.

[photoman_6]

Originally Posted by roadwarrior11

Some HOAs give you sidewalks for the dues. Or you get some grass Nazi who is paid to measure how tall your grass is and ticket you for now clipping your grass. Some give you a pool or play ground, the latter is easily taken care of. It depends on what you are getting vs what they charge. I think that people walking away from loans is excellent. Banks gave out predatory loans and did little to explain the possible problems to people who are very unsophisticated in this area. When you have a choice of putting hamberger helper on the table or pay some idiot for a pool boy the choice is easy.

WOW--feel entitled much? Nobody twisted your arm to move into a particular place. suck it up