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When a lender forecloses and the condo association is served the complaint, what is the importance/benefit and or down side for the association to respond or not to the complaint? Additionally, why is it beneficial for the association to have the lenders foreclosure monitored?
Typically many states provide for some form of priority lien for condominium fees. When an Owner is delinquent on their mortgage payments, they are generally also delinquent on their condominium fee payments. Most states require some form of action on the part of the association to "prioritize" their lien. Thus, if a condo association or HOA does not take the required steps to establish their lien, and take advantage of any priority, and the lender forecloses, the association runs the risk of missing out on any chance to collect the delinquent dues. For this reason it is important to monitor foreclosures and to understand your state's collection laws with regard to condominium dues.
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