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My complex has a condo that was foreclosed upon and a corporation - in the business of buying and selling property - bought the property with a sheriff's deed. The condo has stood empty for six to eight months and has accumulated about $6,000 in overdue HOA fees. The taxes, however, are being paid.
I know the HOA or Condo Association can sue the record owner in a foreclosure action for recovery of these HOA fees. Are there any other remedies that the HOA can pursue?
A: The owner is paying the property taxes because that lien has priority over all others, including any mortgage. The tax assessor will be paid off first from any money received in a foreclosure. If you foreclosed you probably wouldn't end up with any money, and it would cost you the expenses of foreclosure. But this investor is losing money if it doesn't try to occupy the condo. You said it's been empty for six to eight months.
I have a couple of suggestions in this situation.
Look to see if there is a mortgage. If there is, then most likely stipulations in the mortgage will require keeping HOA dues current. This is a standard clause for any lender wanting to sell the mortgage to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Then notify the lender of the breach; this will be cause to foreclose. The lender may notify the owner that it must pay HOA dues and fees.
If that doesn't work then make renting or selling the condo subject to payment of HOA dues and fees. Make sure this gets properly set out as part of the HOA rules. The investor must eventually do something with the condo.
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Tags: Deliquencies, Liens, Collections, Foreclosure
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